UP RERA asks builders to maintain three bank accounts for a project
Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has made three bank accounts mandatory for real estate projects in the state.
The authority has issued detailed directions revising its previous directions to ensure protection of the consumers and utilization of funds strictly as per RERA Act as a guarantee for completion of projects.
UP RERA has prohibited promoters from creating lien on the separate account of the project, further prohibiting them from paying any interest or penalty or assured return from this account.
Every project will have a collection account for taking payments from allottees and the promoter must disclose this account in its advertisements, in the allotment letter, agreement for sale and all communications with the allottees.
The promoter will have to provide standing instructions to the bank for auto-sweep of not less than 70% of the amount from the collection account to the separate account and not more than 30% to the transaction account of the project.
The promoter will have to submit the particulars of the three bank accounts- collection account, the separate account and the transaction account with registration application of the project.
The money from the separate account can be used only for payment of the cost of land, construction and development of the project. The promoter can pay normal interest against the project loans but no penal or compound interest or interest and compensation payable to the allottees.
“The disclosure of three accounts by the promoter on the web portal of UP RERA and proper utilization of funds, more particularly of the funds deposited in the separate bank account of the project, will take care of the time bound completion of the project and the
