One of the most common questions property buyers ask is:
Should the payment for a resale flat be made before registration or after registration?
The answer is that the payment can be made either before or after registration, depending on the mutual understanding between the buyer and seller. However, the mode of payment is extremely important.
Preferred Modes of Payment
- Banker's Cheque (Pay Order)
- Demand Draft (DD)
Avoid
- Cash payments
- Personal/Individual cheques
If the Buyer is Availing a Home Loan
In most home loan transactions, the bank's representative will be present at the Sub-Registrar Office during the registration process.
The usual procedure is:
- The sale deed is registered.
- The registered sale deed is handed over to the bank representative.
- The bank representative then hands over the Banker's Cheque/DD to the seller.
In such cases, the payment is effectively made after the registration is completed.
If the Buyer is Purchasing Through Self-Finance
When the buyer is using personal funds, the payment is generally made immediately before or after the registration of the sale deed.
It is advisable to:
- Use a Demand Draft (DD) or Banker's Cheque.
- Avoid payment through personal cheques.
Importance of Mentioning DD Details in the Sale Deed
It is highly recommended to mention the Demand Draft number, date, issuing bank, and amount in the sale deed.
This serves as documentary evidence and can help establish proof of payment in the event of:
- Unrecovered dues
- Future disputes
- Failure to hand over possession
- Litigation between the parties
Typical Payment Structure for a Resale Property
1. Token Advance
A small booking amount is paid to confirm the deal.
Typical range: Rs.10,000 to Rs.50,000
2. Payment at the Time of Sale Agreement
Generally, 5% to 20% of the sale consideration is paid when the Sale Agreement is executed.
Example:
If the property value is Rs.50 lakh, the advance payment may range from Rs.2.5 lakh to Rs.10 lakh.
3. Before Fixing Registration
Before scheduling the registration, the buyer should demonstrate readiness to pay by showing the Banker's Cheque/DD for the balance amount to the seller.
4. At the Sub-Registrar Office
The balance sale consideration is paid by handing over the DD/Banker's Cheque either immediately before or immediately after registration, as mutually agreed.
5. Handover of Property
After receiving the full consideration, the seller hands over:
- Original property documents
- Keys to the property
- Possession of the property
This completes the transaction.
Payment Terms Should Be Clearly Defined
The payment schedule should be mutually agreed upon by the buyer and seller and clearly recorded in the Sale Agreement.
The agreement should specify:
- Number of payments
- Payment dates
- Amount payable at each stage
- Mode of payment
Having a clearly drafted Sale Agreement helps avoid misunderstandings and protects the interests of both parties.
Need Assistance?
We provide end-to-end assistance for drafting and executing Sale Agreements, registration support, and complete resale property transactions.
PGN Property
https://pgnpropertymanagement.in/services/
Email: pgnproperties@gmail.com
WhatsApp: +91-97424 79020
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