[{"data":1,"prerenderedAt":305},["ShallowReactive",2],{"navigation":3,"\u002Fblog\u002Frera-70-percent-account-is-not-escrow":40},[4,8,12,16,20,24,28,32,36],{"title":5,"path":6,"stem":7},"Getting started","\u002Fdocs\u002Fgetting-started","1.docs\u002F1.getting-started",{"title":9,"path":10,"stem":11},"Core concepts","\u002Fdocs\u002Fcore-concepts","1.docs\u002F2.core-concepts",{"title":13,"path":14,"stem":15},"Sales & CRM guide","\u002Fdocs\u002Fsales-crm-guide","1.docs\u002F3.sales-crm-guide",{"title":17,"path":18,"stem":19},"Construction progress guide","\u002Fdocs\u002Fconstruction-progress-guide","1.docs\u002F4.construction-progress-guide",{"title":21,"path":22,"stem":23},"Payments & collections guide","\u002Fdocs\u002Fpayments-guide","1.docs\u002F5.payments-guide",{"title":25,"path":26,"stem":27},"RERA compliance guide","\u002Fdocs\u002Frera-compliance-guide","1.docs\u002F6.rera-compliance-guide",{"title":29,"path":30,"stem":31},"Exports & audit trail","\u002Fdocs\u002Freports-and-exports","1.docs\u002F7.reports-and-exports",{"title":33,"path":34,"stem":35},"Roles & permissions","\u002Fdocs\u002Froles-permissions","1.docs\u002F8.roles-permissions",{"title":37,"path":38,"stem":39},"Frequently asked questions","\u002Fdocs\u002Ffaq","1.docs\u002F9.faq",{"id":41,"title":42,"body":43,"date":296,"description":297,"extension":298,"meta":299,"navigation":300,"path":301,"seo":302,"stem":303,"__hash__":304},"blog\u002F2.blog\u002F2.rera-70-percent-account-is-not-escrow.md","The RERA 70% account is not an escrow account",{"type":44,"value":45,"toc":286},"minimark",[46,50,63,74,79,82,88,95,98,102,105,108,113,116,120,123,138,145,148,152,155,159,162,165,185,193,197,204,207,211,214,221,224,227,232,281],[47,48,49],"p",{},"Most people in Indian real estate call it the escrow account. Bankers, brokers, a good share of the\nexplainer articles.",[47,51,52,53,57,58,62],{},"Section 4(2)(l)(D) of the Real Estate (Regulation and Development) Act, 2016 calls it a ",[54,55,56],"strong",{},"separate\naccount",". The word escrow isn't in the clause. MahaRERA's own forms call it the ",[59,60,61],"em",{},"designated bank\naccount",", which is closer still.",[47,64,65,66,69,70,73],{},"Compliance professionals have been making this correction for years, so I'm not going to pretend\nit's news. It's the setup, not the point. The point is what follows from it: once you accept that\nno third party is holding your money, the question stops being ",[59,67,68],{},"who do I ask"," and becomes ",[59,71,72],{},"what do\nI have to prove"," — and the second one is a site-records problem, not a banking one. That part I\ndon't see written down much, and it's the part that costs developers weeks.",[75,76,78],"h2",{"id":77},"what-the-section-actually-says","What the section actually says",[47,80,81],{},"The operative words are worth reading once, slowly:",[83,84,85],"blockquote",{},[47,86,87],{},"seventy per cent of the amounts realised for the real estate project from the allottees, from\ntime to time, shall be deposited in a separate account to be maintained in a scheduled bank to\ncover the cost of construction and the land cost and shall be used only for that purpose.",[47,89,90,91,94],{},"Then the condition that everything else in this post hangs on: the promoter may withdraw ",[54,92,93],{},"in\nproportion to the percentage of completion of the project",", and only after an engineer, an\narchitect and a chartered accountant in practice have certified that the withdrawal is in that\nproportion.",[47,96,97],{},"Read those two parts together. The first is about where the money sits. The second is about what\nreleases it. Almost everybody argues about the first and then gets blocked by the second.",[75,99,101],{"id":100},"why-escrow-is-the-wrong-picture","Why \"escrow\" is the wrong picture",[47,103,104],{},"An escrow account is a third party holding money in the middle of a transaction and releasing it\nwhen a condition is met. The whole point is that neither side can touch it.",[47,106,107],{},"That is not this. The separate account is opened and maintained by the promoter, in a scheduled\nbank, and it is the promoter who withdraws from it. No neutral custodian is sitting on your money.