MahaRERA upgrades software to prevent builders from using designated bank account for multiple projects

This step was taken after MahaRERA found 1,781 projects where the same/common designated bank account has been linked with multiple real estate projects. Under the MahaRERA Act, there is a provision that every registered project should have a separate designated bank account in compliance with section 4(2) (l) (d).

However, it was found that several projects violated the RERA norms, said an official of the Authority. For every real estate development project, the concerned builder needs to create a designated scheduled bank account separately.

MahaRERA has also issued show-cause notices to 1,781 project developers, asking them why the same bank details were updated for multiple projects. Additionally, builders will also have to submit for each of the projects figures on the total units and units sold, as well as receipts and withdrawal details.

“Post review of the reply of show-cause notice along with supporting documentation as requested above, hearings are being held and appropriate actions as deemed fit are taken,” said the MahaRERA official.

The developers have to maintain the designated bank accounts as 70 per cent of the amount realised for the real estate project from home buyers, from time to time, needs to be deposited in the bank account, to cover the cost of construction and the land cost. The amount can only be used for that purpose.

The designated bank account helps MahaRERA track the progress of the project and carry out effective monitoring, allowing it further to make informed decisions about project risks, corrective actions and project advancement. Recently, MahaRERA has also made it mandatory for builders to take prior permission in case of change or transfer of bank account, ensuring that the homebuyers’ money remains secure and money is only used for that particular registered project with which it is linked.