Booking a pre-launch flat: the sequence and the ten per cent rule

Most of what goes wrong in a property purchase goes wrong in the order things happened, not in the price. Money moves before paperwork, then the paperwork has to accommodate the money.

Here is the sequence, in the order it is supposed to run.

Step 1: Token or expression of interest

A small payment to hold a position before the price list exists. Ask in writing whether it is refundable and by when, and get the answer printed on the receipt rather than sent in a message.

Check who the payee is. It should be the registered promoter entity or an authorised escrow, never an individual, and the receipt should carry the registered name.

Step 2: Unit selected, cost sheet issued

Ask for the cost sheet for the specific unit with every line itemised: carpet area, base rate, floor rise, preferred location charge, parking, club membership, maintenance advance, corpus, connection charges, GST, stamp duty and registration.

Divide the all-inclusive total by the carpet area. That number is comparable across projects. The quoted rate per square foot is not.

Step 3: The ten per cent line

This is the one step in the sequence set by law rather than by the developer.

Under Section 13 of the Real Estate (Regulation and Development) Act, a promoter cannot accept more than ten per cent of the cost of the apartment as an advance or application fee without first entering into a written agreement for sale, and registering that agreement.

Step 4: The agreement for sale, read before it is signed

Five things to check inside it.

1. The carpet area. Where a brochure and the agreement disagree, the agreement governs, and the brochure usually says so in small print.
2. The completion date, and what happens if it is missed. There should be a stated rate of interest payable to you on delay, and it should be symmetrical with what you pay on a late instalment.
3. The specification list. Flooring, fittings, sanitaryware, doors, windows, brand names where given. The show flat is staging. This annexure is the commitment.
4. The payment schedule, which should be tied to construction stages rather than calendar dates.
5. The cancellation and forfeiture terms. Read the clause that applies if you walk away, and the one that applies if they do.

Have a lawyer read it. It costs a few thousand rupees against a purchase of over a crore, and it is the least exciting hour of the whole process and the most useful one.

Step 5: Stamp duty paid, agreement registered

Registration is what makes the agreement enforceable. Seven per cent stamp duty in Pune, six per cent in a woman’s sole name, plus one per cent registration capped at ₹30,000.

Until this step is done, the paperwork binds you more than it binds the developer. After it, both sides are on the same document.

The documents to collect along the way

• MahaRERA registration certificate for the phase covering your wing
• Sanctioned layout and floor plan for that phase, downloaded from the portal
• Title certificate and the search report from the developer’s advocate
• Commencement certificate for the tower you are buying in
• Allotment letter, cost sheet and every payment receipt
• The agreement for sale with all its annexures

What to avoid

Paying anything on the day of the first visit. Every discount that expires this evening is available next week, and a sales process built around urgency is built that way because urgency stops people reading.

Take the cost sheet home. Look up the registration on the portal. Then decide.