Guide
Token Money (Bayana) in Pakistan: Rules, Receipts and Refunds
Guide
By Mariam Khan
Real Estate Analyst
14 min read
Token money is the moment a property deal becomes real in Pakistan, and the moment most disputes begin. A buyer hands over a token to "lock" a house or plot, the seller promises not to sell to anyone else, and both sides agree a date for the rest of the payment. When it goes well, token money property deals close smoothly. When it doesn't, buyers lose lakhs to sellers who back out, dealers who vanish, or files that turn out to be fake.
This guide explains what token money and bayana mean, what the law says about them, how to pay safely, what your receipt must include, and when you're entitled to a refund. For the wider picture of how deals and dealers work, see our guide to real estate agents in Pakistan.
| Question | Short answer |
|---|---|
| Is there a legal token amount? | No. The amount is agreed between buyer and seller |
| Does paying token make you the owner? | No. An agreement to sell doesn't transfer ownership |
| Who should receive the token? | The registered owner, by pay order or bank transfer, never the dealer |
| What must the receipt include? | Parties, CNICs, property details, amount, payment method, price, deadlines and refund terms |
| Seller backs out |
| The buyer can usually claim a refund, compensation under the agreement, or specific performance |
| Buyer backs out | The seller may keep the token if the agreement says so, subject to the law on reasonable compensation |
| Property turns out fake or seller has no title | The money should be returned |
In Pakistani property deals, the words are often used loosely, but there are usually three stages of payment:
| Stage | Common name | Typical purpose |
|---|---|---|
| 1 | Token | A small first payment to show serious intent and hold the property for a few days while documents are checked |
| 2 | Bayana (earnest money or advance) | A larger payment made with a written sale agreement (iqrarnama), fixing the price and the date for completion |
| 3 | Balance | The rest of the price, paid at transfer or registration |
Some deals combine the token and bayana into one payment. The amounts, often a small sum at first and around 10% or more with the agreement, are market customs, not legal rules. What matters legally is what you and the seller agree in writing.
Pakistan has no law dedicated to token money. Instead, the rules come from general contract and property laws.
Under the Transfer of Property Act, 1882, a sale is the transfer of ownership for a price (Section 54). A contract for sale, which is what a token or bayana agreement is, does not by itself create any interest in or charge on the property. Until transfer or registration, the seller is still the legal owner.
Section 55(6)(b) of the same Act gives the buyer a charge on the property for purchase money properly paid in advance, with interest, against the seller and anyone claiming under them. This applies unless the buyer improperly refused to take delivery. If the buyer properly refuses delivery, the charge also covers earnest money. In practice, this gives a buyer who paid in advance a legal claim tied to the property itself, not only against the seller personally.
Many sale agreements say that if the buyer backs out, the token is forfeited, and if the seller backs out, they return double. Under Section 74 of the Contract Act, 1872, where a contract names a sum to be paid on breach, the injured party is entitled to reasonable compensation not exceeding the amount named. A forfeiture or double-payment clause is therefore an upper limit, not an automatic entitlement, and courts can look at what's reasonable.
Under Section 65 of the Contract Act, when an agreement is discovered to be void, or a contract becomes void, anyone who received an advantage under it must restore it. If the seller had no right to sell, or the file never existed, the token should be returned.
The Specific Relief Act, 1877 lets courts order specific performance, meaning the seller is made to complete the sale. Section 12 presumes that a breach of a contract to transfer immovable property can't be adequately compensated with money, which is why buyers often sue for performance rather than just a refund. Section 19 allows compensation instead of, or as well as, performance. Under Section 18(d), where a seller with an imperfect title sues and fails on that ground, the buyer is entitled to the return of their deposit with interest and costs.
There's no correct amount, but there is a safe order of steps.
The larger the payment before verification, the more you stand to lose if something is wrong.
| Do | Don't |
|---|---|
| Pay by pay order or bank transfer in the registered owner's name | Pay cash, or into the dealer's personal account |
| Meet the owner, or verify the power of attorney if someone is acting for them | Pay someone who says the owner is "abroad" without a verified POA |
| Get a numbered, signed receipt the same day | Accept a WhatsApp message as a receipt |
| Keep copies of the pay order and bank record | Hand over originals of your own documents |
Cash and the law: registered property dealers must report cash transactions of Rs 2 million or more to the Financial Monitoring Unit, and must check client identity before the deal. A genuine dealer will ask for your CNIC and steer you away from large cash payments.
Our buyer's checklist for property dealers covers how to check the dealer before any money moves.
