Comprehensive RERA guide for builders and promoters in Raipur. Explains CG RERA project registration, 70% Escrow Account rules, Form 1-2-3 CA certificates, and Form 5 annual audits.
In This Article
5 SectionsReal estate developers, colonizers, and commercial builders in Raipur, Naya Raipur (Atal Nagar), Durg, and Bhilai operate under strict regulatory scrutiny enforced by the Chhattisgarh Real Estate Regulatory Authority (CG RERA).
Under RERA, non-registration of eligible projects, unauthorized marketing, or improper withdrawal from designated bank accounts carries severe financial penalties — including project freeze orders and fines up to 10% of total estimated project cost.
Core RERA Commandment: No promoter can advertise, market, book, sell, or offer for sale any plot, apartment, or commercial space in a real estate project without first obtaining a valid RERA Registration Number from CG RERA.
1. Statutory Thresholds for Mandatory CG RERA Registration
| Parameter | Registration Required? | Statutory Threshold |
|---|---|---|
| Land Area | Mandatory | If total land area to be developed exceeds 500 Square Meters |
| Number of Units | Mandatory | If total number of apartments, shops, or plots exceeds 8 Units |
| Redevelopment / Renovation | Exempt | Only if project does not involve new allotment, marketing, or advertising |
| Completion Certificate | Exempt | Projects that received valid Completion Certificate prior to RERA commencement |
2. The 70% Escrow Account Mechanism: Section 4(2)(l)(D)
The financial backbone of RERA compliance is the 70% Dedicated Bank Account Rule:
- Mandatory Deposit: 70% of all funds collected from homebuyers/allottees must be deposited into a separate, dedicated bank account maintained in a scheduled bank.
- Restricted Usage: Escrow funds can be used exclusively to cover:
- Land purchase/acquisition cost.
- Actual construction costs incurred for the specific project.
- Proportional Withdrawal Formula: Money can only be withdrawn from the escrow account in proportion to the percentage of project completion.
3. The Form 1, 2 & 3 Certification Framework
To execute a valid withdrawal from the 70% escrow account, the promoter must obtain three concurrent professional certificates:
[Form 1: Architect] ➔ [Form 2: Engineer] ➔ [Form 3: Chartered Accountant] ➔ [Bank Escrow Withdrawal]
- Form 1 (Architect Certificate): Certifies the percentage of physical construction completed for each building/tower.
- Form 2 (Engineer Certificate): Certifies structural safety, quality of materials, and actual construction costs incurred on site.
- Form 3 (Chartered Accountant Certificate): Reconciles total funds collected from allottees, total money deposited in the 70% account, actual land and construction expenditure incurred, and computes the maximum permissible withdrawal amount.
Practical Escrow Withdrawal Example
A residential apartment project in VIP Road, Raipur has an estimated total construction & land cost of Rs. 20 Crores.
- Total money collected from buyers to date: Rs. 10 Crores.
- 70% deposited in Escrow Account: Rs. 7 Crores.
- Architect & Engineer certify project is 40% complete (total expenditure incurred = Rs. 8 Crores).
Calculation: Maximum cumulative withdrawal permitted = $40% \times \text{Rs. 20 Crores} = \text{Rs. 8 Crores}$. Since Rs. 7 Crores has been deposited into the escrow account, the promoter can withdraw up to Rs. 7 Crores to settle ongoing construction liabilities.
4. Quarterly Progress Reports (QPR) & Form 5 Annual Audit
Quarterly Updates (QPR)
Within 15 days of the end of each quarter, promoters must log into the CG RERA web portal and update:
- Number of plots/apartments booked during the quarter.
- Status of construction milestones with photographic proof.
- Approvals pending and approvals received.
Form 5 Annual RERA Audit
Under Section 4(2)(l)(D) third proviso, every promoter must get their project accounts audited by a practicing Chartered Accountant within 6 months of financial year end (by 30th September).
- The auditor files Form 5, certifying that funds were collected, deposited, and withdrawn strictly in compliance with RERA provisions.
5. Penalty Schedule for Non-Compliance
| Violation | Relevant Section | Statutory Penalty |
|---|---|---|
| Non-Registration of Project | Section 59 | Up to 10% of total estimated project cost |
| Providing False Information in Application | Section 60 | Up to 5% of estimated project cost |
| Breach of Escrow Account Rules | Section 61 | Fines up to 5% of project cost & bank account freeze |
| Failure to File QPR / Annual Audit | Section 63 | Daily penal fee up to 5% of project cost |
Professional RERA Advisory & Certification Services
Our specialized real estate practice at Rabi Agrawal & Associates provides complete CG RERA project registration, Form 3 Escrow Withdrawal certifications, Form 5 annual RERA audits, and quarterly QPR filing services for builders and land developers in Raipur, Durg, Bhilai, and Naya Raipur.
Consult our practice team at Raipur Head Office or Jayapatna Branch for RERA project compliance.
Authored by CA Rabi Agrawal & Practice Team
Rabi Agrawal & Associates, Chartered Accountants — Head Office Raipur (CG), Branch Office Jayapatna (Odisha).