What Is the 70% and 30% Rule in RERA? A Complete Guide for Homebuyers
Buying a home is one of the biggest financial decisions most people make. To protect homebuyers and increase transparency in the real estate sector, the Government of India introduced the Real Estate (Regulation and Development) Act, 2016 (RERA) . One of the most important provisions under RERA is the 70% and 30% rule , which helps ensure that builders use buyers' money responsibly and complete projects on time. In this blog, we'll explain what the 70% and 30% rule means, why it was introduced, and how it benefits homebuyers. What Is the 70% and 30% Rule Under RERA? Under Section 4(2)(l)(D) of the RERA Act, every registered real estate developer must deposit 70% of the money collected from homebuyers into a separate escrow account. This amount can only be used for: Land acquisition costs Construction expenses Project development costs The remaining 30% of the funds can be used by the builder for other legitimate business and administrative expenses, such as: Marketing and adv...