Booking an Under-Construction Home

Here is the fear, said plainly, because it is the right one to be feeling. Rohan and Meera Iyer are sitting across a glass table in a builder's booking office. In front of them is an agreement the thickness of a small book — sixty-odd pages of clauses in language nobody speaks — and a request to start paying, in lakhs, for a two-bedroom flat that does not yet exist. Where the flat will be there is currently a pit, some rebar, and a board with an artist's impression of a building. They are being asked to hand over the largest sum of their lives, in instalments over two years, for a promise. And the quiet 3 a.m. version of the fear is this: what if the clauses in that book are written to protect the builder and not us, and we sign them because we did not know which ones to argue with?

So let us set that fear down, piece by piece, before we teach anything. You do not need to be a property lawyer to book an under-construction flat safely. The law has already built you a shield, and this lesson hands it to you: a specific clause of RERA says a builder cannot take more than a tenth of the price from you until it has signed and registered a proper agreement — which means you get to read the agreement, on paper, before most of your money moves. The thick agreement itself has perhaps eight clauses that actually matter, and by the end of this lesson you will know each one by name and know which are quietly loaded against you. The GST is a fixed, knowable number you can compute yourself in a minute. And the money the bank releases does not all go out at once — it goes out slab by slab, as the building rises, which is itself a form of protection. None of this is a mystery. It is a process, and the process has handrails.

We are following the Iyers, whom you have watched from their first conversations about whether to buy at all. Both are salaried in Bengaluru, with a combined income of ₹28,00,000 — twenty-eight lakh, or 2.8 million rupees — a year. The flat they have chosen is a RERA-registered under-construction 2BHK with a carpet area of 720 square feet and an agreement value of ₹95,00,000 — ninety-five lakh, 9.5 million rupees. They are putting in ₹23,00,000 of their own money and taking a home loan of ₹72,00,000, floating rate, in joint names. Possession is roughly two years out. Those numbers are locked; what is not yet settled is whether they sign the right agreement, pay the right way, and know the true, all-in cost. That is the whole of this lesson.

A quick word on where this sits, so you know what we are and are not covering. You have already decided, back in Lesson 5, Ready-to-Move vs Under-Construction vs Resale, that an under-construction flat is the route — this lesson does not re-open that choice, it assumes it. You have already checked the builder in Lesson 13, Vetting the Builder & the Project, and negotiated the price and paid the token in Lesson 14, Negotiating, the Offer & the Booking Amount — so we pick up the moment the token is paid. The depth of the home loan itself — how the floating rate is set, how the EMI is built — is Lesson 16, The Home Loan, in Depth, and we lean on it here rather than repeat it. This lesson is the narrow, crucial middle: the agreement you sign, the plan you pay on, the tax you owe, and the way the money is released. Let us walk it.

Before any single document, hold the whole sequence in your head, because almost every mistake at this stage comes from doing these steps in the wrong order or skipping one. Booking an under-construction flat is not one event; it is a short chain of them, and each link has a legal weight the previous one did not.

The chain runs like this. First, you pay a token or booking amount and the builder issues an allotment letter — a short document that says, in effect, "flat 704 is reserved for you." Second, and this is the step the law cares about most, the builder must execute a proper agreement for sale and register it before it can take more than 10% of the price from you. In an under-construction sale that registered agreement is the Builder-Buyer Agreement — the BBA — the thick book of clauses. Third, once the agreement is signed, you pay in instalments on a payment plan, and if you are taking a loan, the bank releases its share of each instalment directly against construction progress. Fourth, GST rides on top of each instalment as you pay it. And finally, roughly two years later, the building is finished, the builder gets its Occupancy Certificate, you pay the last instalment, and you take possession — which is Lesson 27, Possession, Handover & Moving In, not this one.

Notice the shape of that sequence: a small, reversible commitment first (the token and the allotment), then the big, binding one (the registered agreement), then the money flowing out slowly against a rising building. The law deliberately puts the registered agreement before most of your money — that is the 10% rule you will meet in Section 3, and it is the single most important protection in the whole process. Everything that follows in this lesson is a closer look at one link in this chain. We start with the first document you are handed: the allotment letter.

When the Iyers pay their booking amount, the builder hands them an allotment letter. It is worth understanding this document precisely, because it is the first thing buyers are given and the first thing they overestimate. An allotment letter is the builder's written confirmation that a specific unit — a flat number, on a specific floor, of a stated size — has been allotted, that is, reserved and assigned, to you, at an agreed price, against the booking amount you have paid. It usually names the unit, the carpet area, the parking slot allotted, the basic price, the payment plan you have chosen, and a rough possession timeline. For a buyer taking a home loan, it matters practically: most banks want to see the allotment letter as one of the first documents before they process the loan.

