Where Your Money Actually Sits Between Paying And Possession आपका पैसा भुगतान और कब्ज़े के बीच वास्तव में कहाँ रहता है ਜਿੱਥੇ ਤੁਹਾਡਾ ਪੈਸਾ ਅਸਲ ਵਿੱਚ ਭੁਗਤਾਨ ਅਤੇ ਕਬਜ਼ੇ ਦੇ ਵਿਚਕਾਰ ਬੈਠਦਾ ਹੈ

You pay a booking amount. Then instalments, for two or three years, against a building that does not exist yet. Somewhere in that period you will have handed over most of the price of the property and received nothing at all.

Where is that money?

It is a reasonable question and almost nobody asks it, because the answer feels like it should be obvious. It is not obvious, and more importantly it is not one answer. In this market the money goes to three completely different places depending on what you are buying, with three completely different levels of protection, and the difference only becomes visible when something goes wrong.

Route one: a registered project

If you are buying in a project registered with Punjab RERA, the law is specific about where your money goes.

Under Section 4(2)(l)(D) of the Real Estate (Regulation and Development) Act, 2016, the promoter must file a declaration on affidavit that seventy percent of the amounts realised from allottees will be deposited in a separate account with a scheduled bank, to cover the cost of construction and the land cost, and used only for that purpose. The account is project-specific, which means receipts from one project cannot legally fund another. The remaining thirty percent is unrestricted.

What matters more than the seventy percent is how money leaves that account. Under the second proviso to the same section, the promoter can only withdraw in proportion to the percentage of completion, and only after three separate professionals certify it: an architect on the physical progress, an engineer on the cost actually incurred, and a chartered accountant in practice on the proportion that may be drawn.

Read what that does. A promoter cannot draw against flats that are sold but not built. Money comes out at the speed the building goes up, and three people have to sign to say so. The promoter is also required to have the accounts audited within six months of the end of each financial year, verifying that amounts collected for a project were used on that project.

That is the theory, and it is a good theory. Whether it happens is a question about enforcement rather than about the rule.

The rule you can enforce yourself, before you pay

Section 13(1) is the shortest useful provision in the Act. A promoter cannot accept more than ten percent of the cost of the apartment, plot or building as an advance payment or application fee without first entering into a written agreement for sale and registering it.

Ten percent. Not thirty, and not whatever the sales desk says is normal this quarter. The agreement has to be registered, not merely signed, before the eleventh percent can be demanded.

This is worth knowing because it is the one protection that operates before your money is anywhere at all. Authorities elsewhere have enforced it. In a Rajasthan case from 2020, a promoter had taken fifteen percent without executing an agreement and then issued a demand note for a further thirty-five percent. The Authority directed that an agreement be executed and registered before anything further could be demanded or accepted.

The detail worth noting is whose project it was. It was a Jaipur Development Authority project, registered with RERA, and the Authority held that all provisions of the Act, including Section 13, applied to it.

Which leads directly to the point most Mohali buyers get wrong.

Route two: a GMADA scheme, which is not outside the Act

The Act does not carve out development authorities. Section 2(zk)(iii) defines "promoter" to include any development authority or other public body, in respect of allottees of buildings or apartments it constructs, or plots it owns or that are placed at its disposal by the Government, for the purpose of selling.

That is GMADA, in plain statutory language, for both flats and plots.

So the money in a registered GMADA scheme is not simply sitting with the authority under its own rules. The separate account, the proportional drawdown, the certification chain, the ten percent ceiling and the delay interest all apply, and buyers have enforced them against the authority itself.

In Amandeep v. GMADA, a complainant who bought a 256 square yard plot in Sector 83 Alpha at a 2016 auction, with possession promised for 2017, obtained an order in February 2025. GMADA did not comply. The complainant filed an execution application in October 2025, and in January 2026 Punjab RERA issued a Recovery Certificate to the Mohali Deputy Commissioner for ₹25,89,659 under Section 40, recoverable as arrears of land revenue from GMADA's assets, with Jamabandi and Farad copies of the project land attached to enable the recovery. GMADA was named the judgment debtor and treated as a defaulter.

Above that sits the Supreme Court. In GMADA v. Anupam Garg, decided in June 2025 and arising from GMADA's Purab Premium Apartments scheme in Sector 88, allottees recovered their entire deposits with interest. The Court did trim what could be claimed, holding that a promoter is not obliged to separately reimburse interest a buyer paid on a personal home loan. But a public development authority received no concession that a private promoter would not have received.

So the risk in Route two is not that the money is unprotected. It is that the counterparty is a state authority whose acquisition programme, litigation and financing all bear on when your plot gets serviced, and which is capable of ignoring an order until a Recovery Certificate is issued against its own land.

