Builder Escrow Account & RERA Collection Guide Pune 2026 — Is Your Money Safe?

One of the most consequential protections RERA introduced for Indian homebuyers is the mandatory escrow mechanism. Before 2016, builders routinely collected money from Project A buyers and used it to fund Project B land acquisition, pay off investor loans, or simply meet promoter personal expenses. Thousands of Pune buyers lost crores in projects that stalled mid-construction. The escrow rule was designed to end exactly that. In 2026, this protection exists on paper for every registered project in Maharashtra — but whether it is actually working for the project you are considering requires active verification on your part.

This guide explains how the MahaRERA escrow system works, how to verify it, what happens when builders violate it, and the practical steps you must take before writing your booking cheque.

What Is the RERA Escrow Requirement?

Under Section 4(2)(l)(D) of the Real Estate (Regulation and Development) Act, 2016, every registered real estate project must maintain a dedicated bank account — commonly called the RERA escrow account or designated account — into which at least 70% of all amounts realised from allottees must be deposited. This money can only be withdrawn to meet land cost and construction cost for that specific project.

MahaRERA, Maharashtra’s state RERA authority, implements this through its project registration process. When a builder registers a project on MahaRERA, they must declare the designated bank account. Every quarterly compliance report filed by the builder thereafter must include the account details, balances, and withdrawal transactions.

The 70% figure is a floor, not a cap. Builders can choose to deposit 100% of collections into the escrow — and some conservative developers do exactly that to maintain clean project accounts. The remaining 30% of collections is at the builder’s discretion and can be used for any project-related or business purpose.

Which Bank Holds the Escrow?

The escrow must be held with a scheduled commercial bank — which in practice means any nationalised bank (SBI, Bank of Baroda, Canara Bank) or reputed private sector bank (HDFC Bank, ICICI Bank, Axis Bank). The account must be a current account opened specifically for the project, not the builder’s general corporate account.

The bank plays a passive verification role. When a builder wants to withdraw funds from the escrow account, they must submit:

• An architect’s certificate confirming the stage of construction completed
• An engineer’s certificate corroborating the same
• A CA certificate confirming the withdrawal is proportionate to work done

The bank then releases funds in proportion to the completion certificate. This three-party certification requirement is meant to prevent fraudulent withdrawals — but in practice, banks do not independently verify site conditions. They rely entirely on the certificates submitted.

How Withdrawals Are Authorised — The Milestone-Based System

MahaRERA’s withdrawal mechanism is milestone-based. Construction is divided into stages — typically foundation, plinth, floor by floor slabs, terrace, finishing, and utilities. At each stage, the builder gets the relevant certificates and submits a withdrawal request to the bank.

The withdrawal amount must be proportionate to the percentage of work completed multiplied by the total project cost. If a project’s total construction cost is ₹40 crore and 30% of construction is complete, the builder can withdraw up to ₹12 crore from the escrow (assuming sufficient funds have been deposited).

This staged release system means that even if a builder is dishonest about one stage, the fraud is theoretically capped to that stage’s withdrawal amount rather than the entire collection. In practice, well-managed projects with reputable builders never have withdrawal issues because their construction pace matches their sales collection pace.

How to Verify the Escrow Account Before Booking

The MahaRERA project page is your primary verification tool. Here is the exact process:

Step 1: Get the RERA registration number Every legitimate project must display its MahaRERA registration number in all advertisements, brochures, and booking forms. It looks like P52100XXXXX (for Pune district, area code 521).

Step 2: Visit the MahaRERA portal Go to maharera.mahaonline.gov.in, click on “Projects,” and search by registration number or project name.

Step 3: Check the Designated Account details On the project detail page, look for the “Bank Account Details” or “Designated Account” section. This shows the bank name, branch, and account number. If this section is blank or shows “Not Updated,” that is a red flag worth investigating.

Step 4: Check quarterly compliance reports MahaRERA requires builders to file quarterly reports (QPR — Quarterly Progress Reports). Download the latest QPR for the project. It should show total collections received, total amount deposited in the designated account, and total withdrawals. Do the math: deposits should be at least 70% of total collections.

Step 5: Cross-check with the project progress Compare the reported construction progress percentage on MahaRERA with what you can see at the site or from drone footage. If the builder claims 60% construction complete but the site appears to be at 20% progress, the QPR numbers warrant deeper scrutiny.

What Happens When a Builder Diverts Escrow Funds?

Fund diversion — where a builder uses escrow money for non-project purposes — is a serious violation of RERA. The consequences, in theory, are severe:

MahaRERA Penalties: Under Section 61 of RERA, a builder found violating project account provisions can be fined up to 5% of the estimated project cost. This can amount to crores for a large Pune project.