Here is what an allotment letter is not, and this is the part that protects you. It is not the registered agreement for sale. It does not, by itself, transfer any ownership or title to you — you learned in Lesson 9, The Types of Deeds, that even a full agreement to sale creates only a promise, not ownership, and an allotment letter is a lighter document still. It is a commitment to enter into the proper agreement, not the proper agreement itself. So a buyer who has "only" an allotment letter should not feel finished, and — the flip side — should not yet have paid more than the law allows against it. The allotment letter is the handshake; the registered Builder-Buyer Agreement is the contract. Let us look at one.

Below is a sample allotment letter for the Iyers' booking. Read it as the modest document it is — a reservation slip with a price on it — and notice the line near the bottom that promises the real agreement is still to come. That promise is exactly what Section 3 is about.

Two things to carry away from that specimen. First, the allotment letter already commits the Iyers to a payment plan — here, a construction-linked plan — which means the choice of plan (Section 10) is effectively made at booking, so it must be made with open eyes. Second, the letter records the booking amount received and states that the balance is payable "as per the agreement to be executed and registered." That single phrase is the allotment letter pointing at the law: it cannot ask for the real money until the real agreement exists. That is not the builder being generous; it is RERA.

You met RERA — the Real Estate (Regulation and Development) Act, 2016, and the state authority that registers projects and protects buyers — in Lesson 6, RERA, the Buyer's Shield, and you met the 10%-before-agreement idea again when you negotiated the token in Lesson 14. Here is where it stops being a principle and starts being real money on the Iyers' booking. Section 13 of RERA says something short and powerful: a promoter — the builder — shall not accept a sum of more than ten percent of the cost of the apartment as an advance payment or application fee from a person without first entering into a written agreement for sale with that person and registering that agreement.

Read that slowly, because two obligations are packed into it. One: there is a hard ceiling of 10% on what the builder can take before the agreement. Two: the agreement, when it comes, must be registered — signed before the sub-registrar and entered in the public record, the way you register any agreement of weight — not just a signature on the builder's paper. Both must happen before rupee number ten-percent-and-one leaves your account.

Why does the law draw the line exactly here? Because the agreement is where your protections live — the carpet area you are actually buying, the possession date, the penalty if the builder is late, the specifications promised. If a builder could take 40% or 50% of the price on nothing more than a one-page allotment letter, you would be deeply committed with none of those protections in writing, and your leverage to argue a clause would be gone. By capping the pre-agreement money at 10%, RERA guarantees you reach the negotiating table — the registered agreement — with most of your money still in your pocket. That is leverage the law hands you for free, and the whole of the next several sections is about using it: reading the agreement you are now entitled to read before you pay.

Now the document itself. The Builder-Buyer Agreement — everyone shortens it to BBA — is the master contract between you and the builder for an under-construction flat. In RERA's language it is the "agreement for sale," and for an under-construction unit it is the registered agreement that Section 13 requires before you cross 10%. It is long because it is trying to govern a two-year relationship in which you pay first and receive last: it fixes the flat, the price, the schedule, the specifications, the possession date, and what happens if either side fails. Think of it as the rulebook for the entire time your money is out and your flat is not yet built.

Here is the honest thing most first-time buyers are not told: the standard BBA a builder hands you is usually written by the builder's lawyers, for the builder. Left untouched, it tends to be one-sided — heavy penalties on you for a late payment, light or vague consequences for the builder's own delay; a possession "date" that is really a soft target wrapped in grace periods and force-majeure escape hatches; the right for the builder to alter the layout or the common areas; and forfeiture clauses that let it keep a large slice of your money if you walk away. None of this makes the builder a fraud. It makes the builder a counterparty who wrote the first draft. Your job is not to accept the draft as scripture but to read it, and to know which clauses are normal, which are negotiable, and which are red flags.

A reassuring counterweight: RERA has changed the ground under these agreements. Many states now publish a model agreement for sale, and courts and RERA authorities have repeatedly struck down the most abusive one-sided clauses as unfair — you will see this again in Section 15. So you are not arguing from zero. You are arguing from a legal baseline that increasingly says an agreement cannot be a trap. What follows is a walkthrough of a sample BBA, clause by clause, on the Iyers' own booking — first the whole document, so you can see its shape, then the clauses that matter, one at a time.

Here is a sample Builder-Buyer Agreement for the Iyers' flat. Do not try to read every line yet — take in the shape first, the way you would flip through a contract before reading it. Notice that it opens by naming the parties and the project's RERA registration, then identifies the exact unit and its carpet area, then the price broken into parts, then the payment schedule, then the possession date and the delay clause, then the specifications, and finally the clauses about what happens if things go wrong. That order is roughly standard, and the clauses tinted in the specimen are the ones this lesson reads with you. (The price lines carry acronyms — BSP, PLC, IDC/EDC — which the specimen spells out and Section 7 unpacks, so they need not trip you up here.)

