In response to persistent delays in project completions, the Tamil Nadu Real Estate Regulatory Authority (TNRERA) has taken a significant step to protect the interests of allottees. During its 29th Authority meeting held on July 17, 2025, TNRERA observed that inadequate funds in the project account was a major factor contributing to such delays.

To address this, and exercising its powers under Section 7(3) of the RERA Act, the Authority has issued an order applicable to all promoters seeking extension of project registration where the total extension period exceeds one year.

Key Changes

• Mandatory Additional Deposit: For such extended projects, an additional 20% of the total amount received from allottees (from time to time) must be deposited into the designated bank account that is already maintained under Section 4(2) of the RERA Act.
• Utilisation Restriction: This 20% additional amount, like the regular 70%, shall be strictly used for construction-related costs only, in line with the proviso to Section 4(2)(l)(D).
• Bank’s Role: The bank holding the project account will be instructed by the Authority to ensure the collection and controlled release of this additional 20%, solely for construction purposes.
• Binding Order: This condition is now a part of the terms of extension, and is legally binding on the promoter.
• Immediate Effect: The directive is effective immediately, and applicable to all relevant extension cases going forward.