Property and seller identity
Make sure the payment refers to one clearly identified property, seller / authorised party and transaction. A vague receipt tied only to a project / locality name creates avoidable ambiguity.
Property Buyer's Handbook · Transaction
Before paying a token advance, make the property questions and payment consequences visible.
An early payment can create momentum before the buyer has enough evidence. Before paying, identify the exact property and seller, the unresolved diligence issues, the purpose and legal wording of the payment, the conditions for the next stage and what happens if the transaction does not proceed.
Direct answer
Before paying, check eight things: exact property / seller, current diligence status, payment purpose, amount / route, conditions, refund / forfeiture terms, commercial timeline and seller-side authority.
The key question is not whether a “token” is customary. It is what this specific payment does under the actual written transaction and whether the property has earned that commitment.
Eight checks before payment
Make the payment part of the diligence process.
Buyer’s current diligence position
List what has already been reviewed and what remains open: title / documents, survey / boundary, access, planning / approvals, physical condition, finance and any specialist work.
Purpose of the payment
Clarify whether the sum is described as token, booking amount, earnest money, advance, application fee or another payment - and have the legal effect of the actual wording reviewed.
Amount and payment route
Record the exact amount, payee, account / instrument, date and payment evidence. Avoid informal or unexplained payment paths.
Conditions before further payment
State which documents, professional conclusions, finance steps, seller obligations or rectification items must be satisfied before the buyer pays more or signs the next document.
Refund / forfeiture language
Do not rely on oral statements such as “fully refundable”. The buyer’s lawyer should review the written consequences of withdrawal, default, failed diligence, finance failure or seller non-performance.
Price, inclusions and timeline
Record the agreed price position, included fixtures / assets, possession expectations and the proposed sequence for agreement, diligence, registration and handover.
Authority to accept / sign
Confirm the person receiving money or signing a receipt / term document has the appropriate authority for the seller side; route the legal conclusion to the buyer’s lawyer.
RERA context
The 10% rule is not a universal rule for every property transaction.
Section 13 of the Real Estate (Regulation and Development) Act, 2016 states that a promoter shall not accept more than 10% of the cost of the apartment, plot or building as advance / application fee without first entering into a written and registered agreement for sale.
That provision belongs to the promoter / RERA statutory context. Do not automatically apply it to every resale, private land or other non-project transaction. The buyer’s lawyer should determine the applicable legal framework.
Stop / escalate
Do not treat these as routine seller-side requests.
- the property / seller identity is still ambiguous;
- material title, access, survey, approval or physical-condition questions are known but have no agreed condition or resolution path;
- the buyer is told the payment is “standard” or “non-refundable” without seeing the proposed written terms;
- the recipient / bank account does not align with the documented seller / authorised party and the discrepancy is unexplained;
- the seller will not issue a clear written acknowledgement of the payment and purpose;
- a large payment is being used to force urgency before the buyer’s lawyer can review the transaction terms;
- the buyer is relying on an RERA rule without first confirming that the transaction / promoter context actually falls within that rule;
Readiness outcome
The answer does not have to be “pay” or “walk away”.
Pay
The buyer has intentionally accepted the remaining risk, the payment terms are reviewed and the next-stage conditions are clear.
Pay only with conditions
The payment proceeds only under written conditions that preserve identified buyer protections / dependencies.
Investigate first
The property may remain viable, but the evidence is not strong enough to justify even an early payment.
Renegotiate terms
The buyer may proceed if amount, refund / forfeiture, timeline, conditions or seller obligations change.
Do not pay
A material contradiction, unacceptable term or unresolved legal / property issue makes the payment premature.
Commitment should follow evidence
Do not pay merely to preserve momentum.
Make the written payment terms, unresolved property questions and conditions for the next stage visible before the buyer commits funds.
See Transaction Coordination