A demand letter states the milestone reached, the amount due with taxes, the due date and payment details.
Example
A slab demand in Pune
A buyer of a ₹90 lakh flat in Hadapsar, Pune, on a construction-linked plan receives a demand letter: “7th slab completed, 5% due — ₹4,50,000 plus GST — payable within 15 days”, with the project’s account details and the architect’s certificate attached. The buyer forwards it to the bank, which disburses its share of the instalment.
Figures are illustrative, not market rates.
Questions about Demand letter
What should I check in a demand letter?
That the milestone matches the payment plan, the stage is visible on site or in RERA quarterly updates, the amount and GST are correct, and the bank account is the project’s RERA-designated account. Payment to any other account is a warning sign.
What if I pay a demand late?
The agreement usually charges interest on late payments. For registered projects, section 19(7) of the RERA Act says the allottee pays interest at the prescribed rate for delay. Repeated defaults can also lead to cancellation under the agreement’s terms.
Can a builder demand payment ahead of construction?
Not under a construction-linked plan; demands should follow certified milestones. If a demand arrives before the stage is complete, ask for the certificate and photos, and check the latest progress report on the state RERA portal before paying.
Sources
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