\nThere is no third party to call.",[109,110],"illustration",{"alt":111,"src":112},"Two side-by-side flows. On the left, what people picture: a buyer pays, a third party holds the money, and it is released to the developer. On the right, what the Act says: a buyer pays into the developer's own separate account, and three professional certificates are what release it.","\u002Fillustrations\u002Fblog-rera-account-mental-model.svg",[47,114,115],{},"So if nobody is holding your money, why does it feel locked?",[75,117,119],{"id":118},"because-the-gate-is-evidence-not-permission","Because the gate is evidence, not permission",[47,121,122],{},"The constraint isn't custody. It's proof.",[47,124,125,126,129,130,133,134,137],{},"You cannot draw more than the project's percentage of completion, and you cannot establish that\npercentage by asserting it. Three professionals have to put their names to it, and in Maharashtra\neach has their own published form: ",[54,127,128],{},"Form 1"," is the architect's certificate for withdrawal,\n",[54,131,132],{},"Form 2"," the structural engineer's, and ",[54,135,136],{},"Form 3"," the chartered accountant's. Worth getting the\norder right — plenty of write-ups have Forms 1 and 2 the wrong way round. That numbering is\nMaharashtra's and nobody else's, so check your own authority's current circulars before you act on\nany of it.",[47,139,140,141,144],{},"Form 3 certifies the cost incurred on construction and land against the total estimated project\ncost, and it carries a detail worth knowing: it has to be signed by a practising CA ",[54,142,143],{},"other than\nyour statutory auditor",", so the person who audits you annually is not the person clearing your\nwithdrawals.",[47,146,147],{},"Which means your rate of cash release is set by something unglamorous — how quickly and how\ncredibly you can evidence physical progress and the cost booked against it.",[109,149],{"alt":150,"src":151},"A rising staircase where each step is a higher certified percentage of completion — 25, 50, 75 and 100 percent — and the height of each step is the amount that may be withdrawn. Each rise is marked in gold to show it requires a fresh engineer, architect and chartered accountant sign-off.","\u002Fillustrations\u002Fblog-rera-withdrawal-ratchet.svg",[47,153,154],{},"Notice what a chartered accountant is actually certifying there. Not that the slab is cast. They\nare certifying cost — cost incurred as a proportion of cost estimated — and cost is standing in as\na proxy for progress. That proxy is only as good as the measurement underneath it. If your site\nrecords are a WhatsApp group and a spreadsheet somebody updates on Fridays, the certificate isn't\nslow because the CA is difficult. It's slow because you are asking three professionals to sign\ntheir names to a number nobody can reconstruct.",[75,156,158],{"id":157},"the-30-is-not-your-profit","The 30% is not your profit",[47,160,161],{},"Thirty per cent of collections staying outside the separate account does not make it free money.\nIt is the working float — approvals, marketing, brokerage, interest, overheads, everything the\n70% is fenced off from. Treat it as margin and you will be short of cash for exactly the expenses\nthat the 70% is not allowed to cover.",[47,163,164],{},"States have also layered real mechanics on top of the bare section, and they vary:",[166,167,168,175],"ul",{},[169,170,171,174],"li",{},[54,172,173],{},"Rajasthan"," has directed a two-account structure — everything lands in a collection account,\nand the 70% is swept into a retention account, ideally automatically and in any case within T+2.",[169,176,177,180,181,184],{},[54,178,179],{},"Karnataka",", in a notification dated 19 July 2023, went further in a direction that catches\npeople out: money the promoter ",[59,182,183],{},"borrows"," for the project also has to go into the designated\naccount, banks must disburse construction finance directly into it, and phase-wise projects have\nto apportion amounts across phases and report that in the quarterly updates.",[47,186,187,188,192],{},"If you register phase-wise — and ",[189,190,191],"a",{"href":10},"each phase is its own registration",", with its\nown filings — that last point is not administrative trivia. It means the split of money between\nphases becomes