Revolutionary Proposal by MahaRERA for Developer Accounts For Safeguarding Homebuyers

Mumbai: In a landmark move to protect homebuyers, MahaRERA has unveiled a new proposal. It mandates developers to maintain three distinct accounts in a single scheduled bank to ensure discipline, efficiency, transparency, accountability, and equity in the financial transactions of a housing project.

The proposal distinguishes between a reserve account for all incoming funds from customers, a dedicated account holding 70% of funds for land and construction costs, and a transaction account for the developer's 30% share.

Furthermore, it is proposed to legally safeguard these accounts from any external claims.

MahaRERA's Commitment to Homebuyers' Rights

MahaRERA has consistently added layers of protection for homebuyers at various levels, including the requirement for projects to have separate operational, reserve, and transaction accounts. These accounts, opened in the project's name by the developer, must be verified against MahaRERA's database by the bank.

Notably, all transactions in these accounts will cease upon the project's completion date, unless MahaRERA grants an extension. Additionally, developers cannot alter the bank accounts without prior approval from the authority. This draft has been published on MahaRERA's website, inviting suggestions, objections, and comments by April 15th to finance.suggestions2024@gmail.com

Regulating Developer Transactions for Greater Control

Currently, developers collect funds from customers for various reasons and deposit them into different accounts, making regulation challenging. The new proposal aims to streamline this by requiring all such funds, including parking and amenities fees, to be deposited into one designated account. The account number must be mentioned in the sales agreement, making it obligatory for all customer payments to be deposited into this account.

According to the Real Estate (Regulation and Development) Act 2016, at least 70% of the funds for land and construction costs must remain in the operational account, with the bank required to ensure that at least 70% of the incoming funds are transferred to the dedicated account, and a maximum of 30% to the transaction account.

MahaRERA suggests that withdrawals from these accounts should not be made through checks, online banking, credit-debit cards, or any other means. Moreover, it's mandatory for developers to mention the amount in the dedicated account during registration and sales agreement.