Protecting Homebuyers' Interests: MahaRERA's New Fund Management Regime
From July 1, developers in Maharashtra must maintain designated bank accounts for homebuyers' payments, ensuring timely project completion and financial transparency.
MahareraMaharashtra Real Estate Regulatory AuthorityHomebuyersReal EstateFund ManagementProject CompletionFinancial TransparencyReal Estate MaharashtraJun 27, 2024
Previously, developers could ask homebuyers to make payments into various accounts for different purposes, such as booking fees and amenities like gyms and swimming pools. However, with the new regulations, developers must open three specific bank accounts in a single bank a RERA-designated collection account, a RERA-designated separate account, and a RERA-designated transaction account.
The RERA-designated collection account will receive 100 per cent of the revenue from homebuyers, while the RERA-designated separate account will allocate 70 per cent of the funds for land and construction expenditures. The remaining 30 per cent will go into the RERA-designated transaction account.
MahaRERA Chairman Ajoy Mehta emphasized that these measures are designed to secure homebuyers' investments and ensure financial oversight in real estate projects. The new protocol aims to streamline the refund process, allowing for quicker resolution of cancellations and ensuring that funds are readily available for refunds and compensations.
Banks will facilitate this process through auto-sweep mechanisms, and funds in these accounts cannot be withdrawn via cheques, online banking, credit or debit cards, or any other means. In case of a homebuyer cancelling their registration, they will be entitled to a refund of 70 per cent of the amount paid, plus compensation for any losses, from the RERA-designated separate account, with interest on the amount applicable.
The RERA-designated collection and separate accounts are legally protected from government attachment, and banks must ensure no third-party encumbrances are created. These accounts must cease operation upon project completion unless extended by MahaRERA.
Withdrawals from these accounts require certificates from chartered accountants, engineers, and architects of the respective projects. In projects with multiple promoters, responsibilities will be based on mutual agreements.
MahaRERA's new regime is a significant step towards enhancing the credibility of the real estate sector, promoting financial discipline, and safeguarding homebuyers' interests.
Frequently Asked Questions
What is the main objective of MahaRERA's new fund management regime?
The main objective is to promote financial discipline, transparency, and protect homebuyers' investments.
How many designated bank accounts must developers in Maharashtra open?
Developers must open three specific bank accounts: a RERA-designated collection account, a RERA-designated separate account, and a RERA-designated transaction account.
What percentage of funds will go into the RERA-designated separate account?
70 per cent of the funds will be allocated for land and construction expenditures.
How will refunds be processed in case of a homebuyer cancelling their registration?
Homebuyers will be entitled to a refund of 70 per cent of the amount paid, plus compensation for any losses, from the RERA-designated separate account, with interest on the amount applicable.
What is the benefit of MahaRERA's new regime for homebuyers?
The new regime aims to safeguard homebuyers' interests, promote financial discipline, and ensure timely project completion.
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