MahaREAT Says Builders Cannot Take Over 10% Without a Registered Agreement: What Homebuyers Should Know
MahaREAT ordered an ₹80.77 lakh refund after finding a builder took over 10% without a registered Agreement for Sale. What buyers should check before paying.
Published
Answer first: The Maharashtra Real Estate Appellate Tribunal has held that a promoter cannot accept more than 10% of a flat's consideration without first entering into and registering an Agreement for Sale, and cannot then terminate the allotment for non-payment while its own failure to execute that agreement continues. In the reported Alta Monte Signet dispute, the tribunal directed a refund of ₹80.77 lakh with interest, imposed a ₹10 lakh penalty for the Section 13 violation and awarded ₹50,000 in costs. For homebuyers, the practical lesson is simple: before paying beyond the initial threshold, insist on the registered Agreement for Sale and reconcile every demand against it.
Key facts
- MahaREAT passed the reported order on 7 September 2026 in Manojkumar Singh v. Era Realtors Pvt. Ltd., arising from a MahaRERA complaint.
- The buyer had booked a flat in the Alta Monte Signet project in 2014 for a reported consideration of ₹2.77 crore and paid about ₹1.008 crore — more than 30% — without a registered Agreement for Sale being executed.
- Section 13 of RERA prohibits a promoter from accepting more than 10% of the cost of a flat, apartment or building as advance/application money without first entering into a written and registered Agreement for Sale.
- The tribunal found that the promoter could not legally continue demanding instalments and terminate the allotment for non-payment while failing to execute the agreement it was required to execute.
- The tribunal directed refund of the reported ₹80.77 lakh balance, with interest calculated at 2% above SBI's highest MCLR for the periods specified in the order.
- It also imposed a ₹10 lakh penalty under Section 61 for the Section 13 violation and ₹50,000 in costs.
What happened
The buyer paid a substantial portion of the flat price after booking in 2014, but the promoter did not execute and register the Agreement for Sale. The dispute later went through MahaRERA proceedings and consent terms under which the buyer agreed to continue with the project and the promoter agreed to execute the agreement within a year.
According to the reported tribunal decision, the promoter still did not execute the Agreement for Sale, continued raising payment demands and ultimately terminated the allotment for non-payment. MahaRERA had dismissed the buyer's later complaint, including on the ground that the earlier settlement barred the second proceeding.
MahaREAT disagreed. It treated the promoter's continuing failure to execute the Agreement for Sale and hand over possession as giving rise to a fresh cause of action. It also held that the statutory Section 13 restriction mattered independently: after taking more than 10% without the required registered agreement, the promoter could not rely on further unpaid instalments to justify termination.
Why the 10% threshold matters
The 10% rule is not merely a paperwork preference. A registered Agreement for Sale is the document that should capture the unit, consideration, payment schedule, possession-related obligations and other contractual terms in an enforceable form. Paying large sums before that document is executed can leave a buyer exposed to disputes about payment milestones, possession, specifications or cancellation.
Fact: Section 13 creates a statutory restriction on accepting more than 10% before the written and registered Agreement for Sale.
What not to infer: this ruling does not mean every buyer who has paid more than 10% automatically gets an ₹80.77 lakh refund, the same interest rate or a ₹10 lakh penalty. Those remedies arose from the facts, procedural history and findings in this particular case.
Can a builder cancel an allotment for non-payment?
Cancellation rights depend on the governing documents, law and facts. This case is important because the tribunal found the promoter itself had not completed the statutory step required before taking further money. The decision should not be read as saying a buyer may ignore valid payment obligations after a compliant Agreement for Sale has been executed.
Buyers facing a demand or cancellation notice should compare the demand with the registered agreement, construction-linked milestones, RERA disclosures and payment receipts. If the agreement itself has not been registered despite payments crossing the statutory threshold, that is a specific issue to document and raise promptly.
What the refund and interest order actually says
Reporting on the order says the buyer had paid ₹1.008 crore. ₹20 lakh had already been refunded, leaving ₹80.77 lakh. MahaREAT directed refund of that balance. It also directed interest at 2% above SBI's highest MCLR from the respective dates of payment until 24 July 2018 on ₹1.008 crore, and thereafter on the ₹80.77 lakh balance until the date of the tribunal order.
That calculation is case-specific. Buyers should not use it as a universal RERA refund calculator. Applicable interest and compensation can depend on the state rules, relief claimed, order passed and subsequent appellate proceedings.
Who is affected — and who is not
The operative directions apply to the parties in this dispute. The decision is especially relevant to Maharashtra homebuyers who have paid substantial amounts without a registered Agreement for Sale, or who are facing payment/cancellation disputes where the promoter has not complied with Section 13.
It does not cancel lawful payment obligations in unrelated projects. It also does not change a borrower's home-loan contract. If a lender has already disbursed money, the EMI or pre-EMI obligation normally continues under the loan documents unless the lender or a competent authority changes it.
Homebuyer checklist before paying beyond 10%
- Ask for the Agreement for Sale: do not treat an allotment letter or booking form as a substitute where the registered agreement is legally required.
- Match the unit details: verify flat number, carpet area, parking treatment, total consideration and promised possession terms.
- Check the payment schedule: compare every demand with the registered agreement and construction milestone.
- Verify RERA disclosures: check the project registration, sanctioned plans, completion timeline and promoter filings on the relevant RERA portal.
- Keep the money trail: preserve receipts, bank statements, demand letters, emails and any cancellation notice.
- Coordinate with the lender: if a home loan is involved, ask what document and construction checks the lender completed before disbursement. Lender approval is not a substitute for your own legal/project due diligence.
- Do not stop EMI on your own: a builder dispute and a loan repayment obligation are separate legal relationships.
What to watch next
The reported order may still be subject to further legal challenge or implementation proceedings. Buyers relying on it should check whether any stay, appeal or later order changes the position. More broadly, the case puts renewed attention on whether promoters are collecting substantial amounts before executing registered Agreements for Sale and whether payment demands actually follow the contractual and statutory sequence.
FAQ
Can a builder take more than 10% before registering the Agreement for Sale?
Section 13 of RERA restricts a promoter from accepting more than 10% of the cost as advance/application money without first entering into a written and registered Agreement for Sale.
Does paying more than 10% automatically entitle me to a refund?
No. The statutory violation can be important, but the remedy depends on the facts, relief sought and order passed. The ₹80.77 lakh refund and interest directions here are specific to this dispute.
Can I stop paying my home-loan EMI if the builder has not registered the agreement?
Do not assume so. Your loan contract is separate. Contact the lender in writing and obtain legal advice appropriate to your case before changing repayments.
What if the builder sends a cancellation notice?
Preserve it and compare the stated default with your registered agreement, payment receipts, construction milestones and RERA record. If the agreement was never executed despite payments crossing the statutory threshold, document that fact as well.
RiteAssetz takeaway
A home-loan sanction should not be treated as permission to pay a developer without checking the sale-document sequence. Before major disbursement, buyers should reconcile the registered Agreement for Sale, project disclosures, payment milestones and lender disbursement conditions. RiteAssetz can help borrowers structure affordability and lender-fit questions; disputes over RERA compliance, cancellation or refund should be reviewed with an appropriately qualified legal professional.