One orientation note before we go clause by clause. A real BBA will have far more than the clauses shown — indemnities, definitions, a schedule of common areas, dispute-resolution boilerplate — and you should still skim all of it. But the clauses on this specimen are the load-bearing ones: get these right and you have protected yourself against the great majority of what actually goes wrong in an under-construction purchase. We take them in the order you meet them in the document, starting with who the parties are and, more importantly, exactly what area you are buying.

Parties and project. The agreement opens by naming the promoter (the builder entity — check that it is the same legal entity that holds the RERA registration and the title to the land, not a differently-named "marketing" company) and the allottees, here Rohan and Meera Iyer jointly. What it is: the identification of who is bound. What it does for the Iyers: because they are named jointly, both are buyers with rights, which matters for the women-co-owner stamp-duty concession they will use at registration (Lesson 25, Stamp Duty & Registration) and for succession later. Why it matters: if the entity signing is not the entity that owns the land and holds the RERA number, you are contracting with the wrong party — a classic tell we return to in Section 15.

The unit clause. The agreement identifies the exact flat: unit 704, seventh floor, the tower, and — the number to fix your eyes on — the carpet area of 720 square feet. Carpet area, which you met in Lesson 6, is the usable area within the walls of your flat; RERA makes it the mandatory basis for selling a home, precisely because the older "super built-up area" could be inflated almost at will. This is where the single most common under-construction trap lives, so we give it its own beat.

Why this matters in rupees, not just principle: everything downstream — the price, the GST, whether the flat even qualifies as "affordable" for a lower GST rate — is computed off the area figure. If the agreement lets a builder charge you for 1,000 super-built-up square feet while handing you 720 carpet square feet, you are paying for roughly 280 square feet of hallway and clubhouse share at flat rates. RERA's insistence on carpet area is not pedantry; it is the difference between knowing and not knowing what you bought. One related line to check on the agreement: the balcony or utility area is stated separately and is not part of the 720 square feet of carpet — it must never be quietly folded into the carpet figure to inflate the area you are billed on. With the unit and the true area pinned down, the next clause is the one everyone flips to: the price, and what it is actually made of.

The agreement value is ₹95,00,000, but that headline number is built from parts, and a good buyer reads the parts. The price clause of a BBA breaks the total into a base price plus a series of add-on charges, and knowing what each is tells you what is normal, what is negotiable, and what is padding. Let us open up the Iyers' ₹95,00,000.

The largest slice is the Base Selling Price — the BSP — the core price of the flat, quoted per square foot of carpet area and multiplied by the 720 square feet. On top of the BSP sit the preferential location charges, or PLC: extra amounts for a flat that faces the park, or is on a higher floor, or has a corner. A related one is the floor-rise charge — a small per-floor premium for higher floors. Then come the charges for what comes with the flat: a covered car-parking charge, a club or amenities charge, and often an infrastructure charge split as IDC and EDC — internal and external development charges, the builder's cost of laying roads, drainage and utilities inside and around the project. Finally there are the deposits and one-time payments the builder collects on behalf of others: an advance maintenance deposit, a share of the electricity and water connection charges, and a corpus or sinking fund for the future housing society.

Two things about this break-up are worth a buyer's attention. First, what is inside the ₹95,00,000 and what sits outside it. The GST is not part of the agreement value — it is charged on top, and we compute it in Section 11. Stamp duty and registration are also on top and go to the state, not the builder (Lesson 25). So the agreement value is the price of the flat-and-its-charges, and the true cash outlay is larger — a point we reconcile fully in Section 13. Second, some of these add-ons are negotiable and some are not: the BSP is what it is, but PLC, floor-rise and club charges are frequently where a buyer negotiates, and where a builder pads. You settled the negotiation in Lesson 14; here your job is simply to confirm the agreement's price break-up matches what you agreed, with no charge appearing that was never discussed.

Three clauses in the middle of the agreement decide how the two years actually feel: when you pay, when you get the flat, and what happens if the builder is late. They are the heart of the BBA.

The payment-schedule clause sets out how the ₹95,00,000 is to be paid over the construction period. For the Iyers, on a construction-linked plan, it is a table: a percentage on booking, a percentage on the agreement, then percentages tied to construction milestones — foundation, each set of floor slabs, brickwork, plaster, flooring and fittings, and a final slice at possession. This clause is the spine of Section 10 (which plan) and Section 12 (how the bank funds it), so we only flag it here: read it to confirm the instalments are tied to construction stages you can actually see, not to calendar dates or to the builder's say-so. A payment linked to "completion of the third-floor slab" is one you can verify with your own eyes; a payment due "on demand" is one you cannot.

