Land Cost cannot be withdrawn from Escrow in RERA Registered Projects upfront

rerabookBy Dr Sanjay Chaturvedi, LLB, PhD

The land cost is one of the major component in any real estate project. This needs to be invested first along with all permissible permissions which includes sanction plans, Environmental permissions, Commencement Certificates, Fire and Traffic NOC, Civil aviation NOC and TDR. It is common connotation that whatever invested or spent on the project, if greater than receivable, then it can be withdrawn 100%. But the RERA Act is absolutely clear on this.

RERA Relevant Section 4 2. (D) that seventy per cent. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose:

Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project:

 





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