A developer is required to open an escrow account with a government-approved bank. An escrow account is a bank account into which an account holder deposits funds on a regular basis and authorizes the bank to withdraw funds to pay for certain fixed obligations. According to Section 4(2)(l)(D)of RERA Act, seventy percent of the amount realized by a promoter from buyers shall be deposited in a ‘separate account’ to be maintained in a scheduled bank to cover the cost of construction and the cost of land, and shall be used only for that purpose.
Monnishaa Mahajan, Principal Attorney at Legal Help NRI. Monnishaa has an experience of more than 15 years in assisting and advising NRI's in resolving their disputes in India.