Starting July 1st, Maharashtra's real estate sector will see enhanced buyer protection and transparency as MahaRERA introduces new regulations. Developers are now required to maintain three distinct bank accounts for project funds, centralising buyer payments and ensuring accountability. The RERA Designated Collection Account receives all buyer funds, excluding taxes, while the RERA Designated Separate Account allocates 70% for construction expenses. The remaining 30% in the RERA Designated Transaction Account offers operational flexibility. These measures aim to curb fund misuse, accelerate refunds, and expedite project completions, bolstering trust between homebuyers and developers in Maharashtra's evolving real estate landscape.
Starting July 1st, homebuyers in Maharashtra will have more protection and transparency when it comes to their investments. The Maharashtra Real Estate Regulatory Authority (MahaRERA) has implemented new rules requiring developers to use specific bank accounts for project funds.
Previously, some developers collected payments from buyers in different accounts for various purposes. This could make it difficult for buyers to track how their money was being used. For example, a buyer might deposit the booking amount in one account and another amount for amenities like a gym or swimming pool in a separate account.
Under the new regulations, developers will need to establish three distinct accounts within a single bank, aimed at centralising all buyer funds for greater transparency and accountability. Here's a detailed overview of these accounts:
RERA Designated Collection Account: This account will receive 100% of the funds paid by homebuyers, encompassing booking fees and other charges, excluding government taxes.
RERA Designated Separate Account: A minimum of 70% of the total collected funds must be transferred to this account. These funds are earmarked specifically for land acquisition and construction expenses. This provision ensures that a substantial portion of the buyer's money is directly allocated to building their homes, potentially mitigating project delays.
RERA Designated Transaction Account: The remaining 30% of the collected funds will be allocated to this account. Developers have the flexibility to utilise these funds for project-related expenses other than land acquisition and construction. This allocation aims to provide operational flexibility while maintaining a significant focus on essential development activities.
These measures under the Real Estate Regulatory Authority (RERA) framework are designed to safeguard buyer interests by enhancing financial discipline and ensuring that funds are utilised efficiently towards the completion of real estate projects.
These new accounts offer several benefits for homebuyers. Increased transparency allows buyers to see exactly how their money is being used, with 70% clearly allocated for their future home's construction. Faster refunds are also possible. If a buyer cancels their purchase, the developer will be required to refund the money from the RERA Designated Collection Account, which could speed up the process compared to previous procedures. Additionally, by ensuring funds are dedicated for construction in the Separate Account, these rules could potentially minimise delays in project completion.
The new rules also offer stronger protections. Banks will be required to prevent unauthorised access to the designated accounts, offering an extra layer of security for buyer funds. Developers will also need to disclose details of any loans taken for the project, promoting financial transparency. Finally, project completion will stop all transactions in these accounts, ensuring funds are used for their intended purpose.
MahaRERA Chairman Shri Ajoy Mehta believes these measures will build trust between homebuyers and developers. He stated, "This move is aimed at having financial discipline and transparency. Such a measure is expected to minimise potential delays in project's completion, thereby benefiting homebuyers and enhancing the real estate sector's credibility."
These new regulations come into effect on July 1st, 2024. With more transparency and protection, homebuyers in Maharashtra can have greater confidence in their real estate investments.
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