TNRERA Letter on Additional Separate Account Deposits
The Tamil Nadu Real Estate Regulatory Authority issued the undated Letter No. TNRERA/A2/ /2025 to direct a project promoter's bank on account controls when the Authority extends an unfinished real estate project's validity. It requires an additional 20% of amounts received from allottees to be deposited in the project's separate account, over and above the 70% stated in the letter, and restricts withdrawals, transfer and closure of that account.
The Tamil Nadu Real Estate Regulatory Authority issued the undated Letter No. TNRERA/A2/ /2025 as a direction to the branch manager holding a real estate project's separate bank account. It sets additional deposit and account control conditions when the Authority allows an unfinished registered project to continue through an extension of its validity. The date, project name, registration details, survey numbers, account number and extended validity date are blank in the supplied text.
What the letter governs
The Tamil Nadu Real Estate Regulatory Authority letter applies where:
- A project was registered through Form C.
- The promoter opened a separate bank account for the project.
- The completion date declared in Form C has passed or is approaching, but the project remains incomplete.
- The promoter has applied for an extension of the project's validity.
The letter states that Section 7(3) of the Real Estate (Regulation & Development) Act, 2016 allows the Authority to keep a registration in force, instead of revoking it, subject to further terms and conditions imposed in the interests of allottees. Those conditions are binding on the promoter.
Additional deposit requirement
When granting the extension, the Tamil Nadu Real Estate Regulatory Authority may require the promoter to deposit an additional 20% of every amount received from allottees into the separate account maintained under Section 4(2)(2)(D) of the Act.
Key points are:
- The additional 20% is over and above the 70% amount stated in the letter.
- The deposited money must be used to cover construction costs as stipulated in the Act.
- The requirement applies to amounts received from allottees from time to time.
Withdrawals and bank controls
The Tamil Nadu Real Estate Regulatory Authority letter limits how the promoter and bank may operate the separate account:
- The promoter may withdraw money only in proportion to the percentage of project completion.
- An engineer, architect or chartered accountant in practice must certify that the withdrawal matches the percentage completed.
- The bank must not close or transfer the account without the Authority's consent.
- The account may be closed only after production of a completion report issued by the Tamil Nadu Real Estate Regulatory Authority.
These controls matter to allottees because they regulate how collections are retained and used while an incomplete project's registration continues.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Does every TNRERA registered project have to deposit the additional 20%?
The letter applies to an unfinished project whose promoter has sought an extension of project validity and where the Tamil Nadu Real Estate Regulatory Authority imposes this condition. The supplied text does not state that the additional requirement applies to every registered project.
Can the promoter withdraw the additional money immediately?
No. Withdrawals from the separate account must be proportionate to the project's percentage of completion and certified by an engineer, architect or chartered accountant in practice.
Can the bank close or transfer the project's separate account?
The bank must not close or transfer the account without the consent of the Tamil Nadu Real Estate Regulatory Authority. Closure is permitted only on production of a completion report issued by the Authority.
Which specific project and extension period does this letter cover?
The supplied letter does not identify them. Its project name, registration number, survey numbers, bank account number, date and extended validity date are blank.
