🏗️ New Compliance Rule for Promoters of Ongoing Layouts
In a move to strengthen accountability and ensure completion of development works in ongoing real estate layout and subdivision projects, the Tamil Nadu Real Estate Regulatory Authority (TNRERA) has issued a new circular (No. TNRERA/A3/1677/2025 dated 07.05.2025). It mandates that all promoters of ongoing developments must pay a refundable, non-interest-bearing Security Deposit at the time of project registration.
This Security Deposit acts as a safeguard to ensure that developers fulfil their obligations under the planning authority and local body regulations.
🏦 Security Deposit Structure Based on Project Size or Cost
TNRERA has structured the deposit into four slabs, based on either layout extent or total project cost:
| Extent / Project Cost | Security Deposit Amount |
|---|---|
| Up to 1 Acre or ₹1 Cr | ₹1 lakh |
| >1 to 5 Acres or ₹1–5 Cr | ₹5 lakh |
| >5 to 10 Acres or ₹5–10 Cr | ₹10 lakh |
| Above 10 Acres or >₹10 Cr | ₹20 lakh |
Note: Layout extent includes common areas and land donated to public utilities like TANGEDCO or local bodies.
📌 Clarifying with Examples
- If a project spans 0.75 acres but has a cost of ₹1.5 crore, the applicable deposit is ₹5 lakh.
- If a layout covers 6 acres and costs ₹5 crore, the promoter must deposit ₹10 lakh.
In the Example Given:
- Extent = 0.75 acre → qualifies for Slab 1
- Project cost = ₹1.5 crore → qualifies for Slab 2
Now, TNRERA uses a “whichever is higher” approach, meaning either factor crossing a slab threshold pushes the deposit into that higher slab.
🧾 Refund After Completion Certification
The Security Deposit will be refunded upon:
- Submission of a completion certificate from the project’s registered architect/engineer.
- Verification by TNRERA through possible site inspections to ensure that all development works and planning authority conditions are met.
Once approved, the Accounts Officer will process the refund digitally and submit a monthly refund report to the Authority. The deposit will not earn interest, and a separate account will be maintained for this purpose.
📅 Effective Date and Enforcement
As per follow-up Circular dated 15.05.2025, this policy has come into effect from 01.06.2025. All ongoing layout and subdivision projects registering after this date must comply.
🧭 Why This Matters for Developers and Buyers
For developers, this introduces a financial obligation tied directly to timely completion.
For homebuyers, it’s a safeguard ensuring infrastructure commitments are honored, reducing the risk of incomplete or poorly developed layouts.