If you are raising construction finance for a project in Maharashtra, the rules on how buyers' money is held will shape almost every part of the loan — what the lender can take as security, how it gets repaid and how quickly cash reaches the site. This guide explains the RERA 70% account, MahaRERA's three-account system, and what they mean in practice for builders and lenders.
What the law requires
Section 4(2)(l)(D) of the Real Estate (Regulation and Development) Act, 2016 says that 70% of the amounts realised from allottees for a project, from time to time, must be deposited in a separate account in a scheduled bank, to cover the cost of construction and the land cost — and used only for that purpose. The Act adds three conditions:
- Withdrawals must be proportionate to completion of the project.
- Each withdrawal must be certified by an engineer, an architect and a chartered accountant in practice.
- The accounts must be audited within six months of each financial year by a practising CA, who verifies that money was used for the project and withdrawn in proportion to progress.
Breaching Section 4 can attract a penalty of up to 5% of the estimated project cost. Separately, once an agreement for sale is signed, the promoter cannot mortgage that unit, and any such charge does not affect the buyer.
MahaRERA's three-account system
For projects registered on or after 1 July 2024, MahaRERA Order No. 56/2024 requires the promoter to open three accounts in one scheduled bank before applying for registration:
| Compared on | Collection account | Separate account | Transaction account |
|---|---|---|---|
| Receives | 100% of buyer payments (excluding GST, stamp duty, registration and other pass-through charges) | At least 70%, auto-swept from the Collection account | Up to 30%, auto-swept from the Collection account |
| Can be used for | Nothing directly — only the automatic sweep | Land cost, construction cost, interest on project loans, and cancellation refunds up to 70% | Other costs, cancellation refunds beyond 70%, compensation and interest to buyers, penalties |
| Lien or escrow allowed? | No | No | Not addressed by the order |
The Collection account's details must appear in the allotment letter and the agreement for sale, so buyers pay into it directly. Where several promoters share revenue, a Master account is also required. Under Order No. 61/2024, a landowner must open the accounts only if declared a promoter.
What changed in 2024
Before July 2024, compensation and interest paid to buyers could come from the separate account. Under Order 56/2024, these — along with MahaRERA penalties — are not project costs and must come from the Transaction account.
Withdrawing from the 70% account
Every withdrawal needs three certificates:
- Form 1 — Architect: the percentage of the project completed.
- Form 2 — Engineer: the actual cost of construction incurred.
- Form 3 — Chartered accountant: land and construction cost incurred and its proportion to the total estimated cost, which sets the maximum amount that can be withdrawn. This CA must be different from the project's statutory auditor.
At the end of each year, the statutory auditor files Form 5, an annual statement of accounts, and the architect issues Form 4 on completion. One set of certificates can cover several withdrawals in tranches, with a covering letter to the bank each time, and copies are uploaded to MahaRERA.
For ongoing projects where the cost to complete is higher than the money still receivable from buyers, MahaRERA's 2017 circular required 100% of collections after registration to go into the separate account.
What this means for construction lenders
- No lien or escrow on the Collection or Separate accounts. Order 56/2024 says these must be free from all encumbrances, must not be escrow accounts, and must be free of liens, loans and third-party control — including by a lender.
- Interest yes, principal not expressly. The order allows a project loan to be serviced from the Separate account with CA certification, tied to the interest line in Form 3. Only interest on construction finance counts as project cost — principal is shown for information but not added. Don't plan on repaying principal from the 70% account.
- Loan disclosures. At registration, the promoter must disclose existing and proposed project finance — lender, sanctioned, disbursed and outstanding amounts, and mortgage details — with a CA declaration that the loan is used only for the project and a CERSAI report.
- Changing banks needs approval. Moving the RERA accounts to another bank requires MahaRERA's prior written approval, so it pays to choose the account bank carefully at the start.
In practice, lenders typically look to the Transaction account (30%), properly withdrawn funds and the project's other security when structuring repayment — but the order itself is silent on the Transaction account, so arrangements vary and need careful legal drafting.
A practical checklist for builders seeking finance
- Choose your RERA bank with your lender in mind — moving accounts later needs MahaRERA approval.
- Model cash flow on the 70/30 split, remembering that 70% is released only in step with certified progress.
- Keep Forms 1, 2 and 3 current so withdrawals aren't held up.
- Plan principal repayment from the Transaction account and properly withdrawn funds, not the Separate account.
- Disclose all project finance accurately at registration, with the CA declaration and CERSAI report.
How Biz Corp Solutions helps
We arrange construction finance of ₹5 crore to ₹500 crore for builders and developers, and help structure facilities that work within RERA's account rules — from the choice of bank to the disbursement and repayment plan. We approach suitable banks, NBFCs and financial institutions and keep you updated at every stage.
This guide summarises MahaRERA orders and circulars as of October 2026. MahaRERA updates its rules from time to time — check the latest orders or take professional advice for your project.