Stricter rules for layout registration in TN

TNRERA moves to tighten checks on plot projects and fund utilisation

Property Pulse

The Tamil Nadu Real Estate Regulatory Authority (TNRERA) is tightening the compliance framework for layout projects, with greater scrutiny of approvals, land titles and essential infrastructure before plots can be registered. The measures are aimed at reducing the scope for plots being sold in unauthorised layouts and improving transparency for buyers.

Under the existing regulatory framework, registration of plots in new layouts can be restricted where the required RERA registration has not been obtained. During the approval and registration process, details relating to the project, land title, sanctioned layout, roads, open spaces and other prescribed requirements can come under scrutiny.

Registration difficult without RERA details

Projects that fall within the scope of RERA registration are required to obtain registration with the authority. Sub-registrars in Tamil Nadu have also been instructed to take relevant TNRERA registration details into account while registering plots in newly approved layouts. For plot buyers, the process provides an additional point of verification before a transaction.

Buyers can check whether the layout has the required approvals and RERA registration, whether the title is clear and whether the approved plan provides for roads, open spaces and other required areas. The issue has particular relevance because buyers of plots in unauthorised layouts can face difficulties relating to roads, parks, public-purpose areas and connectivity.

Tamil Nadu has also introduced provisions for regularisation of certain unauthorised layouts. Applications under the regularisation framework require documents including layout plans, road widths, open spaces, public-purpose areas, land records and encumbrance certificates.

Three-account system adds financial oversight

TNRERA has also introduced a three-bank-account mechanism for real estate projects from January 1, requiring each project to maintain a collection account, a separate account and a transaction account with the same scheduled bank and branch. Under the system, 70 per cent of buyer collections is to be maintained in the account designated for land and construction-related expenditure, while the remaining amounts are handled through the other prescribed accounts.

Withdrawals from the designated 70 per cent account require certification from an architect, engineer and chartered accountant. The mechanism is intended to provide greater visibility into the use of project funds and link withdrawals to the progress and requirements of the project. For developers, the additional checks mean greater documentation and compliance requirements. For plot and homebuyers, they provide more points at which approvals, project registration and fund utilisation can be examined before and during a project.

PLOT CHECKS.

• Layout approvals face closer scrutiny.
• Land titles remain key verification points.
• Roads and open spaces checked.
• Unauthorised layouts face registration hurdles.
• Seventy per cent collections remain ring-fenced.
• Three certifications required for withdrawals.