What a genuine payment plan looks like

And what the structure of a plan tells you about the developer

A payment plan is not only a schedule. It is evidence about how confident the developer is, and how much risk he is transferring to you.

What a sound plan contains

• The total price stated once, in full, with nothing described as "approximate"

• Every charge itemised — development charges, possession charges, corner or facing premium, utility connection, membership

• A clear statement of what is not included and will be billed later

• Instalment amounts and exact due dates, not "quarterly from launch"

• Which taxes are payable by the buyer and which by the seller

• The consequence of a late instalment, stated as a specific amount or percentage

• The number of missed instalments before cancellation, and the deduction on cancellation

• The refund procedure, the deduction and the time to refund, in writing

• What happens if possession is delayed — compensation, or nothing

• Whether the plan is transferable, and the transfer fee

• Whether the developer may change plot size or location at balloting

• Bank account details in the name of the company or the recorded owner, not an individual

Milestone-linked instalments are the strongest signal

A plan tied to development stages — payment on completion of roads, on utility installation, on possession — transfers risk to the developer and demonstrates confidence. A plan tied only to the calendar transfers all risk to you and demonstrates nothing.

A meaningful final instalment held until possession is the single best protection a buyer has.

Warning signs in the structure

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Signal What it usually indicates

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A very large discount for full advance payment The developer needs cash now, not later

No possession-linked instalment at all No commitment to a delivery date

Punitive cancellation deductions The plan is designed to retain your money, not deliver a plot

No written refund policy There is no intention to refund

Payment requested to an individual's account Money is not entering the project

Charges described as payable "as applicable" An open-ended claim on you later

Plan changes between the brochure and the agreement Nothing in the brochure is binding

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ASK ONE QUESTION ABOUT THE MONEY

Where are instalments held, and is there an escrow arrangement? Regulated schemes increasingly separate buyer money from developer working capital. An answer that avoids the question is itself an answer.

Before you sign

• Read the actual agreement, not the brochure. Only the agreement binds anyone.

• Check that every figure in the brochure appears in the agreement

• Have the agreement reviewed by a lawyer you chose, not one the dealer recommended

• Keep a signed copy with the developer's stamp, and a receipt for every payment