Allotment Letter and RERA’s 10 Percent Rule: What You Can Be Asked to Pay Before the Agreement

By ADiHomes Updated October 25, 2026 9 min read

Checked: 3 official sources citedreviewed October 25, 2026Report an error

Watercolour illustration of an allotment letter, pen and coins on a sales-office table

Contents

The first money most buyers hand over for a new flat is not paid against a registered agreement. It is paid against an application form, an expression of interest, a booking receipt or an . These early papers are where a lot of buyer trouble begins: large sums paid without a binding contract, terms that the later agreement contradicts, and refunds that become a fight. The Act deals with this stage directly through Section 13, which caps what a promoter can collect before a registered . This guide explains what an allotment letter is and is not, how the 10 percent rule works, how it applies in Uttar Pradesh and Haryana, and what to check before you sign or pay.

The documents at the booking stage

Document	What it usually is	Legal weight
Expression of interest (EOI)	A request to be considered for a unit, often with a “refundable” cheque, before or around launch	Non-binding on both sides; if collected for a project not registered with RERA, it can amount to booking before registration
Application form	Your formal request to book, with the booking amount and your chosen unit	A contract offer; terms matter, but cannot cut down RERA rights
Allotment letter	The promoter’s acceptance, naming the unit, price and payment plan; may be “provisional”	Evidence of allotment; in UP cannot be read to limit rights under the agreement for sale or the Act
Agreement for sale (builder-buyer agreement)	The full contract in the state’s prescribed form	Must be registered before the promoter collects more than 10 percent
Conveyance or sub-	The final title document after completion	Transfers ownership

What Section 13 says

Section 13(1) of the RERA Act says a promoter may not accept more than ten percent of the cost of the apartment, plot or building as an advance payment or application fee without first entering into a written agreement for sale with the buyer and registering it. Section 13(2) requires that agreement to be in the form prescribed by the state, and to specify the construction details, specifications, development works, payment dates and manner, the possession date, and the interest rates payable by each side on default.

In practice this means:

Up to 10 percent of the cost can be taken against an application or allotment letter.
Before the builder asks for the next rupee, a registered agreement for sale in the state’s model form must be in place.
The “cost” here is the cost of your unit. Check what your builder treats as cost, including any or car parking listed in the price.

Section 3 adds a prior step. No promoter may advertise, market, book, sell or invite purchases in a project that requires registration until it is registered with RERA. Section 59 lets the authority impose a penalty of up to 10 percent of the estimated project cost for breaching Section 3, and other breaches, including Section 13, attract a penalty of up to 5 percent of project cost under Section 61.

Uttar Pradesh: how the model agreement treats early papers

The UP rules require the agreement for sale or lease to be in the annexed model form.
They state that any application letter, allotment letter or other document signed by the allottee before the agreement is executed and registered cannot be read to limit the allottee’s rights under the agreement, the Act or the rules. The model agreement repeats this in its “savings” clause and its entire-agreement clause, which supersedes earlier allotment letters.
Clause 1.11 of the model agreement records the booking amount you paid at the time of application as part payment of the total price.
If you later cancel without the promoter’s fault, the promoter can forfeit that booking amount, which is why its size matters.

The practical lesson: in UP, a harsh clause in an application form, such as forfeiture of everything paid or a vague possession date, should not survive once the model agreement is signed. But you have to make sure the agreement is actually executed and registered.

UP RERA also advised buyers in October 2026 to pay bookings, instalments and other dues only into the project’s designated collection account, to verify the account details on the UP RERA portal before transferring money, and to report any promoter asking for payment into another account.

Haryana: why “provisional” can matter

A 2026 HRERA Gurugram decision shows the risk of a booking that never becomes an agreement. In a dispute over a unit in Eldeco Fairway Reserve, reported in August 2026, the authority held that paying a booking amount and receiving a provisional allotment letter did not by itself make the buyer an “allottee” under RERA when the allotment was expressly conditional on executing and registering an agreement for sale, and the agreement was never signed despite reminders. The complaint was dismissed and the promoter’s cancellation upheld.

