A buyer pays you an instalment. Some of it is genuinely yours to use freely; most of it is not. Under RERA, the larger share is spoken for the moment it lands — it belongs to the project, in a specific account, to be spent only as the building actually rises. For a large developer with a finance department, this is routine. For a builder running one or two projects, it is the compliance rule most likely to be broken by accident, because the money, the account and the site progress are tracked in three different places by three different people.
We work with small and mid-market developers, so we see this go wrong in slow motion. It is rarely dishonesty. It is a receipt that never got tied to the right account, or a withdrawal made because a supplier needed paying, without anyone checking it against construction stage. This is a plain-English guide to the 70% rule and how to stop it becoming a finding against you.
What the 70% rule actually says
Section 4(2)(l)(D) of the RERA Act is specific: 70% of the amounts realised from allottees for a project must be deposited in a separate account in a scheduled bank, to cover the cost of construction and the land cost, and used only for that purpose. It is meant to be a no-lien account — buyers' money ring-fenced for the building they are buying into, not a general pool the promoter dips into for other needs. The remaining 30% you may use more freely, but the 70% is not yours to redirect.
The point of the rule is trust. Buyers hand over money years before they get keys, and the separate account is the promise that their money builds their homes. Break it and you have not just tripped a regulation — you have spent someone's flat on something else.
The withdrawal side is where it gets strict
Depositing the 70% is the easy half. Taking it out is where discipline is tested. Withdrawals from the designated account must be in proportion to the percentage of completion of the project, and each withdrawal has to be certified — by an engineer, an architect and a chartered accountant in practice — that it is in line with the stage the construction has actually reached. You cannot draw ahead of the build. And crucially, some costs simply cannot be charged to this account at all: marketing and advertising spend, and loan repayments or interest to financial institutions, are not permissible against the 70%. Those come from your own share.
What clean collections actually require
- Every receipt from a buyer split correctly at the point it arrives — the ring-fenced portion into the designated account, the rest to your general account.
- Each collection tied to the unit, the buyer, and the demand it settles, so the trail is unbroken.
- A live view of construction stage, because that is what governs how much you may withdraw.
- Withdrawals matched to the tri-certified percentage of completion — never ahead of the build.
- A clean line between what the 70% can fund (construction, land) and what it cannot (marketing, loan servicing).
- Records assembled the way your engineer, architect and CA need them, so certification is a review, not a reconstruction.
Where a small builder slips
The failure is almost always the same shape: money arrives into whatever account is convenient, gets used for whatever is most urgent, and the tie between receipt, designated account and construction stage is reconstructed later — if at all. When collections live in a bank statement, demands live in a broker's head, and construction progress lives on the site engineer's phone, nobody is positioned to say 'this withdrawal is proportionate and certifiable' in the moment. So it gets said afterward, under pressure, when a quarterly certification or an audit forces the question. Generic accounting software does not help here, because it has no concept of a designated RERA account, a demand schedule, or a percentage of completion. It records money; it does not understand the rule the money is under.
It is rarely dishonesty. It is a receipt that never got tied to the right account, drawn against a stage nobody had confirmed.
You should not need a finance team for this
A one- or two-project builder cannot justify a full finance function, and should not have to, to stay clean on the 70% rule. What you need instead is a system where the split happens automatically as money comes in, where every rupee is tied to a unit and a demand, and where withdrawals are visible against real construction stage — so that when your CA, engineer and architect certify, they are confirming a picture that is already assembled and already correct. Compliance stops being a quarterly scramble and becomes a by-product of running collections properly day to day.
How BizRevolt keeps the 70% clean
BizRevolt ties collections to units, buyers and demand letters, so every receipt is attributed the moment it lands and the ring-fenced share is never guessed at later. Construction stage and demands live in the same place as the money, so what you may withdraw is always visible against what you have actually built. Marketing and loan-servicing costs stay clearly outside the designated account, where the rule requires them to be. When certification time comes, the trail your engineer, architect and CA need is already there. Pricing is per user — ₹999, ₹1,599, or ₹2,499 a month depending on plan — a fraction of an enterprise suite, and built around Indian real-estate reality rather than bolted onto it.
We are building this in the open, with builders who are tired of choosing between a spreadsheet and a spaceship. If keeping the 70% account clean has ever cost you a bad week, tell us where it hurts. Message us, or call and talk to a person on +91 91 0657 4865 — we would rather learn your workflow than lecture you about ours.
Image credit: Biswarup Ganguly, CC BY 3.0, via Wikimedia Commons.