RERA Escrow Withdrawal: How the 70% Rule Works (Forms 1, 2, 3 Guide)

The RERA 70% Escrow Requirement

Section 4(2)(l)(D) of the RERA Act requires developers to deposit at least 70% of all amounts collected from allottees into a designated project bank account (the RERA escrow). This money can only be used for construction costs and land costs — certified by a CA and supported by architect/engineer certificates.

The Withdrawal Process: Forms 1, 2, and 3

Step-by-step withdrawal process

1. Complete construction work to a certifiable stage
2. Obtain Form 1 from registered architect (completion %)
3. Obtain Form 2 from structural engineer (where applicable)
4. Submit Forms 1+2 to your CA with escrow bank statement
5. CA verifies: withdrawal ≤ (completion% × total cost) − previous withdrawals
6. CA certifies on Form 3 with UDIN
7. Submit withdrawal application to bank with all three forms
8. Reflect withdrawal in QPR escrow figures for that quarter

Common escrow compliance mistakes

• Withdrawing before getting all three forms properly signed
• Withdrawal amount not proportionate to actual completion %
• Escrow balance falling below 70% of total collections (not just recent period)
• Using escrow funds for non-construction purposes (marketing, overheads, salaries)
• Not reflecting withdrawals in the QPR filing for that quarter