Homebuyers in Maharashtra, rejoice! A new wave of transparency has washed over the real estate sector with the Maharashtra Real Estate Regulatory Authority’s (MahaRERA) implementation of designated bank accounts for developers, effective July 1st, 2024. This revolutionary move aims to safeguard your hard-earned money and ensure its proper utilization for the project you’re invested in.
Here’s what you need to know about MahaRERA’s bank account mandate:
Three Designated Accounts: Developers must now operate three separate bank accounts for each project. This segregation ensures clear allocation and monitoring of funds.
- RERA Designated Collection Account: This account receives 100% of your payments, excluding government taxes and charges. Every penny you contribute goes here, providing a central pool for project finances.
- RERA Designated Separate Account: At least 70% of the funds collected in the Collection Account are transferred to this account. This money is earmarked specifically for land acquisition and construction costs, ensuring your investment directly translates into project progress.
- RERA Designated Transaction Account: The remaining 30% of the funds reside in this account. This provides developers with operational flexibility for project-related expenses like marketing and administrative costs.
Enhanced Transparency: This system fosters clear visibility into project finances. You can be confident that your money is being used for the intended purpose, minimizing the risk of misuse or diversion of funds.
Improved Project Completion Rates: By ensuring dedicated funding for construction, MahaRERA’s mandate aims to expedite project completion timelines. Delays due to financial constraints become less likely, bringing you closer to your dream home sooner.
Stronger Buyer Safeguards: The new regulations empower you as a homebuyer.
- First Right to Refund: If you decide to withdraw from the project, you have the first right to a refund of your payments from the collection account, subject to terms and conditions in the agreement.
- Restricted Third-Party Claims: These designated accounts prioritize project needs. Third-party claims on these accounts are restricted, further safeguarding your investment.
What this means for you:
As a homebuyer in Maharashtra, MahaRERA’s bank account mandate empowers you with greater peace of mind. Transparent financial management, improved project completion rates, and stronger buyer safeguards make your real estate journey more secure and informed.
Stay vigilant:
While MahaRERA regulations provide a robust framework, staying informed remains crucial. Ensure your builder adheres to these guidelines and maintains designated accounts for your project. Don’t hesitate to reach out to MahaRERA if you have any concerns.
With this new era of transparency, Maharashtra’s real estate sector is poised for a positive transformation. Homebuyers can now invest with greater confidence, paving the way for a more secure and prosperous future.
MahaRERA Chairman Ajoy Mehta said the measures, which followed a consultation process initiated in mid-March, are intended to secure homebuyers’ investments and ensure financial oversight in real estate projects.
Projects with multiple promoters will also have the flexibility to open a RERA-designated master account to receive all collections from homebuyers.
Section 4(2)(i)(D) of the Real Estate (Regulation and Development) Act 2016 supports these dedicated bank accounts to promote transparency and financial discipline. Developers must segregate 100 per cent of the revenue received from homebuyers, transferring at least 70 per cent into the RERA-designated separate account for land and construction expenditures. The remaining 30 per cent will go into the RERA-designated transaction account.
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 remaining 30 per cent will be refunded from the RERA-designated transaction account.
MahaRERA’s 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. Developers will also use the RERA-designated transaction account for project-related expenses other than land and construction.
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.
These provisions are designed to check fund misappropriation, ensure transparency, and promote timely project completion. Developers must also disclose any loans secured against the project’s land or flats, detailing the financial institution’s name, address, transaction date, and loan amount. This information must be certified by the project’s chartered accountant.
These measures also aim to safeguard homebuyers, promote financial discipline, and enhance the credibility of the real estate sector.
Also on 1st July, 2024 onwards, The MahaRERA website might also have listed hearing dates for complaints filed against developers for July 1st, 2024. You can find these on the “Maharashtra Real Estate Regulatory Authority” website under “Daily Cause List”.
