RERA requires a builder to keep 70% of buyers' money in a separate account, used only for that project. When a builder diverts your money to buy land or fund other projects, that's usually why your project stalls — and it's a RERA violation.
In plain words: RERA requires a builder to keep 70% of what buyers pay in a separate bank account, to be used only for that project. When a builder quietly diverts your money to buy more land or prop up other projects, that is usually the real reason your project has stalled — and it is a clear RERA violation.
The problem
Your project is 'stuck for want of funds', yet the same builder is busy launching new projects and buying land. Your money, it turns out, did not stay with your project.
What RERA says
- The 70% rule. Section 4(2)(l)(D): 70% of the amounts realised from the allottees for a project must be deposited in a separate bank account, to cover the land and construction cost of that project.
- Controlled withdrawals. The builder can withdraw from this account only in proportion to the stage of completion, certified together by an engineer, an architect and a chartered accountant.
- Diversion is prohibited. Using one project's money for another, or for land banking, breaches this rule and is a contravention that can attract penalty (Section 61) — and it is often the root cause of delays.
What you can do, step by step
- In a delay complaint, point to likely fund diversion and the 70% rule.
- Ask HRERA to examine the project account and direct corrective action.
- Use this to strengthen your refund or interest claim.
How Vakil Help Desk helps
We raise fund-diversion and the 70% rule in HRERA proceedings to push stalled projects and strengthen your claim. If your project has stalled 'for want of funds', contact Vakil Help Desk.
General information on RERA, not legal advice.