A token receipt is your main evidence if anything goes wrong. It should be on paper (stamp paper is commonly used for the sale agreement), signed by the seller and witnessed.
| Section | What to write |
|---|---|
| Parties | Full names, father's or husband's names, CNIC numbers and addresses of buyer and seller |
| Property | Plot or house number, block, sector or society, size, and file or registration number |
| Price | Total agreed price |
| Payment | Token amount in figures and words, date, pay order or transfer number, bank |
| Balance | Remaining amount and the date it's due |
| Completion | Date for transfer or registration, and who pays transfer fees, taxes and dues |
| Refund terms | What happens if the buyer defaults, if the seller defaults, or if title or documents are defective |
| Documents | List of documents the seller will hand over |
| Dealer | Name, agency and commission terms, if a dealer is involved |
| Signatures | Seller, buyer and two witnesses, with CNIC numbers |
I, [seller's name, CNIC], owner of [property details], acknowledge receipt of Rs [amount in figures] ([amount in words]) from [buyer's name, CNIC] by [pay order / bank transfer no.] dated [date] as token money against the total agreed price of Rs [price].
The balance of Rs [amount] will be paid on or before [date], when I will complete the transfer.
If I fail to complete the sale, I will refund the token [and pay Rs (amount) as compensation]. If the buyer fails to pay the balance by the agreed date, [state the agreed consequence]. If my title or documents are found defective, the full token will be refunded within [number] days.
Seller's signature, buyer's signature, two witnesses with CNIC numbers, date.
Have a lawyer review the full sale agreement before you sign, especially the refund and default terms.
| Situation | Usual position |
|---|---|
| Seller backs out | The buyer can claim a refund plus any compensation the agreement provides (limited to reasonable compensation), or ask a court to order the sale |
| Buyer backs out | The seller may keep the token if the agreement says so, subject to Section 74's reasonable compensation rule |
| Seller had no title, or the file is fake | The agreement is void and the money should be returned (Section 65) |
| Society or authority refuses transfer because of the seller's issue (dues, disputes, missing NOC) | Usually treated as the seller's default; the buyer can claim a refund |
| Delay caused by the buyer's documents or funds | Depends on the agreement; may be treated as the buyer's default |
| Both sides agree to cancel | Settle the refund in a signed cancellation agreement |
The written agreement decides most disputes. Vague or missing refund terms are the most common reason buyers can't recover their money.
Here's an illustrative example of how splitting payments reduces risk. It's a worked example, not legal advice.
The deal: a house priced at Rs 1 crore.
Option A: pay 10% as token on day one, before checking documents
Option B: pay 1% to hold, then 9% after verification
Risk reduction before verification
And the "double" clause If the agreement says the seller returns double on default, and the seller backs out after the full Rs 10,00,000 bayana:
Same total payment, same deal, but 90% less exposure during the riskiest days.
If you're choosing a dealer for a purchase, compare agents in your area through Milkiyat's agent directory or start with agents in Islamabad. Our guide to property dealer commission explains customary rates and when commission is paid.
| Mistake | Better approach |
|---|---|
| Paying a large token before checking documents | Keep the first token small; verify, then pay bayana |
| Paying the dealer instead of the owner | Pay the owner by pay order |
| No refund terms in writing | Write default and refund terms into the receipt and agreement |
| Accepting "owner is abroad" | Meet the owner or verify the POA with the society |
| Cash payments | Use bank instruments; large cash triggers reporting |
| Missing the balance deadline | Track dates; ask in writing for any extension |
Before paying any token, verify the property using our guide on checking property ownership.
Our guide on how to complain against a property dealer explains each route, from police to consumer and civil courts.
1. What is token money in property deals in Pakistan?
Token money is an advance payment a buyer makes to the seller to hold a property and show serious intent, usually followed by a larger bayana with a written sale agreement and the balance at transfer.
2. Is token money refundable in Pakistan?
It depends on the agreement and on who defaulted. If the seller backs out, or the seller's title is defective, the buyer can usually claim a refund. If the buyer backs out, the seller may keep the token where the agreement provides for it, subject to the law on reasonable compensation.
3. Is the "double token" rule legally enforceable?
A clause requiring the seller to return double the token is treated as a sum named for breach. Under Section 74 of the Contract Act, the buyer is entitled to reasonable compensation not exceeding that amount, so the full double isn't automatic.
4. Does paying bayana make me the owner?
No. Under the Transfer of Property Act, a contract for sale doesn't create an interest in the property. Ownership passes at transfer or registration. You do get a charge on the property for money properly paid in advance.
5. Should I pay token money to the property dealer?
No. Pay the registered owner directly by pay order or bank transfer, and get a signed receipt.
6. How much token money should I pay?
There's no legal amount. Keep the first token small until you've verified the property, then pay the larger bayana with a written agreement.
Token money is a promise backed by paper, and the paper is what protects you. Keep the first payment small, pay the owner by bank instrument, get a detailed receipt with clear refund terms, verify before paying the bayana, and remember that a token makes you a buyer with rights, not an owner. Do that, and most token money disputes never start.
When you're ready to buy, find agents who work in your target area on Milkiyat.com and compare their listings and reviews before you commit.
This guide is for general information only and isn't legal advice. Whether token money is refundable, forfeited or doubled depends on the exact terms of your agreement, the facts and the court's view. Stamp duty, registration and society rules also differ by province and authority. Consult a qualified lawyer before signing a sale agreement or starting any claim. The worked example is illustrative. Milkiyat.com does not provide legal, tax or financial advice.
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