The possession clause is the one buyers most want to be a firm date and builders most want to be soft. Read it with care, because its wording matters enormously. RERA requires the agreement to state the date by which the builder will hand over possession. But standard agreements wrap that date in cushions: a "grace period" — often six months — added on top of the stated date, and a force-majeure clause excusing delay for events outside the builder's control. Force majeure, literally "superior force," means genuinely uncontrollable events — a natural disaster, a government ban on construction, a court stay. That is fair in principle. The trap is a force-majeure clause drafted so broadly ("any circumstance beyond the promoter's reasonable control") that ordinary delays — a labour shortage, a funding gap, slow approvals — get smuggled in as excuses. A tightly-drafted possession clause names a real date, a bounded grace period, and a narrow, specific list of force-majeure events.

Why this beat carries so much weight: an under-construction purchase is the one big transaction where you perform first (you pay, for two years) and the other side performs last (it delivers the flat). The possession-and-delay clause is the only thing standing between you and an open-ended wait with your money gone. It will not stop a determined bad builder — that is the stalled-project territory of Lesson 34, When You Can't Pay the EMI — Default & Foreclosure, and RERA's Section 18 refund-and-interest remedy from Lesson 6 — but a fair, symmetric delay clause is your first and cheapest protection, agreed before anything goes wrong.

The specification schedule is the part of the agreement that says what you are actually getting built. It is usually an annexure listing the finishes and fittings: the flooring (vitrified tiles, or laminate, or the marble the show flat had), the kitchen platform, the bathroom fittings and their brands, the doors and windows, the paint, the lifts, the power backup, and the fixtures in the common areas. What it is: the promised quality, in writing. What it does for the Iyers: it converts the glossy show flat into an enforceable list, so "premium fittings" becomes a named brand and grade you can hold the builder to. Why it matters: without a detailed specification schedule, a builder can deliver a materially cheaper flat than the one you were shown, and you will have nothing in writing to argue with. Read it against the show flat and the brochure, and get specifics — brands and grades — not adjectives.

The RERA details clause records the project's RERA registration number, the authority it is registered with, and often the URL of the project's page on the state RERA portal. What it does for you: it is your key to the public record. With that number you can pull up, on the state RERA website, the approved plans, the promised completion date the builder filed with the regulator, the quarterly progress updates, and any complaints — exactly the diligence you did in Lesson 13. Confirm the number in the agreement matches the live project on the portal. A BBA that is vague about its RERA number, or whose number does not resolve to this project, is a serious warning.

Now the clauses to push back on — the ones that are normal to find in a first draft and reasonable to negotiate. Beyond the delay-penalty asymmetry you already met, watch for: a cancellation-and-forfeiture clause that lets the builder keep an unreasonable share of your money (a large fixed percentage plus interest plus brokerage) if you exit, while giving you little if it exits; a clause letting the builder unilaterally change the layout, increase the "super area," or add floors and load more common-area cost onto you; an obligation to take possession and start paying maintenance from the date the builder offers possession, even if you are disputing defects; a transfer clause charging a heavy fee if you sell before possession; and a jurisdiction clause forcing any dispute into a court far from where you live. None of these is automatically illegal. All of them are things a buyer can ask to soften, and a fair builder will discuss.

You have to choose how to pay for a flat that takes two years to build, and there are three broad ways builders offer. They look like pricing options. They are really risk options — each one puts the risk of the two-year gap in a different place — and the difference matters more than the small discounts attached to them. Let us take them in turn, then lay them side by side.

A construction-linked plan — CLP — ties your payments to construction milestones. You pay a booking amount, a slice on the agreement, and then a defined percentage each time the builder completes a stage you can verify: foundation, each floor's slab, brickwork, plaster, flooring, and a final slice at possession. Its whole logic is that your money goes out only as the building physically rises. If the builder stalls, your future instalments are not yet due, so you have not overpaid for work not done — and if you have a loan, the bank has not released money for a stage that does not exist. CLP is the plan that keeps your risk lowest, which is exactly why it is the most common and the one the Iyers have chosen.

A subvention scheme is the one that sounds too good and sometimes is. Marketed as "no EMI till possession," it works like this: you pay a small amount upfront, the bank sanctions your loan, and the builder — not you — pays the interest (the pre-EMI) to the bank during construction. You pay nothing monthly until you get the keys. The catch is structural: in a classic subvention, the loan is often disbursed to the builder largely upfront, not slab by slab, so a large sum is released against a building that barely exists — and the loan is in your name. If the builder stops paying that interest, or stalls, the liability lands back on you, and because the loan is yours, your CIBIL credit score takes the damage. The Reserve Bank of India and the National Housing Bank have cautioned banks against exactly this upfront-disbursal structure. Subvention moves your monthly cash pain to zero during the build, but it can move your total risk sharply up.