Revocation of Registration: Under Section 7, MahaRERA can revoke a project’s registration if the builder commits serious violations including escrow diversion. A revoked project cannot market new sales and buyers get priority in refund claims.

Criminal Liability: Persistent or fraudulent escrow violations can be referred to a criminal court. The promoter, company directors, and key managerial personnel can face prosecution under Section 70 of RERA read with IPC provisions on criminal breach of trust.

In Practice: Enforcement has been uneven. Smaller builders in Pune’s outer rings have been caught diverting funds, received fines, and continued operating with delayed timelines. The mechanism works imperfectly — it is far better than the pre-RERA era, but not foolproof.

Comparison: RERA Escrow vs Pre-RERA Era

Before 2016, there was no escrow requirement. Builders operated under:

• No financial ring-fencing: Collections from Flat A in Tower 1 could fund the land purchase for an entirely different project in a different city
• No withdrawal oversight: Builders decided when and how much to withdraw, with no third-party certification requirement
• No public financial disclosure: Buyers had no way to see how their money was being used
• No authority to complain to: If your builder ran out of money, you could file a consumer court case — a process that took 5–8 years to resolve

The result was hundreds of stalled projects across Pune. Iconic cases like the Mantri cluster in Wakad (partially stalled), several small townships in Ambegaon, and multiple projects in Undri saw buyers wait 7–10 years beyond promised possession dates with no recourse.

The RERA escrow mechanism has materially improved the situation. Default rates on new RERA-registered projects are measurably lower than on pre-RERA launches. Pune’s construction completion rate for RERA projects registered in 2017–2019 is significantly better than for pre-2016 launches in the same areas.

Red Flags That Suggest Escrow Non-Compliance

Watch for these warning signs during your due diligence:

Blank or outdated designated account on MahaRERA: If the bank account details have not been updated in months, the builder may not be maintaining the account properly.

QPR filings missing or delayed: MahaRERA has cracked down on non-filers, but smaller builders still sometimes go 2–3 quarters without filing. Missing QPRs mean you have no visibility into fund flows.

Offers of “all-in” cash deals with discounts: If a builder offers you a significant discount for paying entirely outside the registered sale price (i.e., cash component), it suggests they may be trying to keep money off the books and outside the escrow net.

Construction visibly slower than reported progress: Significant gaps between reported milestones and site reality can indicate funds are not flowing to the construction contractor as expected.

Builder has multiple stalled projects: Check if the same promoter has stalled or delayed projects registered on MahaRERA. Escrow violations rarely happen in isolation — they reflect a broader pattern of financial mismanagement.

How to File a Complaint If Escrow Is Not Maintained

If you have evidence (from QPRs or site observations) that a builder is not maintaining the escrow properly, you can:

1. File a complaint on MahaRERA’s online portal at maharera.mahaonline.gov.in under the “Complaint” section. The process is free, and you can track your complaint online.

2. Attach documentary evidence: Download the QPRs showing the discrepancy, take site photographs, and include your booking agreement copy.

3. Request escrow inspection: In your complaint, specifically request MahaRERA to order an audit of the designated account. MahaRERA has the power to call for bank statements and verify actual deposits and withdrawals.

4. Join an allottee association: If multiple buyers in your project are concerned, a collective complaint carries more weight than individual complaints. MahaRERA adjudicating officers are more likely to order a full audit when multiple allottees are involved.

5. Engage a RERA-registered advocate: For projects with large exposures (₹1 crore+), engaging a lawyer familiar with MahaRERA procedures is worth the cost. Several Pune-based advocates specialise exclusively in RERA matters.

Practical Steps Before Booking Any Pune Project

Before signing a booking form or paying any amount, complete this checklist:

1. Verify the RERA registration number on MahaRERA — confirm it is active and not revoked
2. Download the latest QPR and verify the designated account deposit ratio (must be 70%+)
3. Check the bank name and confirm the designated account exists at that branch (you can call the branch)
4. Review the builder’s project history — do they have other projects with possession delays or complaints?
5. Visit the site in person and compare actual construction progress with MahaRERA-reported progress
6. Get all collection receipts in the registered project’s bank account, not any other account
7. Ensure your allotment letter and agreement for sale reference the project’s RERA registration number
8. Never pay any amount that is not covered by a stamped receipt against the registered sale consideration

The Bottom Line

The MahaRERA escrow system is a genuine protection for Pune homebuyers — but it requires your active engagement to be effective. Builders who know buyers are watching their QPR filings and designated account deposits are less likely to be casual about compliance. The tools exist; you simply need to use them.

If you are evaluating a project in Pune and want help verifying RERA compliance, escrow status, or builder track record, the team at Pune Realty Hub can assist. We work only with builders who have clean MahaRERA records and actively maintained project accounts.

Visit punerealtyhub.com to explore verified projects or speak with our team about due diligence support for your property purchase.