Mumbai: MahaRERA Proposes Three Bank Accounts to Avoid Real Estate Fraud

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has proposed three separate bank accounts—'Collection Account', 'Separate Account', and 'Transaction Account'—in a scheduled bank to safeguard consumer interests, ensure compliance, and promote transparency, accountability, and financial discipline.

According to MahaRERA, the object of this proposed direction is to uniformly operate and maintain the project's bank accounts and standardise the legitimate use of funds deposited in separate bank accounts. 

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Dedicated Bank Accounts

Collection Account' for all funds received from customers, Separate Account' for 70% of project, land and construction expenses, Transaction Account' for the balance 30% of the developer's funds.

A separate bank account would be in which 70% of the amounts realised for the project from the allottees received in the collection account would be deposited in a separate account to be maintained in a scheduled bank. The deposited amount in this account should solely be utilised to cover the cost of construction and the land cost as prescribed in Rule 5 of the Maharashtra Real Estate (Regulation and Development) Rules.

As per the discussion paper, promoters should open three bank accounts in a single scheduled bank before applying for the project. It includes a collection account, a separate account and a transaction account for the project. A collection account is an account to be maintained by the promoter to receive all the collections from the allottees, including parking, amenities, and any other charges, excluding all other taxes and statutory duties.

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Further, MahaRERA clarifies that these accounts should be free from all encumbrances and should not be escrow accounts and free from LIEN, loans, and third-party control, i.e lender,  bank or financial institution and cannot be attached by any other government authority or body unless any direction is issued from the authority.