Real Estate Fund Withdrawals
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Ensuring financial discipline and transparency in housing projects is crucial for safeguarding the interests of homebuyers. Recognizing this, the Maharashtra Real Estate Regulatory Authority (Maharera) has proposed a revolutionary measure to streamline financial affairs through the establishment of centralized bank accounts. This proposal aims to enhance compliance, efficiency, transparency, and accountability in the real estate sector, ultimately bolstering consumer protection.

Maharera’s Proposal: Centralized Bank Accounts Maharera’s consultation paper outlines the implementation of three distinct accounts within a single scheduled bank: Circulation Account, Separate Account, and Transaction Account. These accounts, opened in the name of both the developer and the project, are designed to streamline financial operations and ensure uniformity in fund management.

Key Components of the Proposal:

  1. Circulation Account: All funds collected from customers, excluding government taxes and charges, will be deposited into this account. The account number must be mentioned in the sale agreement, and developers are mandated to deposit all proceeds from homebuyers exclusively into this account.
  2. Separate Account: Minimum 70% of the project’s land and construction costs will be maintained in this account as per regulatory provisions. Developers must transfer 70% of funds received from homebuyers from the Circulation Account to the Separate Account, with clear instructions to the bank for restricted withdrawals.
  3. Transaction Account: This account will be used for project-related expenses other than land and construction. Developers will manage project finances through this account, ensuring transparency and accountability.

Legal Safeguards and Consumer Protection: To protect consumer interests, Maharera’s proposal includes stringent legal safeguards. No system interference is permitted in savings and segregated accounts, ensuring the security of homebuyers’ funds. Additionally, developers are required to disclose creditor details and mortgage information, promoting transparency in project financing.

Engagement and Feedback: Maharera has encouraged stakeholders to provide suggestions, objections, and opinions on the proposal through its website. By fostering engagement and collaboration, Maharera aims to create a robust regulatory framework that addresses industry challenges and prioritizes consumer welfare.

Ensuring Bank Responsibility: Maharera’s proposal also outlines clear instructions for banks, emphasizing their responsibility in managing project accounts. Banks must notify developers and Maharera upon opening accounts and ensure adherence to prescribed procedures for fund disbursement and account security.

Conclusion: Maharera’s proposal for centralized bank accounts in housing projects represents a significant step towards enhancing transparency, accountability, and consumer protection in the real estate sector. By streamlining financial operations and implementing stringent safeguards, this initiative aims to instill confidence among homebuyers and promote a culture of trust and integrity in the industry.

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