Editor: Shivalik Institute of Real Estate (SIRE)
The Gujarat Real Estate Regulatory Authority (RERA) has issued an order requiring builders to open project-linked bank accounts within the state of Gujarat. This move is aimed at improving transparency and protecting the interests of homebuyers in real estate projects.
According to Gujarat RERA, developers must now open and operate a designated bank account for each project within a bank located in Gujarat. The purpose of this requirement is to ensure that the funds collected from homebuyers are used solely for the specific project they are intended for, thus safeguarding customer investments and preventing the diversion of funds.
RERA mandates that 70% of the funds collected from buyers for a particular real estate project must be deposited in this project-linked account. These funds can only be withdrawn in proportion to the completion of the project and require certification from the architect, engineer, and chartered accountant involved in the project.
By enforcing that these accounts are situated within Gujarat, RERA aims to enhance its monitoring capabilities, ensuring that funds are utilized as per regulatory guidelines. The new order aims to address the concerns of homebuyers who often face delays or issues due to the mismanagement of funds by developers.
Ensuring that funds remain within state jurisdiction will also facilitate closer scrutiny and more straightforward redressal processes in case of disputes. This measure is expected to boost buyer confidence in the state's real estate market and ensure greater accountability among developers.
Builders have been instructed to comply with this order immediately, and failure to do so could result in penalties or other regulatory actions by Gujarat RERA. This initiative is a significant step towards enhancing transparency and fostering trust in the real estate sector.
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