That ruling cuts both ways. Builders cannot sit on a 10 percent payment indefinitely without an agreement, but buyers who delay signing may lose the protection of the Act. If you receive a provisional allotment, respond to reminders in writing and push for the agreement to be executed promptly.

Expressions of interest before RERA registration

Pre-launch “EOI” schemes, where agents collect cheques of several lakh rupees for priority on a project that is not yet registered, remain common. A 2026 practitioner article described an agent collecting a Rs 5 lakh “refundable” EOI for a project that had neither a sanctioned plan nor RERA registration, and pointed out that this runs against Section 3. For NCR buyers the risks are concrete:

No RERA number means no project page to check approvals, escrow or the possession date.
No agreement in the model form means no prescribed interest on delay.
Refunds of “refundable” EOIs depend on the builder’s goodwill.
Prices and unit sizes can change before the formal launch.

If you still want to take part, insist that the cheque is not encashed, that the receipt states the amount is fully refundable on demand without deduction, and that no unit is allotted until RERA registration.

What to check in an allotment letter

RERA registration number of the project and phase, matching the state RERA portal.
Unit details: tower, floor, unit number and in square metres. RERA disclosures and the model agreement use carpet area, so a letter quoting only is a warning sign.
Total price broken up into base price, preferential location charges, parking, club and other charges, plus GST.
Payment plan and whether the next demand comes before the agreement is registered.
Booking amount and whether it exceeds 10 percent of cost.
Forfeiture and cancellation terms, compared with your state’s model agreement.
Timeline for executing the agreement, and who pays on it.
Payee account: confirm it is the project’s collection account.
Possession date: it should match the date declared on RERA.

Red flags

A demand for 20 to 30 percent “on booking” with the agreement promised later.
Payment to a group company or a personal account.
An allotment letter that says it overrides the agreement or that RERA does not apply.
“Assured return” or “no till possession” promises tucked into the allotment letter rather than the agreement.
Pressure to sign before you have seen the draft agreement.

If the builder has taken more than 10 percent without an agreement

Write to the promoter asking for the agreement in the model form to be executed and registered within a fixed time.
Do not pay further demands until it is registered.
If the builder refuses, file a complaint with UP RERA or HRERA asking for execution of the agreement, or a refund with interest if you prefer to exit.
Keep all receipts, emails and brochures; they help to show what was promised.

As of October 2026

This guide draws on the RERA Act, UP’s 2016 rules and model agreement, and reported HRERA and UP RERA actions. State rules and model agreements can be amended. It is general information, not legal advice.

Frequently asked questions

How much can a builder take before the agreement for sale?

Under Section 13 of the RERA Act, no more than 10 percent of the cost of the unit as an advance or application fee, unless a written agreement for sale has been entered into and registered.

Is an allotment letter a legal contract?

It records the allotment and its terms, but in UP any allotment letter signed before the registered agreement cannot be read to limit your rights under the agreement or the RERA Act.

Does a provisional allotment make me an allottee in Haryana?

Not always. In 2026 HRERA Gurugram held that a booking amount and provisional allotment letter did not confer allottee status where the allotment was conditional on an agreement that was never executed.

Is paying an EOI for an unregistered project safe?

It is risky. Section 3 of the RERA Act bars booking or inviting purchases before registration, and there is no RERA record to protect you if the builder changes terms or delays a refund.

What is the penalty for breaking Section 13?

Contraventions other than Sections 3 and 4 can attract a penalty of up to 5 percent of the estimated project cost under Section 61, imposed by the RERA authority.

Sources

Updated 25 October 2026. This article is general information, not legal or financial advice; check current rules and project details before you decide.

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How to Check a Builder’s Track Record in Delhi NCR: RERA, NCLT and Site Checks October 25, 2026
Encumbrance Certificate and Title Search in UP, Haryana and Delhi: Where to Check Before You Buy October 25, 2026
Transfer of an Under-Construction Flat: Buying from the Original Allottee in Noida and Gurugram October 25, 2026