Tamil Nadu RERA Mandates Three Bank Accounts for Real Estate Projects to Ensure Transparency

To ensure that money collected from homebuyers for one real estate project is not diverted to another, the Tamil Nadu Real Estate Regulatory Authority (TN RERA) has issued a significant order. This directive requires promoters and builders to operate three separate and designated bank accounts for every registered project. The order, issued on December 12, 2025, aims to enhance transparency and accountability in the real estate sector.

The three bank accounts are designed to serve distinct purposes. The first account will be used for the collection of advance payments from homebuyers. The second account will be designated for the disbursement of funds to contractors and suppliers. The third account will be for the deposit of any surplus funds, which can be utilized for project completion or other approved purposes. This segregation of funds is intended to prevent the misuse of homebuyer money and ensure that each project is adequately funded.

TN RERA has emphasized that these accounts must be maintained with a scheduled commercial bank, and the details of these accounts must be provided to the authority. Promoters are also required to submit monthly statements of these accounts to the TN RERA, along with a certificate from a chartered accountant. This regular monitoring will help the authority to track the financial health of each project and take necessary actions if any discrepancies are found.

The move is expected to boost confidence among homebuyers, who have often been victims of delayed or incomplete projects due to the misappropriation of funds. According to industry experts, this regulation will not only protect the interests of homebuyers but also promote ethical practices among real estate developers. It is a step towards creating a more trustworthy and reliable real estate market in Tamil Nadu.

However, some developers have expressed concerns about the additional administrative burden and the potential increase in operational costs. They argue that the requirement to maintain and report on three separate accounts could lead to increased compliance costs. Despite these concerns, the TN RERA has maintained that the benefits of enhanced transparency and accountability outweigh the potential challenges.

The implementation of this order is a significant step in the ongoing efforts to regulate the real estate sector in Tamil Nadu. It aligns with the broader goals of the Real Estate (Regulation and Development) Act, 2016, which aims to protect the rights of homebuyers and promote a fair and transparent real estate market. The TN RERA has also announced that it will conduct regular audits and inspections to ensure compliance with the new regulations.

In conclusion, the mandate of maintaining three separate bank accounts for each real estate project is a proactive measure by the TN RERA to safeguard the interests of homebuyers and promote transparency in the real estate sector. While it may pose some challenges for developers, the long-term benefits of a more regulated and trustworthy market are expected to outweigh these concerns.