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UP & Rajasthan RERA.

The Uttar Pradesh RERA regulations state that funds from a retention/separation account can only be withdrawn in proportion to project completion, prohibiting profit skimming even with partial occupancy certificates. The regulations also allow for separate bank accounts for project phases, provided completion processes are followed. In Rajasthan, similar provisions exist with stricter reporting requirements, ensuring withdrawals align with project completion percentages.

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28 views7 pages

UP & Rajasthan RERA.

The Uttar Pradesh RERA regulations state that funds from a retention/separation account can only be withdrawn in proportion to project completion, prohibiting profit skimming even with partial occupancy certificates. The regulations also allow for separate bank accounts for project phases, provided completion processes are followed. In Rajasthan, similar provisions exist with stricter reporting requirements, ensuring withdrawals align with project completion percentages.

Uploaded by

vaibhav.mishra0414
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We take content rights seriously. If you suspect this is your content, claim it here.
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REGULATIONS IN UTTAR PRADESH RERA

As per Uttar Pradesh Real Estate Project (Maintenance and Operation of Project Bank
Accounts) Directions, 2020 as revised in November, 2023 it has been clearly stated that under
section 4(2)(l)(D) of RERA, 2016 funds from one single retention/separation account can
only be withdrawn in proportion to how much of the project is complete. Even if partial OC
and/or CC is obtained that doesn’t override the rule that limits the withdrawal to what
promoter has actually spent.

Apart from the above screenshots please click on the link and refer to the Directions given
under Direction 3(B), it clearly states that retention/separate account is a “NO LIEN”
account and that “the money shall be utilized only for meeting following expenditures
incurred on the project:
1. Land Cost
2. Project Clearance Fees
3. Cost of Development and Construction
4. Interest
Another pertinent provisions in UP RERA Directions as revised in November, 2023 are
Direction 3(B)(viii) and 3(B)(xiii) [PFA the screenshot of the same]
The Directions above clearly prohibit profit skimming using part OC and/or CC, as
withdrawals from retention/separate account are only allowed to cover cost and only as
certified to be proportionate to actual progress.

However, there’s a catch to this, if the promoter maintains separate bank accounts for specific
phases of a project, then closure of such accounts and withdrawals from them have been
permitted by the authority, the RERA practice appears to allow the same [link], following the
Directions under Direction 9, nonetheless, completion process must still be followed for that
phase. The completion process is:
1. Project or the registered phase is completed
2. CC and/or OC has been uploaded & has been accepted by the concerned authority.
3. The Architect, the Engineer and the CA have issued final certificates, respectively.
4. Audit confirmation under the proviso 3 of the Section 4(2)(l)(D) of RERA, 2016 that
withdrawals match % completion and funds were used for that project.
5. The concerned authority issues a formal permission to close the retention/separation
account and withdraw the remaining balance.

REGULATIONS IN RAJASTHAN RERA


In Rajasthan the provisions given in 2024 in Rajasthan Real Estate Regulatory
Authority NOTIFICATION are a bit stricter due to the presence of Quarterly
Progress Report and Annual Progress Report mandated by the Clauses 5 & 6 of
the said notification, according to Clause 6 promoters have to solemnly affirm
that withdrawal from the retention/separate account has been in accordance with
the proportion to the percentage of completion of project; likewise UP the
retention/separate account is a “NO LIEN” account, but it too has the same
catch, that if the promoter maintains separate bank accounts for specific phases
of a project as permitted under Clause 11(iii), then closure of such accounts and
withdrawals from them have been permitted.
Clause 5:
Clause 6:
Clause 11:

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