A token is paid to block a property while documents are prepared. Agree in writing whether and when it is refundable.
Example
Holding a resale flat in Chennai
A buyer likes a ₹92 lakh 3 BHK in Anna Nagar, Chennai, and pays a ₹1,00,000 token by bank transfer. The receipt states the flat, the agreed price, that the token adjusts against the price, a 15-day window to sign the agreement and that it is refundable if the title check fails. Without that last line, a dispute over refunds is likely.
Figures are illustrative, not market rates.
Questions about Token amount
Is a token amount refundable?
Only if the parties agree it is. Write down when it is refundable (for example, if the title search or loan fails) and when it is forfeited (if the buyer backs out without reason). A token paid with no written terms is a common source of disputes.
How much token amount is normal?
There is no legal figure; it is a negotiated amount that is small compared with the price. For new projects, the RERA Act caps what a builder can take before a registered agreement at 10% of the cost, which limits how large a booking advance can grow.
Should a token be paid in cash?
Pay by bank transfer or cheque and get a signed receipt naming the property, price and terms. Cash leaves no trail, and the Income-tax law restricts large cash receipts for property transactions. A traceable payment protects both buyer and seller.
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