Before you pay a token: eleven things to check, and four RERA numbers worth knowing

A token amount is small, so it does not feel like a decision. But it usually comes with a booking form, a receipt that may say little, and a pull to pay the next instalment. The checks below take a few days and cost almost nothing compared with the money they protect.

Four numbers from the RERA Act

• A promoter shall not accept more than ten per cent of the cost as an advance or application fee without first entering into a written agreement for sale and registering it (section 13(1)).
• Seventy per cent of the amounts realised from buyers must be deposited in a separate scheduled-bank account to cover the cost of construction and the land cost, with withdrawals in proportion to completion certified by an engineer, an architect and a chartered accountant (section 4(2)(l)(D)).
• A defect brought to the promoter's notice within five years of possession must be rectified without further charge within thirty days, or the buyer may claim compensation (section 14(3)).

The eleven checks

1. Is the project registered, and is it the right phase? Look it up on your state RERA website and match the promoter's name, phase and completion date. Registration is not a guarantee; our RERA guide shows what it does and does not tell you.
2. Are you being asked for more than a token before an agreement? If a promoter wants well over ten per cent before a registered agreement for sale, ask why and take advice.
3. Who holds the money? Ask which bank account collections go into, and whether the separate-account rule above is being followed for the project.
4. Is the carpet area written down and priced? Carpet area under RERA is the net usable floor area, excluding the external walls, service shafts, exclusive balcony or verandah and exclusive open terrace. Get the carpet and super built-up areas in writing, and price per sq ft on one basis only.
5. Read the agreement for sale. Check the possession date, the payment schedule against construction milestones, and what each side owes if the other defaults. Do not rely on the brochure.
6. Is the title clean? For a resale, that means the seller's chain of deeds, an encumbrance certificate and, if the seller has a loan, the lender's closure letter. See our title-check guide.
7. Ready flat: ask for the occupancy certificate and the society's no-dues letter, and confirm maintenance charges in writing.
8. Is the price in line with the pocket? Use the one-hour check in our guide to whether the asking price is fair.
9. Can you carry the EMI through a shock? Test it as set out in our affordability guide.
10. What exactly does the token buy? Get a receipt that states the amount, the property, the purpose and the conditions for a refund.
11. Let a lawyer read it before the next payment. Paying a fee for a read costs far less than a dispute.

What a checklist cannot do

It cannot make a poor property good. A clean checklist on a flat priced well above its area, or one you cannot afford, is still a bad purchase. Gulmohar's evaluation combines the price check, the affordability check and the open items from this list into one report, and lists what is still unchecked, so the next step is clear.