something you have to be able to show, quarter after quarter.",[75,194,196],{"id":195},"and-then-it-gets-checked-backwards","And then it gets checked backwards",[47,198,199,200,203],{},"The withdrawals are certified as you go. Separately, your accounts get audited within six months of\nthe end of each financial year, and the statutory auditor certifies that the amounts collected for\nthe project were used for that project and that withdrawals actually matched the percentage of\ncompletion. In Maharashtra that one is Form 5 — published, plainly enough, as the ",[59,201,202],{},"annual report of\nwithdrawal from designated bank account",".",[47,205,206],{},"So there are two passes over the same facts: a forward-looking certificate each time you draw, and\na backward-looking audit once a year that has to agree with all of them. Anything you couldn't\nevidence at the time is still sitting there, waiting, twelve months later.",[75,208,210],{"id":209},"what-actually-helps","What actually helps",[47,212,213],{},"The boring answer is the true one: the constraint on releasing your own money is the quality of\nyour progress and cost records, and that is a thing you control.",[47,215,216,217,220],{},"Measure completion the way the certificate will be written — per registered phase, per building,\nagainst the ",[189,218,219],{"href":26},"same progress categories your quarterly filing uses",",\nwith dates and a trail of who recorded what. If the architect, the structural engineer and the CA\nare all reading from the same underlying record, the certificate is a formality. If each of them\nhas to go and reconstruct the position independently, you have built yourself a three-week delay\nevery single time, and you will blame RERA for it.",[222,223],"post-cta",{},[225,226],"hr",{},[47,228,229],{},[54,230,231],{},"Sources",[166,233,234,243,251,259,273],{},[169,235,236,237],{},"Form names and numbering — MahaRERA's own ",[189,238,242],{"href":239,"rel":240},"https:\u002F\u002Fmaharera.maharashtra.gov.in\u002Fnew-forms",[241],"nofollow","published list of forms",[169,244,245,246],{},"Section 4(2)(l)(D) text, and Rajasthan's collection\u002Fretention split and T+2 sweep —\n",[189,247,250],{"href":248,"rel":249},"https:\u002F\u002Fibclaw.in\u002Frera-retention-account-rajasthan-rera-order-no-f-1231rj-rera-ea-2021-1914-dated-15-12-2021\u002F",[241],"IBC Laws",[169,252,253,254],{},"Karnataka notification of 19 July 2023, on borrowed funds and phase-wise apportionment —\n",[189,255,258],{"href":256,"rel":257},"https:\u002F\u002Fwww.khaitanco.com\u002Fthought-leaderships\u002FKarnataka-real-estate-regulatory-authority-notification",[241],"Khaitan & Co",[169,260,261,262,267,268],{},"Separate account is not an escrow account —\n",[189,263,266],{"href":264,"rel":265},"https:\u002F\u002Frerafiling.com\u002Frera-article-detail.php\u002F633\u002Fseparate-account-ldquo-not-escrow-account-rdquo",[241],"rerafiling.com","\nand ",[189,269,272],{"href":270,"rel":271},"https:\u002F\u002Ftaxguru.in\u002Fcorporate-law\u002Fyell-dee-70-rera-a-c.html",[241],"TaxGuru",[169,274,275,276,280],{},"Six-month Form 5 deadline, and Form 3 signed by a CA other than the statutory auditor —\n",[189,277,266],{"href":278,"rel":279},"https:\u002F\u002Frerafiling.com\u002Frera-article-detail.php\u002F521\u002Fform-3-v-s-form-5-in-rera",[241],".\nPractitioner sources, not the regulator — well-attested rather than official.",[47,282,283],{},[59,284,285],{},"This is commentary, not legal, tax or accounting advice. State rules differ and change — verify\nagainst your own authority's current circulars.",{"title":287,"searchDepth":288,"depth":288,"links":289},"",2,[290,291,292,293,294,295],{"id":77,"depth":288,"text":78},{"id":100,"depth":288,"text":101},{"id":118,"depth":288,"text":119},{"id":157,"depth":288,"text":158},{"id":195,"depth":288,"text":196},{"id":209,"depth":288,"text":210},"2026-07-22","Section 4(2)(l)(D) says 'separate account', never 'escrow'. That word decides who has to be convinced before your own money moves — and it isn't the bank.","md",{},true,"\u002Fblog\u002Frera-70-percent-account-is-not-escrow",{"title":42,"description":297},"2.blog\u002F2.rera-70-percent-account-is-not-escrow","ARyKZF28EFWGjCa5JnN2VbOY70v0UCgmhsB30c_-h4I",1784704516001]