RERA 70% designated account

Section 4(2)(l)(D) of the RERA Act requires the promoter to deposit 70% of the amounts realised from allottees in a separate account with a scheduled bank. The money can be used only for the land and construction cost of that project. Withdrawals must be in proportion to the percentage of completion and certified by an engineer, an architect and a chartered accountant in practice.

Collections and sales teams need to know which account a payment should go to. Demand letters should carry the correct designated account details for the project. A buyer who pays into the wrong account creates reconciliation work and a compliance question.

Example: in a month you collect ₹2,00,00,000 from buyers in one project. At least ₹1,40,00,000 goes to the designated account. The remaining ₹60,00,000 can go to the promoter's other accounts.

Some states describe the arrangement with three accounts: a collection account, the 70% separate account and a free account. Check your state rules and your bank's setup.