MahaRERA Mandates Developers to Maintain Separate Bank Accounts for Home Buyers' Money
In a bid to enhance transparency and accountability in the real estate sector, MahaRERA has made it mandatory for developers to maintain separate bank accounts for home buyers' money.
MahareraReal EstateHome BuyersBank AccountsFinancial DisciplineTransparencyReal Estate MumbaiJun 27, 2024
Starting July 1, 2024, developers will no longer be allowed to deposit home buyers' money in different bank accounts for various purposes. Instead, they will be required to open three designated bank accounts 'RERA Designated Collection Account' for 100% of revenue from flat buyers, 'RERA Designated Separate Account' for 70% of funds allocated for project's land and construction, and 'RERA Designated Transaction Account' for the remaining 30% of funds.
MahaRERA Chairman, Ajoy Mehta, emphasized the need for financial discipline and transparency in project operations, stating that this measure will enable precise financial oversight and minimize potential delays in project completion. The Authority has also mandated that projects with more than one promoter can open a 'RERA Designated Master Account' to receive all collections from home buyers.
Section 4(2)(i)(D) of the Real Estate (Regulation and Development) Act, 2016, already provides for dedicated bank accounts to ensure transparency, financial discipline, and better monitoring of transactions. This new directive takes it a step further by segregating revenue and ensuring that developers cannot withdraw funds from these accounts without proper authorization.
The move is expected to benefit home buyers and enhance the credibility of the real estate sector. It will also restrict misappropriation of funds, bring in financial discipline, and ensure timely project completion.
In a significant departure from current practices, developers will now be required to declare loans availed from financial institutions against the mortgage of land or flats or the entire project. This will provide greater transparency and protect home buyers from potential problems in the future.
Frequently Asked Questions
What is the new directive issued by MahaRERA?
The directive mandates developers to open three separate bank accounts in a single bank to manage home buyers' funds.
What are the three designated bank accounts required to be opened by developers?
The three accounts are: 'RERA Designated Collection Account', 'RERA Designated Separate Account', and 'RERA Designated Transaction Account'.
What is the purpose of segregating revenue into different accounts?
The purpose is to ensure transparency, financial discipline, and better monitoring of transactions.
Can developers withdraw funds from these accounts without authorization?
No, developers cannot withdraw funds from these accounts without proper authorization.
What is the expected benefit of this new directive?
The directive is expected to benefit home buyers, enhance the credibility of the real estate sector, and ensure timely project completion.
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