A down-payment plan asks you to pay most of the price — often around 90% — soon after booking, in exchange for the largest discount the builder offers. If you are paying cash and the builder is genuinely sound, the discount is real money. But you are handing over almost the whole price for a flat that does not exist, so your risk is highest of the three: your capital is locked, and if the project stalls you are the most exposed. The discount is the builder paying you to take on that risk.

This lesson does not tell you which plan to pick — that is your call, made with your builder and your finances. It tells you what you are actually choosing: a construction-linked plan buys you safety and costs you the discount; a subvention scheme buys you a cash-flow holiday and costs you exposure if the builder falters; a down-payment plan buys you the biggest discount and costs you the most risk. The Iyers, first-time buyers taking a large loan, have chosen CLP for the reason most cautious buyers do — it keeps their money in step with a building they can watch go up. The interactive at the end of this lesson lets you feel these trade-offs in rupees on their exact numbers.

Here is a cost that catches under-construction buyers by surprise, and it should not, because it is a fixed rate you can compute in a minute. Goods and Services Tax — GST — is charged on an under-construction flat, and it is not charged on a ready one. That single distinction, which you first met in Lesson 5, is worth understanding before the number: you are being taxed because you are buying a construction service — the builder is building something for you — and GST applies to that service. Once a building is complete and has its completion or occupancy certificate — or has been first occupied, whichever is earlier — a flat sold in it, with the whole price paid after that point, is treated as an immovable property, not a construction service, and carries no GST at all. Buy the same flat under construction and you pay GST; buy it a month after the OC and you do not. That is why an under-construction flat's headline price and its true cost diverge.

The rates, confirmed for 2026, are two, and both come with an important condition. For a normal (non-affordable) residential flat, GST is 5% of the price, with no input tax credit. For an affordable residential flat, it is 1%, again with no input tax credit. "No input tax credit," or no ITC, means the builder cannot pass on to you the GST it paid on cement, steel and other inputs as a discount on your GST — the 5% or 1% is the flat, final rate you pay, with nothing to net off. These rates have applied since April 2019, when they replaced an older system of 12% and 8% that did allow input credit. They are set by the GST Council and can change, so confirm them for the year you actually buy.

Is the Iyers' flat affordable, at the 1% rate, or normal, at 5%? The affordable category has two conditions and both must be met: the carpet area must be within 60 square metres in a metropolitan city (or 90 square metres elsewhere), and the price must be within ₹45,00,000. For GST, a "metropolitan city" here is a fixed, closed list — Bengaluru, Chennai, the Delhi-NCR area, Hyderabad, Kolkata and the Mumbai region — and everywhere else uses the more generous 90-square-metre limit. The Iyers' flat fails both. Its 720 square feet of carpet is about 66.9 square metres — above the 60-square-metre metro limit, and Bengaluru is a metro for this purpose. And at ₹95,00,000 it is well above the ₹45,00,000 price cap. So it is a normal residential flat, taxed at 5%.

So the Iyers owe ₹4,75,000 — four lakh seventy-five thousand — in GST, and here is the part that matters for the two years ahead: it is not paid in one lump at the end. GST is charged on each instalment as the builder raises it. When a construction-linked demand for, say, ₹14,25,000 comes due, the builder adds 5% GST of ₹71,250 to that demand, and you pay both. Across all the instalments the GST totals ₹4,75,000, but it flows out in step with the payment plan. And crucially, it is over and above the ₹95,00,000 agreement value — it is real extra cash the Iyers must budget for, not something carved out of the price. That reconciliation — price versus the true total outlay — is Section 13. But first, the other half of the money question: if the Iyers are paying ₹95,00,000 in instalments, and ₹72,00,000 of it is a bank loan, how does the bank actually release that loan against a building that is only half-built?

You met the machinery of the home loan in Lesson 16 — the sanction, the disbursement, and pre-EMI. Here is how that machinery behaves for an under-construction flat, where the loan cannot all go out at once because the flat is not all built at once. The key idea is construction-linked disbursal: the bank sanctions the whole ₹72,00,000 upfront, but releases it in tranches, each tranche tied to a construction stage, matching the builder's construction-linked payment plan. When the builder completes a stage and raises a demand, you request a disbursal; the bank sends a valuer or accepts an engineer's certificate confirming the stage is genuinely done, and only then releases its share of that instalment straight to the builder. The bank, like you, pays for what is built.

Whose money goes first in each instalment? On a ₹95,00,000 flat with ₹23,00,000 of own funds and a ₹72,00,000 loan, the loan is about 75.8% of the price and own funds about 24.2%. A common arrangement is that each construction demand is funded in that same ratio — the Iyers put in roughly a quarter and the bank releases roughly three-quarters — so their own money and the loan draw down together, stage by stage. (Some banks instead want your entire own-funds margin in first, before they release a rupee; the agreement and the sanction letter tell you which. We will use the proportional version here.)

