Maintain separate bank account for project, UP RERA to developers

New Delhi: The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued fresh directives asking developers to open separate bank accounts for every project and deposit money collected from buyers in that. The fresh directions came after authority received complaints from the allottees that some of the promoters have not maintained the separate bank account as required by the Act.

The authority has further discovered the instances of diversion of the money collected from the allottees for expenditures and activities not related to the project.

As per the fresh directives, promoters, while applying for the registration of the project with RERA, will have to submit an affidavit with a copy of the bank statement of the account.

RERA has asked developers to ensure that all the money collected from the allottees from time to time, after deducting the GST, shall be deposited in this account. The promoter shall deposit hundred percent of project finance availed from any financial/lending institution in the separate bank account.

The promoter is also asked to utilize the 70% of the amount collected from the allottees for the construction and cost of land only. Entire amount of the project finance has to be utilized for the construction and development work only.

The promoter is allowed to use not more than 30% of the amount collected for other than construction and land cost of the project.

To create awareness about the same and other real estate issues, UP RERA has been holding virtually workshops for the developer. Recently, it conducted an virtual workshop for the real estate developers of Varanasi.

“The virtual workshops is an attempt to sensitize the promoters of different region about the duties of a promoter, the project registration check list, the project extension process, separate project account and many more important points which every promoter should keep in mind. We will have different workshops dedicated to promoters of a particular region of the state for their capacity building,” UP RERA chairman Rajive Kumar said.

The two hours long workshop’s objective was to highlight the duties and obligations of a promoter, the project registration aspects, project registration process flow, the benefits of project registration, separate project account and many more critical parameters of UP RERA.

“With a view to resume the hearing of the cases, the authority also initiated the virtual hearing from May 18 onwards. We are getting positive response as complainants find it very convenient to participate in terms of safety and time saving from commuting,” Kumar added.

The workshop was conducted in two parts. In the first part, the promoters were informed and made aware about the objectives of the RERA Act, the applicability of RERA, the important duties of promoter and about the timely project compliances.

The second part was consisting of technical aspects of project registration such as process flow, checklist and dimensions.