Escrow Accounts a Boon For Buyers & Developers
One of the key changes implemented by RERA is the imposition of escrow. It stipulates all real estate builders/ developers to transfer 70% of the money received from customers to an escrow account maintained with a scheduled commercial bank. This particular provision prevents developers from using the funds for other projects, and mitigates the risk of insolvency A recent research report revealed that as many as 220 projects comprising 1.74 lakh homes are completely stalled across seven major cities in India. According to another report, nearly 4.54 lakh units in the country are running behind their completion dates. Against this backdrop, this fail-safe payment system is proving to be a boon for home buyers. On the other hand, an escrow arrangement assures the developer that the buyer has the money to complete the transaction. Essentially, it’s a win-win for both the parties involved in the builder-buyer agreement.
Tags : News/Views Real Estate RERA Projects Buyer Builder-Buyer Agreement developer Escrow commercial bank escrow arrangement money