Now the cost of borrowing during the build, which is where pre-EMI comes in. Because the bank has only released part of the loan at any given time, you do not yet owe a full EMI — a full principal-and-interest instalment on the whole ₹72,00,000. Instead, during construction you pay pre-EMI: interest only, and only on the amount the bank has actually disbursed so far. As each tranche is released, the disbursed balance rises, and so does the monthly pre-EMI. When the last tranche goes out at possession, the full loan is disbursed and your real EMI — principal plus interest on the whole ₹72,00,000 — begins. The timeline below walks the Iyers' six stages: what the builder demands, what the bank releases, the running loan balance, and the pre-EMI at each step. (The interest rate used is an illustrative 8.75% a year — within the 2026 range for floating home loans; how your own rate is actually set is Lesson 16.)

Read the totals at the bottom of that timeline, because they are the reason the payment plan you choose is really a risk-and-cost choice. Across the two-year build, the Iyers' pre-EMI on a construction-linked plan comes to about ₹5,74,875 — because their loan balance climbs gradually from ₹7,20,000 to the full ₹72,00,000, they are paying interest on a small balance early and the full balance only at the very end. Contrast that with a structure where the entire ₹72,00,000 is released to the builder upfront (as a subvention scheme often does): interest would run on the full ₹72,00,000 from day one — about ₹52,500 a month, or ₹12,60,000 over two years, more than twice as much. In a subvention scheme the builder pays that larger sum, which is precisely why it can afford to say "no EMI till possession" — and precisely why, if the builder stops paying it, so much more is at stake.

Let us now put every rupee in one place, because the gap between "the flat costs ₹95,00,000" and what the Iyers actually need is exactly where first-time buyers get caught. Start with the clean identity, the one that always holds: their own funds plus their loan equal the agreement value. ₹23,00,000 plus ₹72,00,000 is ₹95,00,000. That ₹23,00,000 of own money is their down payment — the price minus the loan — and it is fully consumed by the flat itself. So far, so tidy.

But the agreement value is not the whole cost, and this is the trap. On top of the ₹95,00,000 sit three more things. First, the GST of ₹4,75,000 from Section 11 — real cash, paid to the builder alongside the instalments, over and above the price. Second, the stamp duty and registration charges the Iyers will pay the Karnataka government to register the agreement and, later, the sale — a state cost, varying by state, computed in Lesson 25, Stamp Duty & Registration (with the women-co-owner concession the jointly-named Iyers can use). Third, the 1% TDS — tax deducted at source — that the buyer must withhold on a property over ₹50,00,000 and deposit with the government: 1% of ₹95,00,000 is ₹95,000, and this is Lesson 26, TDS on Buying Property. The TDS is not extra cost — it is carved out of what they pay the builder, so the builder receives ₹95,000 less and the government receives it instead — but the GST and the stamp duty genuinely are cash on top of the down payment.

The lesson in that reconciliation is the one Lesson 15, Budgeting the Purchase & Home-Loan Basics, warned about and this booking makes concrete: the down payment is not the last of your cash. A buyer who scrapes together exactly the ₹23,00,000 down payment and no more will be short by nearly ₹4,75,000 of GST plus stamp duty when the demands arrive. The Iyers, having read this far, know to hold the GST and the registration costs as a separate, additional reserve — so that the agreement value is the price of the flat, and the true cost of owning it, arrived at with clear eyes, is meaningfully more. Now, with the money understood, we turn to the danger — the ways an under-construction booking is used against buyers, and how to see them coming.

The dangers at the booking stage are rarely a masked-villain fraud. They are usually quieter — a clause, a demand, a scheme that is legal-looking on its face but tilts the deal against you, and that you agree to because you did not know it was negotiable or against the rules. Here are the four that catch under-construction buyers most, and how to see each one coming.

The first is the one-sided agreement itself — the delay-penalty asymmetry from Section 8 made concrete: you pay 18–24% interest if you are late, the builder pays a token or nothing if it is; a forfeiture clause that lets the builder keep a large slice if you exit; a possession "date" so wrapped in grace periods and a sweeping force-majeure clause that it is really a range with no floor. The tell is asymmetry — read every consequence clause and ask, "what is the mirror version for the builder?" If your penalties are heavy and the builder's are light or missing, the agreement is loaded.

The second is the super-built-up switch: you are sold on carpet area in conversation and in the RERA-mandated brochure, but the agreement quietly prices or describes the flat on super built-up area, so you pay flat rates for hallways and clubhouse share. The tell is a mismatch between the area you were shown and the area the agreement uses — check that the BBA states carpet area and that the price is worked on carpet. The third is the collapsing subvention scheme: "no EMI till possession" is real only as long as the builder keeps paying the interest; when a shaky builder stops, the loan is yours, your CIBIL score is hit, and the "no EMI" promise evaporates. The tell is a subvention offer from a builder whose finances or track record you have not independently verified — the scheme is only as sound as the builder behind it.

