MahaRERA Mandates Three Bank Accounts for Real Estate Projects
The Maharashtra Real Estate Regulatory Authority (MahaRERA) announced a new directive on June 27, mandating that, effective from July 1, real estate developers must open three separate bank accounts for each project within a single bank. This move aims to ensure financial discipline and the timely completion of projects by preventing the diversion of funds.
Under the new guidelines, developers must use the first account to deposit amounts received from homebuyers. The second account will be an escrow account, holding 70% of the funds to be allocated for project expenses. The third account will manage the remaining 30% of the funds. This structure is designed to provide clearer financial tracking and greater security for the homebuyers' investments.
MahaRERA's decision followed extensive consultations with various stakeholders and echoes a similar directive issued by the Uttar Pradesh Real Estate Regulatory Authority (UPRERA) in December 2023, which also required developers to maintain three designated bank accounts. Both regulations aim to enhance the confidence of flat purchasers and improve the credibility of the real estate sector.
Currently, MahaRERA requires developers to maintain a single designated account for every project, holding 70% of the total project cost in an escrow account. However, it has been observed that some developers have been asking homebuyers to deposit funds into separate accounts for various purposes, such as booking fees and payments for amenities. The new directive seeks to streamline these processes and provide better financial oversight.
Moreover, the RERA designated collection account and RERA Designated Separate Account will receive legal protection from attachment by government agencies, further securing the funds meant for project completion. This measure is expected to significantly boost customer confidence and improve the overall customer experience in the real estate sector.
By introducing these separate accounts, MahaRERA aims to ensure that funds are used appropriately for project development, thereby safeguarding the interests of homebuyers and promoting financial transparency within the industry.
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