Legal
Booking amounts, allotment letters and getting out if you need to
6 min read · Last verified
In short
A booking amount reserves a unit but is not the purchase. RERA caps what a developer may collect before a written, registered agreement for sale. What you recover on cancellation depends on the terms you accepted, so read the cancellation clause before paying rather than after.
Key facts
- Booking amount
- Reserves the unit; not the purchase itself
- Statutory cap
- RERA limits collection before a registered agreement
- Allotment letter
- Records the reservation and terms; not a substitute for the agreement
- Refund position
- Governed by the cancellation clause you accepted
- Best protection
- Read the cancellation terms before paying
The booking amount is usually paid in an atmosphere of urgency — a unit is going, a price is holding until the weekend — and the terms attached to it are rarely read at that moment.
It is worth knowing beforehand what the payment does, what it does not do, and what happens if your circumstances change.
What a booking amount does
It reserves a specific unit at agreed terms for a period, taking it off the market while the paperwork is prepared and your finance is arranged.
It is not the purchase. The purchase happens through the agreement for sale, which sets out the carpet area, the specification, the completion date and the payment schedule — the terms that actually protect you.
What RERA changed here
Before RERA a developer could collect a substantial proportion of the price against a booking form alone, leaving buyers heavily committed with very little documented.
The Act caps what may be taken before a written agreement for sale is executed and registered. That is a genuine protection, and it works only if you insist on it — the cap does not enforce itself if you volunteer more.
- Do not pay beyond the permitted amount before a registered agreement exists.
- Ask for the draft agreement before paying the booking amount, not after.
- Get the receipt, and get the terms in writing at the same time.
The allotment letter
An allotment letter records that a specific unit has been allotted to you at stated terms. It is useful evidence and it is commonly required by lenders as part of the loan application.
It is not the agreement for sale, and it does not carry the same protections. Treat it as a step toward the agreement rather than a substitute for it.
Cancellation: read this clause before you pay
Circumstances change — a job moves, a loan is declined, a family situation shifts. What you get back depends entirely on terms you accepted at the point when you were least inclined to read them.
- How much is forfeited on cancellation, and is it a fixed sum or a percentage?
- Over what period is the balance refunded? An open-ended commitment is not a commitment.
- Is refund conditional on the developer reselling the unit first?
- Does the position change once the agreement is registered?
- What happens if your loan is declined — is that treated differently?
Cancellation by the developer
The agreement will also set out when the developer may cancel — typically for non-payment. Read what notice you get and whether you have an opportunity to cure a missed instalment.
This matters more than buyers expect on long construction schedules, where a temporary cash-flow problem can coincide with an instalment date.
Practical protections
Small precautions at this stage prevent most of the difficulty later.
- Ask for the draft agreement before paying anything.
- Keep the booking amount modest until the agreement is registered.
- Pay by traceable means and keep the receipt.
- Get any verbal assurance about refunds written down.
- Do not let a deadline push you past your verification steps — a reserved unit is not worth an unverified title.