Proc.No.TNRERA/A2/2761/2025, Extension of Project Validity, Additional Amount in the Separate Account
The Chairperson of the Tamil Nadu Real Estate Regulatory Authority issued Proceedings Number TNRERA/A2/2761/2025, dated 25 July 2025, requiring promoters seeking project validity extensions that total more than one year to deposit an additional 20% of amounts received from allottees from time to time. The designated bank must collect the additional amount and release it only for construction purposes. The proceedings took immediate effect.
What the proceedings do
Proceedings Number TNRERA/A2/2761/2025 were issued by the Chairperson of the Tamil Nadu Real Estate Regulatory Authority on 25 July 2025. They apply when a promoter seeks an extension of a project registration validity period and the total extension exceeds one year.
The Tamil Nadu Real Estate Regulatory Authority states that inadequate funds in project accounts are one of the main reasons for delays in completing projects. The additional deposit requirement is intended to support construction and protect allottees.
Who is affected
The additional deposit requirement directly affects promoters applying for project validity extensions totalling more than one year. It also affects the designated bank holding the project funds.
Allottees are affected because the additional deposit is calculated from amounts received from them from time to time. The proceedings do not direct allottees to make a separate deposit. The responsibility to place the additional amount in the project account rests with the promoter.
Key requirements
The Tamil Nadu Real Estate Regulatory Authority imposed the following conditions:
- A promoter seeking an extension where the total extension exceeds one year must deposit an additional 20% of amounts received from allottees from time to time.
- The additional amount must be deposited in the account already maintained by the promoter under Section 4(2) of the Real Estate (Regulation and Development) Act, 2016.
- The designated bank in which 70% of the amount is deposited must be directed to collect the additional 20%.
- The additional amount may be released only for construction purposes, in accordance with the proviso cited in the proceedings.
- The deposited amount must be used to cover the cost of construction as stipulated in the Act.
Authority and commencement
The Chairperson of the Tamil Nadu Real Estate Regulatory Authority relied on Section 7(3) of the Real Estate (Regulation and Development) Act, 2016. That provision allows project registration to remain in force, instead of being revoked, subject to further terms and conditions imposed in the interest of allottees. Proceedings Number TNRERA/A2/2761/2025 state that the requirements take immediate effect.
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Common questions
When does the additional 20% deposit requirement apply?
It applies when a promoter seeks an extension of the project validity period and the total extension exceeds one year.
Who must deposit the additional amount?
The promoter must deposit an additional 20% of amounts received from allottees from time to time into the existing project account.
Can the additional amount be used for purposes other than construction?
No. The designated bank may release the additional amount only for construction purposes, and it must be used to cover construction costs as stipulated in the Act.
Does an allottee have to make a separate 20% payment?
The proceedings do not require an allottee to make a separate payment. They require the promoter to deposit an additional amount calculated as 20% of amounts received from allottees from time to time.
