Maharashtra’s 80% Rule: What Homebuyers Should Know

Maharashtra is considering a major change in the way property developers collect money from homebuyers.

The state government is planning an amendment that could restrict developers from collecting more than around 75–80% of the property’s total consideration before the project’s final completion and registration. The remaining amount could be retained by the buyer until the final registration stage.

The proposal is aimed at reducing the financial risk faced by homebuyers, particularly those purchasing under-construction properties.

The development is important for Mumbai because the city’s property market has a large under-construction segment, where buyers often commit substantial amounts of money years before receiving possession.

According to recent reporting, the Maharashtra government is looking at amendments to the Registration Act that could prevent developers from taking the entire property consideration before completion. The exact percentage and implementation mechanism will depend on the final legislation or notification.

What Is the Proposed 80% Rule?

Under the proposal being discussed, a developer may be allowed to collect only around 75–80% of the property’s total consideration before final registration.

For example, suppose a homebuyer purchases a flat worth ₹1 crore.

Under a possible 80% framework:

• Property value: ₹1 crore
• Maximum amount before final registration: around ₹80 lakh
• Amount retained until registration: around ₹20 lakh

The exact structure should not be assumed until the government formally notifies the provision.

The key idea is that the buyer would retain a meaningful financial stake until the property reaches the final stage of the transaction.

Why Is This Important for Homebuyers?

Buying an under-construction home involves a major financial risk.

A buyer may begin paying for the property while construction is still underway. If the project faces delays, approval problems, funding issues or other difficulties, the buyer may have already paid a significant portion of the purchase price.

The proposed mechanism could change that risk equation.

If 20% of the consideration remains payable until final registration, buyers may have greater financial leverage during the final stage of the transaction.

This does not eliminate project risk.

It also does not mean buyers should stop checking the developer’s track record or project documents.

Instead, it could become an additional layer of protection.

What Could It Mean for Mumbai Buyers?

Mumbai has one of India’s most expensive residential markets.

For a ₹2 crore apartment, 20% represents ₹40 lakh.

For a ₹3 crore apartment, it represents ₹60 lakh.

Therefore, even a relatively small change in the payment structure could have a substantial financial impact on buyers.

For example, a buyer who is purchasing a ₹2 crore under-construction apartment could potentially retain around ₹40 lakh until the final registration stage if the final rule establishes an 80% threshold.

That could reduce the amount of money exposed before the property reaches its final legal and completion stage.

Will This Stop Delays?

Not necessarily.

This is one of the most important points homebuyers should understand.

A payment restriction cannot by itself guarantee timely possession.

Construction delays can happen because of approvals, financing, litigation, contractor issues, changes in plans or other circumstances.

The buyer must therefore continue to examine the possession date, construction progress and contractual remedies.

MahaRERA itself requires promoters to keep important project information updated, including construction progress, building details, documents, encumbrances and completion dates.

What Should Buyers Check Before Booking?

Even if the proposed rule becomes law, buyers should conduct their own due diligence.

1. Check MahaRERA Registration

Search the project on the official MahaRERA portal.

MahaRERA provides facilities for homebuyers to search registered projects and access project-related information.

2. Check the Completion Date

Don’t rely only on a sales representative’s verbal promise.

Compare the proposed possession date with the project’s official MahaRERA information and the Agreement for Sale.

3. Read the Agreement for Sale

The agreement should clearly specify the property, carpet area, consideration, payment schedule, possession terms and other important obligations.

4. Check Approvals

Buyers should verify whether the relevant approvals and commencement certificates are in place.

MahaRERA’s project-registration requirements include approvals, commencement certificates, sanctioned plans, project details and the proposed Agreement for Sale.

5. Examine the Developer’s Track Record

A large brand name should not replace due diligence.

Look at previous projects, delays, litigation, possession history and customer complaints.

Could Developers Be Affected?

The proposed rule could also change developers’ cash-flow planning.

Under the traditional construction model, customer collections are an important source of project funding.

If a portion of the consideration remains outstanding until final registration, developers may need stronger project-level financial planning.

This could potentially favour financially stronger developers who have access to institutional finance and other sources of capital.

Smaller developers may need to adapt their funding models.

Is the 80% Rule Already Law?

This distinction is extremely important.

No homebuyers should not treat the proposal as an already applicable rule.

The current reports describe a proposed change being considered by the Maharashtra government. The final percentage, conditions, applicability and effective date will depend on the government’s formal legal process.

Therefore, buyers should check the latest government notification before assuming that they can legally withhold a particular amount.

What Should Existing Buyers Do?

Existing buyers should not independently stop making scheduled payments simply because the proposed rule has been reported.

The payment obligations under their existing Agreement for Sale remain important.

If there is a dispute regarding payment, possession or construction, buyers should obtain professional legal advice and examine the applicable RERA provisions and contractual terms.

Bottom Line

Maharashtra’s proposed payment restriction could become an important development for homebuyer protection.

If implemented, retaining around 20% of the property consideration until final registration could give buyers greater financial leverage and reduce the amount of money paid before a project reaches its final stage.

But the proposal should not be viewed as a replacement for due diligence.

For Mumbai homebuyers, the safest approach remains the same: verify MahaRERA, check approvals, study the Agreement for Sale, investigate the developer’s track record and understand the payment schedule before committing large amounts of money.