Starting July 1, developers in Maharashtra will no longer be able to deposit homebuyers’ money into different bank accounts. The Maharashtra Real Estate Regulatory Authority (MahaRERA) has mandated that developers maintain designated bank accounts to enhance financial discipline, transparency, and accountability in housing projects.
Previous Practices and New Mandates
Until now, developers have often asked homebuyers to make payments into multiple accounts for various purposes, such as booking amounts, amenities, and infrastructure. This practice will be discontinued to protect homebuyers’ investments and streamline financial operations.
MahaRERA has mandated developers to open three specific bank accounts in a single bank:
- RERA Designated Collection Account: To receive 100% of the revenue from flat buyers.
- RERA Designated Separate Account: To hold 70% of funds for project land and construction costs.
- RERA Designated Transaction Account: To manage the remaining 30% of funds.
Implementation and Consultation
The directive will be mandatory from July 1, 2024. A consultation paper was issued in March, and after extensive discussions with stakeholders, these measures were finalized. MahaRERA Chairman Ajoy Mehta emphasized that this initiative aims to build trust among homebuyers and ensure their investments are secure.
Legal and Financial Provisions
Section 4(2)(i)(D) of the Real Estate (Regulation and Development) Act, 2016, supports the requirement for dedicated bank accounts. The new system mandates that 100% of the revenue, excluding government taxes and charges, be deposited into the RERA Designated Collection Account. Subsequently, 70% of the funds will be transferred to the RERA Designated Separate Account for land and construction, while the remaining 30% will go into the RERA Designated Transaction Account. Banks will facilitate these transfers through auto sweep, ensuring funds are not misappropriated.
Refund and Compensation Protocol
In the event of a homebuyer canceling their registration, developers will be required to refund 70% of the amount and compensate for any losses from the RERA Designated Separate Account. Interest will also be applicable. The remaining 30% will be refunded from the RERA Designated Transaction Account. This process aims to streamline refunds and reduce delays.
Additional Provisions and Safeguards
Projects with multiple promoters must open an additional RERA Designated Master Account to manage collections. The RERA Designated Collection and Separate Accounts are protected from government attachments, ensuring homebuyers’ funds are secure. Developers cannot alter these accounts without MahaRERA’s approval and must submit certifications from chartered accountants, engineers, and architects for withdrawals.
