Maharashtra mulls 80% cap on upfront payments in property deals

The Maharashtra government is exploring a new law that would cap upfront payments at 80% of the total consideration in agreements to sell. If enacted, this would directly impact how property transactions are structured across Mumbai and the MMR, where high-value deals often involve substantial advances before registration.

For buyers, the move is aimed at reducing the risk of losing large sums if a project stalls or a seller reneges. For developers, it could mean tighter cash flow management, as the remaining 20% would only be due at a later stage, likely at registration or possession. The proposal signals the state's intent to bring more transparency and security to property transactions.

While the details are still being worked out, the cap would apply to agreements to sell, which are common in resale and under-construction properties. This is part of a broader regulatory push to protect homebuyers, following earlier measures like RERA and GST reforms. The real estate industry is watching closely, as any change in payment schedules can affect project funding and pricing strategies.

Sandeep's take: This is a buyer-friendly move that could prevent heartbreak, but it will also force developers to plan their finances better. In a market like Mumbai where cash flow is king, expect some resistance. However, the long-term benefit of increased trust could outweigh the short-term friction.

What to watch next: The fine print of the draft law, especially how it treats under-construction projects and whether it applies retroactively to existing agreements.