Ensures Compliance with Terms
Escrow ensures that the agreed-upon terms—such as property inspections, repairs, or title transfers—are fulfilled before the funds are released, providing security for both parties.
Secure Handling of Funds
Real estate transactions typically involve large sums of money. Escrow securely holds these funds until all parties have met the necessary conditions, reducing the risk of financial mismanagement or disputes.
Confidence for All Parties
When the Funds are kept in escrow then the cashflow of the project can be Monitored. As Realtor/Builder can only use Fraction of the amount out of the collections from buyers, Then Buyer will also have a confidence on that their Money is kept safe and in case of delayed delivery and Project non-completion, Buyers have a surety of their money being safe in the escrow account.
Master collection account
RERA designated account
Realtor Operations Account
A RERA Agreement is a legally binding contract between a homebuyer and a real estate developer governed by the Real Estate (Regulation and Development) Act, 2016 (RERA). It ensures transparency and accountability in real estate transactions. The agreement typically includes details of the property (e.g., carpet area, price), project completion timelines, payment schedules, obligations of both parties, and penalties for non-compliance. It safeguards buyers' investments and provides legal recourse in case of disputes or delays.
All the collections received from the Real estate buyers need to be deposited in a ratio of 70:30 where 70% of funds received from homebuyers into a dedicated escrow account which is RERA Designated account. This account is exclusively for covering land acquisition and construction costs of the specific project.
The remaining 30% of the funds can be used for Constructions & operating expenses of the projects
Funds deposited in the escrow account are strictly for construction and development of the designated project.
Diversion of funds to other projects or personal use is strictly prohibited.
Developers can withdraw funds only in proportion to the project completion stage. Withdrawals must be certified by:
An architect or engineer verifying project progress.
A chartered accountant confirms that withdrawals align with work completed.
The escrow account must be audited annually by a certified chartered accountant within six months of the financial year’s end.
This ensures compliance with RERA provisions and provides transparency in fund utilization.
Funds collected for one project cannot be used for another.
The escrow system safeguards homebuyers' money and ensures every rupee contributes to the designated project.
Non-compliance with escrow provisions can result in:
Fines of up to 10% of the project’s estimated cost.
In severe cases, imprisonment of the developer.
The escrow system enhances confidence by ensuring homebuyers’ funds are used exclusively for project completion.
It promotes transparency and accountability, reducing financial risks for buyers.
Castler can help real estate owners (builders) to manage their escrow accounts for better transparency of funds, track the payment release status from the escrow account and for better reconciliation of accounts.
RERA, introduced in 2016, mandates that developers maintain escrow accounts to ensure funds from homebuyers are used solely for the specific real estate project, preventing misuse for other purposes.
Real estate escrow is a secured mechanism where banks hold funds on behalf of real estate owners, and buyers deposit their payments into the designated escrow account. Payments are released from the escrow only upon fulfilling the conditions outlined in the escrow agreement.
Managing multiple escrow accounts for various projects is challenging for developers, and traditional escrow services are often slow, expensive, and vulnerable to fraud.
Castler offers an efficient and secure solution for managing RERA escrow accounts, providing fast, economical, and transparent digital escrow services that mitigate fraud risks and simplify the process.
Castler's digital identification services ensure secure management of RERA accounts, providing peace of mind for homebuyers while enabling developers to focus on timely project delivery.
While RERA escrow accounts protect homebuyers and ensure developer accountability, managing them is challenging. Castler offers an efficient solution, helping both developers and homebuyers through streamlined, secure, and transparent escrow management.
Compliance with RERA regulations
Verification of funds and compliance
Reduced risk of disputes and delays
Expertise in real estate transactions
Customizable terms and conditions
Timely and transparent transactions
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