The dividing line that actually matters here is not authority against private promoter. It is registered against unregistered. A registered scheme carries the full apparatus whoever runs it. An allotment or auction outside a registered project carries none of it, and the money goes into the authority's general pool rather than a ring-fenced account. Our comparison of GMADA, PUDA and RERA sets out which body does what.

Route three: an LOI resale, where there is no account at all

This is the one the market talks about least and it is where the most money moves with the least structure.

When an entitlement changes hands in the Aerotropolis pockets, the buyer pays a private seller. Not an escrow account, not a promoter's designated account, not the authority. The money goes directly to whoever held the instrument, and GMADA's involvement begins afterwards, when it processes the transfer and issues a fresh document in the new holder's name.

There is no seventy percent rule here because nobody is collecting for a registered project. There is no drawdown certification because there is no construction to certify against. There is no ten percent cap because Section 13 governs promoters, and a transfer between two private parties has none.

None of that makes an LOI transaction improper. It is a lawful, recognised transfer with its own procedure, which our guide to GMADA transfers sets out. What it means is that the protections people assume are in the background of any property purchase are simply not present in this one, and the safeguards have to come from the transaction itself: the ledger check, the encumbrance position, the litigation status of the parcel, and the sequencing of payment against the authority's transfer being recorded. Current rates in the pockets that trade sit on our LOI price tracker.

What the local record shows when this fails

Punjab has three documented illustrations, each at a different point on the scale.

Money paid, building not delivered. In the Punjab RERA order over a New Chandigarh flat, the buyers had paid ₹58,60,470 of a ₹72,18,480 consideration by July 2019, more than eighty percent, and possession never came. The Authority awarded delay interest running at over ₹52,000 a month until possession is handed over.

Money collected outside the structure entirely. In the ED's case concerning Suntec City, which we covered in our report on the CLU trail, the agency has alleged sales exceeding ₹200 crore before registration with and approval from the Authority, and that possession was handed over without completion or occupancy certificates. Membership of a society is not ownership of land, and a receipt is not a conveyance.

And money paid to a developer who ceased to exist. In Sectors 100 and 104, roughly 1,300 allottees had around ₹600 crore invested in a project whose promoter company was attached following a CBI investigation, and it took an order of the Supreme Court to name anybody responsible for developing the land, as our article on civic responsibility set out.

What you can actually establish

Four things, all checkable before the money moves.

Whether the project or scheme is registered, which determines whether any of the Act's protections apply. That is on the Punjab RERA portal along with the possession date on record, and it applies to a GMADA scheme exactly as it does to a private one.

Which account you are being asked to pay into, and whether it is the project's designated account. A promoter subject to Section 4(2)(l)(D) has one, and there is no reason not to be told what it is.

Whether the demand exceeds ten percent before a registered agreement for sale. If it does, the ceiling is statutory and refusing is not an unreasonable position to take.

And, for a resale or a transfer rather than a first sale, that your payment is sequenced against the authority actually recording the change. Our buyer's guide covers the document set.

The uncomfortable summary is that the protections vary enormously between things that look similar in a listing, and not along the line most buyers assume. A registered project has a statutory account, a certification chain and an audit, and that holds whether the promoter is a builder or a development authority. An unregistered allotment has the seller's balance sheet and its timetable. A transfer of an entitlement has whatever the two parties put in place themselves. Knowing which of the three you are in is not a technicality. It is the answer to where your money is.

None of the above is financial or legal advice, and the position in any particular transaction turns on its own facts.

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Sources

- Real Estate (Regulation and Development) Act, 2016, India Code, for the text of Sections 2(zk), 4, 13, 18 and 40
- FinMin asks PSBs to ensure compliance in withdrawal from RERA accounts, Business Standard, March 2024, on the certification requirement and what each professional certifies
- Is Section 13 of the RERA Act a mandatory requirement?, SCC Online, on Rajasthan RERA complaint RAJ-RERA-C-2020-3622 decided 22 September 2020, and the application of Section 13 to a development authority project
- RERA attaches GMADA assets, orders recovery of Rs 25.89 lakh over delay in plot possession, The Tribune, 19 January 2026, on Amandeep v. GMADA, the Recovery Certificate, the Section 40 route and the attachment of GMADA's assets
- Greater Mohali Area Development Authority v. Anupam Garg, 2025 INSC 808, Supreme Court Observer, on the refund with interest in GMADA's Purab Premium Apartments scheme and the limits on claiming home loan interest
- RERA slaps Omaxe with Rs 34.81 lakh penalty for delay in handing New Chandigarh flat possession, Nitin Jain, The Tribune, 16 June 2026, for the amounts paid and the delay interest awarded
- ED arrests Punjab real estate businessman in land fraud case, ETV Bharat, 23 May 2026, on the alleged pre-registration sales