The RERA 70% escrow rule and what it actually protects you from

The problem the rule was written to solve

Before RERA, a developer could collect from buyers of Project A and deploy that money into land for Project B. While the market rose, this worked: Project B's sales funded Project A's construction, and the cycle continued. When the market stalled, the chain broke, and buyers in Project A found their money gone into land they had no interest in and a building that had stopped.

The escrow provision breaks that chain by ring-fencing the majority of collections to the project they came from.

How the mechanism works

The developer must maintain a separate account for each registered project. Seventy per cent of the amounts realised from allottees for that project goes into it, and money can come out only to cover the land and construction cost of that same project.

Withdrawals are not at the developer's discretion. They must be in proportion to the percentage of completion, and that proportion has to be certified — by an engineer, by an architect, and by a chartered accountant, each in their own domain. The three-way certification is what makes the proportionality enforceable rather than self-declared.

• A separate account per registered project, not one account per developer.
• 70% of collections from that project's allottees goes in.
• Withdrawals only for that project's land and construction cost.
• Withdrawals proportionate to certified construction progress.
• The remaining 30% is available to the developer for other costs, including its margin.

What the rule does not protect you from

This is the part worth reading twice, because the escrow provision is frequently described as though it guaranteed delivery. It does not.

It constrains where money goes. It does not guarantee that the project is viable, that the costing was realistic, that approvals will come through, that the developer can execute, or that the timeline in the registration is achievable. A project can comply perfectly with the escrow requirement and still be delayed for years.

• It does not guarantee the project completes.
• It does not guarantee the declared possession date.
• It does not validate the developer's costing or its ability to build.
• It does not protect against approval or litigation risk on the land.
• It does not apply to the 30% the developer is entitled to withdraw.

What you can actually check

The registration itself is public, and reading it is the highest-value hour of due diligence available to a buyer. The MahaRERA portal carries the registration for every project that has one, along with the declared timeline and the periodic progress updates the developer is required to file.

The gap between the declared timeline and the filed progress is the most informative thing on the page. A project whose quarterly updates have stopped, or whose declared completion has been extended repeatedly, is telling you something the brochure will not.

• Confirm the project is registered and the registration is current.
• Check that the registration covers the specific phase and tower you are buying in.
• Read the declared completion date, and compare it to what you have been told verbally.
• Read the filed quarterly progress updates, and note whether they are being filed at all.
• Check whether the registration has been extended, and how many times.

One registration, one project — and the phase trap

Large developments are frequently registered in phases, each with its own registration number and its own timeline. A marketing name can span several registrations.

This matters because the protections attach to the registration, not to the marketing name. Confirm which registration covers the tower and the unit you are buying, and read that one. Every project we list publishes its registration number for exactly this reason — so you can check it yourself rather than take our word for it.