In the real estate ecosystem of Uttar Pradesh, transparency and accountability are non-negotiable. One of the most critical tools to ensure this is the RERA-mandated Escrow Account, a legal requirement under the Real Estate (Regulation and Development) Act, 2016.
If you’re a builder or developer in UP, understanding how the 70% Escrow Rule works is not just good practice—it’s a compliance obligation. In this blog, we’ll break it down in simple terms.
What Is a RERA Escrow Account?
Under UPRERA, every registered real estate project must have a dedicated escrow account opened in a scheduled bank. Into this account, the builder must deposit 70% of all amounts collected from allottees (homebuyers).
The 70% Rule – Explained
Here’s how the rule works:
When a buyer books a flat and pays a part of the amount (say booking or slab-wise payment), 70% of this amount must be deposited into the escrow account.
This fund can only be used for:
Construction cost of the project
Land cost related to the project
It cannot be diverted to other projects or used for unrelated business expenses.
This ensures that buyers’ money is only used for the project they’ve invested in, thereby preventing delays and fraud.
When Can Builders Withdraw Funds?
Withdrawals from the RERA escrow account are allowed only in proportion to the percentage of project completion, and only after:
Certification by a Project Architect – to confirm stage-wise completion
Certification by an Engineer/Structural Consultant – to confirm work progress and safety
Certification by a Chartered Accountant – to verify that withdrawal aligns with construction progress
All three certificates must be uploaded to the UPRERA portal as supporting documentation for each withdrawal request.
Documentation Needed
Before withdrawal, the following documents must be maintained and submitted:
Project Progress Report from Architect
Cost incurred calculation from Engineer
CA’s Certificate in specified UPRERA format
Bank passbook and transaction details
Declaration that funds will not be used for unrelated purposes
Non-Compliance = Penalty
Builders who fail to maintain proper escrow usage or divert funds face:
Heavy penalties (up to 10% of project cost)
Project registration cancellation
Legal action under Sections 60 and 61 of the RERA Act
Why Understanding Escrow Rules Is Critical
For developers, staying compliant with escrow rules is more than a legal formality—it’s about building trust with buyers and regulators.
Buyers today actively check escrow status and RERA declarations before booking flats.
Failing to adhere to these rules can damage reputation, delay approvals, and cause financial stress.
How ReraAid Helps Builders Stay Compliant
At ReraAid.com, we specialize in UPRERA compliance solutions. For developers, we provide:
1. Assistance in opening RERA-compliant escrow accounts
2. Help in preparing and uploading Architect, Engineer & CA certificates
3. Advisory on fund withdrawal procedures
4. Audit support for RERA inspections
5. Ongoing reporting support for quarterly progress updates
📞 Need Help Managing Escrow Compliance?
