To protect homebuyers and reduce project delays, the State Real Estate Regulatory Authority has introduced a new requirement for developers seeking project registration extensions beyond one year. Under the updated rule, developers must deposit an additional 20% of the amount collected from homebuyers into the designated project account when applying for such extensions.

The directive, issued under Section 7(3) of the Real Estate Regulation Act (RERA), 2016, empowers the authority to impose additional conditions in the interest of homebuyers rather than cancelling project registrations. Officials stated that this measure is intended to ensure that funds collected from buyers remain available for construction activities and are not diverted elsewhere.

According to the authority, many delays occur because project escrow accounts—which currently require 70% of buyer collections to be deposited—often lack sufficient funds. With the new guideline, any project seeking an extension of more than one year must ensure an additional 20% of buyer payments is placed in the project account.

However, smaller and mid-sized developers have expressed concerns. They argue that initial construction is often funded through their own capital, as bookings typically increase only after visible progress on site. They caution that the requirement to deposit an additional amount—especially when initial buyer collections are limited—could strain their cash flow. Some also suggested that exemptions should be considered for delays caused by unavoidable circumstances such as heavy rains or floods.

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