An under-construction flat buyer often pays a substantial amount before the finished home exists. One important protection under India's Real Estate (Regulation and Development) Act, 2016 is the requirement for promoters to deposit seventy per cent of amounts realised from allottees, from time to time, into a separate scheduled-bank account for that project. This account is intended for land and construction costs; it is not a personal escrow for each buyer and does not insure a project's completion.
## What Section 4 actually requires Section 4(2)(l)(D) requires a promoter's declaration that seventy per cent of collections from allottees will be deposited in a separate account for the real-estate project. Permitted withdrawals should relate to project completion and be supported by certification from an engineer, an architect and a chartered accountant in practice. The Act also provides for an annual audit of the account. The provision is designed to limit diversion of collections to unrelated uses.
## The rule does not mean every rupee is locked The required proportion is seventy per cent, not one hundred per cent. A promoter may make eligible withdrawals under the statutory framework. Funds being in a separate account therefore do not mean a developer must keep all customer payments untouched until possession. Nor does a bank holding the project account automatically become liable to deliver the flat.
## Can buyers inspect the bank balance? A buyer should not assume access to full internal bank transactions. Instead, review the registration and public disclosures available through WBRERA, ask for the project's current completion status and seek written clarification about construction-linked demand notices. Where a serious discrepancy arises, consult a lawyer about lawful information requests and regulatory remedies. Do not rely on an unverified screenshot as proof of compliance.
## What else should you verify besides funding? Review the land-title disclosures, sanctioned plan, registration validity, promised completion date, quarterly project updates, past approvals and any material project-specific notices. Find out whether the phase you are buying belongs to the registered phase shown on the regulator's portal. An attractive payment plan does not establish that a project is progressing as represented.
## Link payments to real milestones Ask your lender to describe disbursement rules and compare the promoter's demand notices against the agreement for sale. Check whether the proposed schedule matches construction progress. Maintain receipts, email correspondence and all signed documents in one folder. Keep enough liquidity for delays in move-in, rent and loan obligations; do not assume regulatory safeguards eliminate cash-flow risk.
## What if the promoter violates the rules? The authority can examine statutory compliance and determine applicable regulatory consequences. Individual remedies depend on facts, the agreement, applicable legislation and the authority's process. A buyer should preserve evidence and obtain professional advice before taking an irreversible step such as stopping contractual payments.
