Do You Need to Pay a Token Amount for Buying a Flat?


Buying a house is a dream of every Indian, but only a handful of people succeed in attaining this goal. This is because of the high property prices, rising interest rates on home loans, and the complicated policies related to home registration. Although the introduction of PMAY has simplified the home buying process for a lot of users, many buyers do not step ahead towards buying their house due to the lack of knowledge about the home. A common dilemma for homebuyers is whether to pay token money to the home seller.

Well, in most cases booking an under-construction flat requires you to pay a token amount which is typically 2 to 2.5% of the property’s price. Well, at this stage, the home registration process cannot be processed. Therefore, you should keep a written proof regarding the payment of token receipt. Otherwise, you might not get a refund in any case of any default by the seller.

To pay the token money, you can use either of the following instruments/documents

(a) Payment Receipt: A payment receipt can be printed on a stamp paper worth ₹2 or ₹10. The payment receipt should comprise the sign of the seller.

(b) MOU (Memorandum of Understanding): Although an MOU is not a legal agreement, it is a basic agreement that mentions the intent of both the buyer and seller. It should be signed by both parties and at least 2 witnesses.

On a final note, we suggest you pay the token money through bank transfer and avoid paying it through cash. Whether you are issuing a payment receipt or signing an MOU, do mention the amount of token money. Also, mention the timeline for execution of the sale deed and the penalty in case the seller breaks his promise.

Conclusion- If you are looking to buy an under-construction flat in Jaipur or any other city, you need to pay a token amount in order to book the property. Make sure you ascertain the credibility of the seller before paying the token money to him and pay the money through the banking channel. Also, keep proof of the payment of token money.

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