21 Aug 2024
An update on the Maharashtra Real Estate Regulatory Authority’s recent directions, which will apply to all transactions relating to development, financing, project transfers, or variations in project bank accounts for projects registered with it.
On 27 June 2024, the Maharashtra Real Estate Regulatory Authority (MahaRERA) issued a detailed set of directions on the maintenance and operation of separate bank accounts for real estate projects registered with MahaRERA (Project). Effective from 1 July 2024, these directions aim to enhance transparency, accountability, and financial discipline of the promoters, ensure proper utilisation of Project funds and protect homebuyers’ interests in respect of the Projects.
The directions mandate every promoter of the Projects to open the following three bank accounts in a single scheduled bank for depositing monies received from the allottees:
a. Real Estate Regulatory Authority (RERA) Designated Collection Bank Account (100% of the amount realised from the allottees) (Collection Account);
b. RERA Designated Separate Bank Account (70% of such realised amounts) (Separate Account); and
c. RERA Designated Transaction Bank Account (30% of such realised amounts) (Transaction Account).
Where there are multiple promoters with a revenue share arrangement, the designated promoter (as agreed under separate contractual or legal arrangements) must open a RERA Designated Master Bank Account (Master Account) to collect monies from the allottees, which would then be transferred to the Collection Accounts of each promoter (through auto-sweep facility) as per their respective shares in the revenue, and further bifurcated into their respective Separate Account (70%) and Transaction Account (30%). Accordingly, in the case of multiple promoters with revenue share arrangements, multiple layers of bank accounts will have to be opened, operated and maintained by each promoter. The proposed mechanism for all Project bank accounts in such instances will be as below.
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