Is It Legal for a Builder to Take an EOI (Cheque) Before RERA Registration?

Is It Legal for a Builder to Take an EOI (Cheque) Before RERA Registration? The Definitive Guide for Homebuyers

The short answer is it is illegal for a developer to collect any form of payment, including a cheque for an EOI, for a project that has not yet obtained RERA registration.

RERA Act: The Legal Framework

Section 3 of the RERA Act is clear: no promoter shall advertise, market, book, sell, or offer for sale any plot, apartment, or building in any real estate project without prior registration with the respective state’s RERA authority.

This means all pre-launch offers, soft launches, or EOI schemes that involve collecting any monetary consideration from a buyer before registration are a direct violation of the law. Developers engaging in this practice are essentially operating in a legal “grey area” at best, or committing a punishable offense at worst.

What Is an EOI (Expression of Interest)?

An Expression of Interest (EOI) is a token amount—often collected as a cheque—taken by builders to “block” or “reserve” a unit for a buyer before the official launch of a project.

Builders often claim:

• It is refundable,
• It is not a booking,
• It merely shows buyer interest.

But in many cases, EOIs end up creating pressure on buyers or being misrepresented as a legal commitment.

What RERA Law Says About Collecting Money Before Registration

Under Section 3 of the RERA Act, a promoter cannot advertise, market, sell, offer for sale, or invite persons to purchase any unit without first registering the project with RERA.

This means:

• No pre-launch sales
• No advance payments
• No booking amounts
• No EOIs involving money

Any collection of funds—even a “fully refundable EOI”—is considered a violation of RERA.

Why Do Builders Still Collect EOIs?

Some common reasons:

• To test market demand before launch
• To show higher demand to investors & buyers
• To secure early funds informally

This practice benefits builders and even Investor who knows the risk.|
—but increases risk for buyers.

What is Legal for Builders Before RERA?

Builders may:

• Advertise the project conceptually (without pricing or unit details)
• collect non-monetary expressions of interest
• maintain waitlists
• conduct market surveys

They cannot collect any form of money.

Buyer Safeguards and What to Do

Homebuyers lose key RERA protections when investing in an unregistered project. Here are essential safeguards:

• Verify Registration: Always verify the project’s RERA registration status on the official state RERA website before making any payments.
• Avoid Pre-Launch Offers without rera: Be wary of attractive pre-launch offers or discounts that demand immediate cheques or large advance payments.
• Do Not Pay More Than 10% Without an Agreement: According to Section 13 of RERA, a builder cannot accept more than 10% of the property’s cost as an advance payment without first executing and registering a formal agreement for sale.

Final Verdict: Should You Give an EOI Before RERA?

Absolutely not.
RERA exists to protect homebuyers, and the first rule is simple:

Never pay a single rupee before RERA registration.

If a project is genuine and compliant, the builder will not pressure you to pay before formal registration.

Only engage after RERA registration

👉 Contact us with your requirement today. Our MahaRERA-certified property consultant will guide you with unbiased advice, compare multiple projects, and help you choose the best property in Mumbai as per your budget and lifestyle.