Mumbai: Developers must now provide a declaration of bank details for projects registered with the Maharashtra Real Estate Regulatory Authority (MahaRERA), according to a notification issued by the regulatory body earlier this month.
The notification, signed by the MahaRERA secretary, and chairperson, MahaRERA Conciliation Forum, Vasant Prabhu, states: “Every promoter at the time of registration of a real estate project in addition to providing the bank details of the separate bank account in the application for registration shall provide a Declaration about the separate bank account for the real estate project on the Letterhead of the promoter in the manner of given format.”
The intent is to ensure that there is complete compliance with the provisions of the Act, the rules and regulations made by RERA.
The notification has directed that this separate bank account should be an exclusive, a no-lien bank account and the amounts deposited and withdrawn from this bank account should be in consonance and in compliance with Section 4 (2)(1)(D) of the Act, Rule 5 of the Rules, Regulation 3 of the Regulations, as well as the Orders and Circulars of MahaRERA.
Under this provision, a developer undertaking a real estate project with borrowed money must deposit the amount in the account and use it for that particular project only. This is to ensure that the project is completed in a time-bound manner and the money of the homebuyers is protected.
Anand Gupta, chairperson, Housing and RERA Committee of the Builders Association of India (BAI), said the move would bring more transparency and was welcome.
“Slowly and steadily, MahaRERA is bringing regulations in the real-estate sector. Asking developers to give declaration of bank details account is an audit and a check on how these funds are being utilised in a project,” he said.
He added that this would help the MahaRERA to pull up those developers against whom complaints were being made by homebuyers. “They can get the bank statements and take action as per,” he informed.
The chairman of the Maharashtra Societies Welfare Association (MahaSeWA), Ramesh Prabhu, said that this notification would stop banks from encroaching on developers’ accounts with the lender banks.
He explained, “If a builder takes a loan from a particular bank, the bank, in turn, asks them to open an account. So, whenever the buyers’ money is deposited in this account, the bank will deduct the loan instalment. This prevents the developer from using the money for the project. This will stop now, as developers will now have a separate account where the allottees’ money can be deposited along with the loan borrowed.”
This separate account of the registered real estate project will not have any encumbrance with the bank, he added.
Practising advocate Sharad Koli said that 60-70 per cent of money laundering cases were related to developers.
“This MahaRERA notification, asking developers to give a declaration of bank account details, will definitely bring a change. I believe money laundering will be curtailed to some extent, as buyers will know the position of the developer in the project they are planning to buy a house etc.,” he stated.
Currently, only 26 per cent of the more than 36,000 projects registered with the MahaRERA, have been completed, some are in the process of completion while the deadline for others has lapsed.
The Free Press Journal had recently reported that the MahaRERA was taking various steps to protect the interests of homebuyers and reduce the number of litigations it had.
MahaRERA Chairman Ajoy Mehta had then been quoted as saying that by putting out maximum information in the public domain, the MahaRERA wanted to create awareness and inform buyers to enable them to decide wisely.
