CHENNAI: The Tamil Nadu Real Estate Regulatory Authority (TNRERA) will strictly enforce the long-mandated three-bank-account structure for real estate projects from January 1, 2026, tightening oversight of buyer funds and plugging gaps that have allowed weak audit trails and potential diversion of money.
In an order issued earlier in December under Section 37 of the Real Estate (Regulation and Development) Act, 2016, the authority said the directions will apply to all project applications and resubmissions received on or after January 1, 2026. While the framework has existed since RERA’s implementation, the regulator said enforcement and monitoring needed to be strengthened.
The TNRERA’s review found that although promoters broadly complied with the requirement to park 70% of the fund collected from buyers in a designated account for land and construction costs, the initial collection accounts often lay outside regulatory oversight. In some cases, these accounts were shared across multiple projects, increasing the risk of fund diversion and diluting traceability.
Under the reinforced regime, promoters must maintain three project-specific accounts in the same scheduled bank and branch ---- a RERA-designated collection account to receive 100% of buyer payments; a RERA-designated separate account holding 70% of collections earmarked for land and construction; and a RERA-designated transaction account retaining the remaining 30% for other project-related expenses. Transfers must be executed only through an automated end-of-day sweep.
A Mohamed Ali, president of CREDAI Chennai, said the developers’ body has been aware of the norms since the TNRERA came into being and has been implementing them.
However, he noted that certain issues need discussion, particularly in joint venture (JV) developments where landowners retain a portion of the building. In such cases, he said, there may be no need for landowners to maintain three separate bank accounts. CREDAI has raised these concerns with the authority.
Haresh Kishor, managing director of KG Builders, said that these rules would enhance buyer confidence by ring-fencing funds for project completion, while also accelerating consolidation by weeding out weaker, informal players and favouring organised developers with stronger compliance capabilities.
How the three-account framework works
1 Applicable for all applications received on or after January 1, 2026 (including resubmissions)
2 All buyer money must first flow into a non-operational collection account
3 Same-day auto sweep: 70% to separate account, 30% to transaction account
4 70% account: no lien/charge; drawdowns only with QR-coded certificates
5 Refunds capped at 70% from separate account, 30% from transaction account
6 All project loans to be disclosed with auditor end-use certification
7 Joint developments require two parallel sets of three accounts
8 Banks to freeze accounts on registration lapses; final withdrawals only after completion report from TNRERA