Paying an individual builder without RERA registration requires extra caution — because you lose the legal protections that RERA offers (like guaranteed possession timelines, quality, and refund clauses).
Here’s a safe payment guide and what you should definitely do before paying:
⚠️ Risks Without RERA Registration
- No accountability for delays or quality.
- Refunds become difficult if builder defaults.
- No penalty for false promises or change of plan.
- Limited legal recourse without going to consumer court (time-consuming).
✅ Safe Payment Tips for Non-RERA Individual Builders
📝 1. Do Thorough Legal Verification
- Title deed in builder’s name? (Check with lawyer)
- Construction approval from local body? (Municipality / Panchayat / HMDA / DTCP)
- Encumbrance certificate (EC) – No dues on land?
- Land conversion done (residential, not agricultural)?
- Verify layout & building plan approvals.
🔍 Pro Tip: Hire a property lawyer for ₹5K–₹15K to verify everything.
💰 2. Never Pay Large Amounts Upfront
Break the payment into milestones based on work completion, such as:
| Stage | % Payment (Suggested) |
|---|---|
| Token / Booking | 5% |
| Agreement + Land Documents Cleared | 10–15% |
| Foundation / Basement | 10–15% |
| Roof Slab (each floor) | 10–15% |
| Brickwork Completion | 10% |
| Plaster + Electrical/Plumbing | 10% |
| Flooring + Painting | 10% |
| Final Handover (with all certificates) | 10% |
📑 3. Always Have a Written Agreement
Even if not under RERA, you must have:
- Builder-Buyer Agreement with:
- Property details
- Total cost with breakup
- Payment terms
- Completion timeline
- Penalty for delays
- Warranty clause (structural for 5 yrs as per RERA standard)
- Mention borewell, compound wall, tiles, electrical points, etc.
- Get it notarized or registered if possible.
📦 4. Ask for and Keep All Receipts
- Each payment must be:
- Via bank transfer / cheque (no cash if possible)
- With a receipt and builder’s signature
- With GST included, if applicable
🔐 5. Ask for Collateral or Security
If you’re paying large amounts early:
- Ask for part ownership transfer (like land registration first)
- OR keep a post-dated cheque/security agreement in case of non-completion
🧾 6. Avoid These Mistakes
❌ Paying more than 20–30% without any registration
❌ Trusting verbal promises (always document everything)
❌ Ignoring construction approvals and legality
❌ Accepting only “Builder’s format” of agreement — always have it legally reviewed
👷 7. Ask for Builder Commitments in Writing
- Borewell depth and water guarantee
- Electrical fitting brands
- Flooring material
- Wall thickness, doors/windows quality
- Handover date + compensation clause for delay
📌 Optional: Advance Agreement Format
Would you like a:
- Sample Builder Agreement Draft (for individual house)?
- Printable Payment Milestone Tracker?
- Legal verification checklist before payment?