The fourth is the demand beyond the 10% cap: a builder asking for 20%, 30% or more "to confirm the booking" before there is a registered agreement for sale. This is not merely pushy — it is against Section 13 of RERA. The tell is any demand that takes you past 10% of the price with no registered agreement in hand. Cap what you pay at 10%, and insist the registered agreement comes first.

If you are reading this having already signed a lopsided Builder-Buyer Agreement, or already paid the builder more than 10% before any registered agreement existed, stop and take a breath — because your situation is far more recoverable than it feels, and almost none of it is your fault. These agreements are written by professionals to be signed quickly by people who have never seen one, in an office designed to make you feel that everyone signs the standard form and you should too. Feeling that you should have known is the system working as designed. Set that down. It is not accurate, and it is not useful.

Here is what is actually true about where you stand. A one-sided clause you signed is not automatically enforceable against you. RERA authorities and the courts have, repeatedly and specifically, struck down the abusive clauses in builder agreements — the lopsided delay penalties, the unfair forfeiture terms — as exactly the kind of unfair contract a regulator exists to correct. The Supreme Court and RERA benches have held that a buyer is not bound by a grossly one-sided term merely because they signed the builder's standard draft. So a signature on a bad clause is not the end of the argument; in many cases it is the beginning of a complaint you can win.

And if the harm is a delay — the builder has blown past the possession date — you have a specific, powerful remedy: Section 18 of RERA lets you claim either a full refund with interest, if you want out, or interest for every month of delay if you want to keep the flat. You met this in Lesson 6, and its full use in a stalled project is Lesson 34, When You Can't Pay the EMI — Default & Foreclosure, and its neighbours. You do not have to fight alone, either: where many buyers in one project are hit, they group together as an allottees' association, which carries far more weight before RERA and, if it comes to it, in insolvency proceedings where homebuyers are treated as financial creditors. The move now is the same as in Section 14 — gather your documents, file with your state RERA authority, and, if the project is genuinely stalled, connect with the other buyers. What was done to you is common, named, and provided for. That is not a comfort cliché; it is the legal reality, and it is on your side.

When something is wrong with an under-construction booking, the right first stop depends on what went wrong — and the honest truth is that most of these channels work, but not quickly. Here is the ladder, from the closest and cheapest to the last resort, with a straight word about timelines.

Start with the builder. A surprising amount is resolved by a written, specific grievance to the builder's office — a clause you want amended before signing, a demand that exceeds the 10% cap, a receipt you were not given — put in writing (email, so there is a record) rather than argued at the desk. Keep it factual and cite the rule. If that fails, climb to the regulator. For almost every under-construction problem — a one-sided agreement, over-collection before the registered agreement, a missed possession date, a refund claim — your state RERA authority is the main forum. Filing is designed to be doable without a lawyer, through the state RERA portal, and the fees are modest. Alongside RERA, for a deficiency-of-service or unfair-contract complaint, the consumer forum is available — District, State or National depending on the amount at stake — and buyers are allowed to pursue RERA and the consumer forum as concurrent remedies. For your home loan or a subvention gone wrong, the bank's grievance cell and then the RBI Banking Ombudsman handle disputes with the lender. And for outright fraud — money taken for a non-existent or unregistered project — the police and the Economic Offences Wing, not a civil forum, are the route.

Free and low-cost help exists and is underused: the state RERA portal itself walks you through filing; the National Consumer Helpline (1915) gives free guidance; the bank's grievance cell costs nothing; and many states have legal-aid services and buyer associations that help without a lawyer's fee. A paid property lawyer is worth it when the sum is large, the agreement is being litigated, or you are leading an allottees' group — but a great deal can be done before you get there.

The questions real under-construction buyers ask, in plain terms.

"What exactly is a Builder-Buyer Agreement, and is it the same as the agreement for sale?" Yes, in substance. The BBA is the master contract between you and the builder for an under-construction flat, and in RERA's language it is the "agreement for sale" — the registered agreement that must exist before you pay past 10% of the price. It fixes the flat, the carpet area, the price break-up, the payment schedule, the possession date and delay penalty, and the specifications. It is long because it governs a two-year, pay-first-receive-last relationship.

"How much GST will I pay on my under-construction flat?" For a normal residential flat, 5% of the agreement value, with no input tax credit — for the Iyers' ₹95,00,000 flat, that is ₹4,75,000. For an affordable flat (carpet within 60 square metres in a metro or 90 elsewhere, and price within ₹45,00,000), it is 1%. It is charged on each instalment as you pay it, and it is over and above the price. A ready flat that already has its Occupancy Certificate carries no GST at all.

