To improve the home-buying process, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has proposed new banking guidelines. The draft guidelines suggest maintaining three separate bank accounts in the same bank for real estate projects.
The proposed system includes a collection account, a separate account, and a transaction account. These accounts will make sure that there is transparency, efficiency, and accountability in the home-buying process.
Until now, developers have been using a single account for all transactions. This has made it difficult to maintain finances and has complicated supervision.
The collection account will hold all revenue from the allottees. Seventy percent of this revenue will be transferred to a separate account. That account will cover costs like land, building, loan interest, refunds, and buyer's compensation. The remaining thirty percent will go into the transaction account for other expenses. This includes expenses like the cancellation of any reservations. The developer will deduct the minimum amount of thirty percent that must be given to the allottees.
The bank will ensure that funds are not withdrawn from the collection account through conventional channels. Instead, an auto-sweep feature will be used. The developer and project names must be associated with these accounts. Banks will need to verify all information provided on the MahaRERA website.
The maintained bank accounts should be free of all burdens, like loans, etc. They should not be used as escrow accounts or be subject to loans, liens, or third-party control. It cannot be linked to any other government entity either.
MahaRERA has invited feedback on the draft guidelines until April 15. Stakeholders can send their opinions, recommendations, and objections to finance.suggestions2024@gmail.com.
Developers will need to include information about the collection account in all correspondence with homebuyers. They must also submit updated completion certificates approved by project accountants.
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