In a recent move, the Haryana Real Estate Regulatory Authority (HARERA), Gurugram, has issued a stern advisory to banks operating within the city, emphasizing the imperative need to adhere to the stipulations outlined in the Real Estate (Regulation and Development) Act, 2016. The directive comes in response to alarming observations indicating non-compliance by real estate promoters regarding fund withdrawals from RERA accounts.
As delineated in Section 4(2)(I)(D) of the RERA Act, developers are mandated to maintain distinct bank accounts for each project, with 70% of the funds collected from allottees earmarked for deposit. These funds are strictly designated for land acquisition and construction expenses, ensuring transparency and preventing diversion for unrelated purposes.
Furthermore, withdrawals from these segregated accounts necessitate certification from qualified professionals—engineers, architects, and practicing chartered accountants—validating that the withdrawn amount aligns proportionately with the project’s construction progress. Despite these clear provisions, instances of non-compliance persist, with banks facilitating fund withdrawals without requisite certifications, constituting a blatant violation of RERA regulations.
In light of such infractions, HARERA has underscored the accountability of banks in ensuring compliance with RERA provisions. Failure to uphold these standards may result in penalties of up to 5% of the project cost, as stipulated under Section 4 of the Real Estate (Regulation and Development) Act.
The advisory serves as a reminder to banks of their role in upholding regulatory integrity within the real estate sector. Stringent monitoring mechanisms must be implemented to scrutinize fund withdrawals, thereby mitigating the risk of non-compliance and potential legal ramifications.
It’s imperative for developers to obtain separate registrations for each phase of a project, necessitating the maintenance of distinct bank accounts. By adhering to these protocols, stakeholders can uphold transparency and accountability, fostering trust and stability within the real estate landscape.