"Can the builder really ask for more than 10% before we sign the agreement?" No. Section 13 of RERA bars a builder from taking more than 10% of the flat's cost as an advance without first executing and registering the agreement for sale. On a ₹95,00,000 flat that ceiling is ₹9,50,000. A demand beyond that, with no registered agreement in hand, is against the law — cap your payment at 10% and insist the registered agreement comes first.

"CLP or subvention — which is safer for us?" A construction-linked plan is the lower-risk choice, and it is why most cautious buyers pick it: your money (and the bank's) goes out only as the building physically rises, so you never pay far ahead of the work. A subvention scheme's "no EMI till possession" is genuinely attractive on cash flow, but it usually means the loan is released early against a barely-built flat, and if the builder stops paying the interest, the liability — and the credit-score damage — is yours. Safer, for most first-time buyers, is CLP.

"How does the bank release the loan if the flat isn't built yet?" In tranches, tied to construction stages — construction-linked disbursal. The bank sanctions the whole loan upfront but releases its share of each instalment only after confirming, through a valuer or an engineer's certificate, that the stage it is paying for is actually complete. The money goes straight to the builder, stage by stage, matching your payment plan.

"Do I pay a full EMI while the flat is under construction?" Usually not — during the build you pay pre-EMI, which is interest only, and only on the portion of the loan disbursed so far. Because the disbursed amount rises stage by stage, your pre-EMI rises too, and your full EMI (principal plus interest on the whole loan) begins when the last tranche is released at possession. Remember that pre-EMI builds no equity — none of it reduces your principal. Some buyers who can afford it opt to pay full EMIs during construction instead, which do chip at the principal (the depth of that choice is Lesson 16).

"The brochure sold me on carpet area but the agreement talks about super built-up — is that allowed?" RERA requires the sale to be made on carpet area — the usable area within your walls — and the agreement must state it. A builder may mention super built-up area for reference, but the price and the sale must be on carpet. If the agreement prices the flat on the larger super-built-up number, you are paying flat rates for common space; check that the BBA states the carpet area and that the price is worked on it.

"What's the difference between the allotment letter and the agreement?" The allotment letter is the builder's early confirmation that a specific flat is reserved for you against your booking amount — a commitment to enter into the agreement. The registered Builder-Buyer Agreement is the binding contract with all your protections in it. The allotment letter is the handshake; the agreement is the contract. Do not treat the allotment letter as the finish line, and do not pay past 10% of the price on the strength of it alone.

"The possession clause gives a date 'with a grace period' — what does that really mean?" It means the stated date is not the whole story. A grace period — often six months — is added on top before the builder is formally 'late,' and a force-majeure clause can excuse delay beyond that for genuinely uncontrollable events. That is normal in moderation; the danger is a grace period stacked with a sweeping force-majeure clause that turns the 'date' into an open-ended range. Read for a real date, a bounded grace period, and a narrow, specific list of force-majeure events — and check that the builder owes you delay compensation that mirrors the interest it charges you.

"Should I pay the GST and stamp duty out of the same money as my down payment?" No — budget them separately. Your ₹23,00,000 down payment is the price minus the loan and is fully used up by the flat itself. The GST (₹4,75,000 for the Iyers) and the stamp duty and registration are cash on top of that. A buyer who saves only the exact down payment will be short when those demands arrive. Hold the GST and registration costs as a separate reserve.

That done, put the two skills that matter most from this lesson — choosing a payment plan and reading its true cost — to work on the Iyers' exact numbers, in the Check Yourself below.

This is the one interactive of the lesson. It is pre-filled with the Iyers' booking — the ₹95,00,000 flat, the ₹72,00,000 loan, an illustrative 8.75% rate and a two-year build — and it computes the down payment, the GST, and the RERA 10% cap for you. Toggle the three payment plans and watch what moves: not just the monthly cost, but where the risk sits. On the construction-linked plan the pre-EMI you pay is about ₹5,74,875; switch to subvention and your out-of-pocket drops to ₹0 while the builder shoulders about ₹12,60,000 — and the risk quietly shifts onto you. Clear it and enter your own numbers, or restore the Iyers' example at any time.

That closes the lesson's content. Return to where it began: the Iyers at the glass table, a thick agreement in front of them and lakhs about to move for a flat that is a pit and some rebar. They are not helpless there, and neither are you. They know a builder cannot take more than ₹9,50,000 before a registered agreement they are entitled to read. They know the eight clauses that matter and which run against them. They know their GST is ₹4,75,000, why, and that it sits on top of the price. They know their money and the bank's will go out slab by slab, and what the pre-EMI costs. The booking desk is not a place where a thick agreement is done to you. With this lesson, it is a place where you know exactly what you are signing, and why.

Every term introduced in this lesson, in one place. If any still feels shaky, the section that teaches it is a scroll away — this is the vocabulary of your own booking.