Builders diverting funds from escrow account, Noida buyers allege

Homebuyers in Noida have alleged that some developers in Noida, who are struggling to finish incomplete projects, are diverting funds meant to be kept in an escrow account. The matter have been brought to the notice of Greater Noida Authority and UP RERA.

In a letter written to the two authorities, homebuyers have asked the authorities to disclose the names and the amounts deposited by the developers on the website.

Asked if the authority is taking any action with regard to the builders who have allegedly not opened an escrow account or are diverting the monies from it, UP RERA Chairman Rajive Kumar told Moneycontrol that the authority has written to banks about the matter.

“I would like to clarify here that there is a requirement under the RERA Act that whatever monies the buyers have put in against the project, 70 percent of that in an escrow has to be utilised for purposes of completion of that project. We have also taken up this issue with the banks recently. Bankers need a certificate from the structural engineer, from a chartered accountant and an architect together to let monies be withdrawn out of this 70 percent fund,” he said.