Mumbai: With a view to making builders accountable for the money they receive from buyers, the RERA has laid down strict norms, which include maintaining separate accounts for receiving payments at different stages of the project to ensure the builder does not siphon off or squander the amount received from the buyers.
According to an affidavit filed in the Bombay high court by Sailesh Jogani, under secretary, ministry of housing and urban affairs, on behalf of the Government of India, RERA has aimed to restrain developers and builders from misusing and diverting funds they collected from buyers for an ongoing project for another project.
With a view to address this, the affidavit reads, “Mandatory deposit of 70 per cent of customer receivables in separate accounts towards construction cost and land cost. This would ensure due and timely completion of real estate projects and prevent the current malpractice, whereby real estate projects are delayed for several years to the prejudice of flat purchasers.”It further says RERA has tried to bring in equity in the rate of interest charged by developers from consumers for late payments and has said the developer would have to pay a similar rate of interest to buyers for delayed projects. It reads, “The Act is an attempt to frame rules and regulations for regulating transactions between buyers and builders in real estate.”
According to a lawyer appearing in the case, with builders having to maintain separate accounts for different stages of the project, banks have become wary and are demanding the project be first registered with the RERA regulator, or, as stipulated by the RERA Act, before they get into a subvention agreement with the buyer and developer.
“It is a good rule as it will ensure that each project is considered as a standalone project and developers cannot divert funds of one project to another.
