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The real estate industry in India has been subject to several controversies over the years, including delayed projects, fraud, and mismanagement of funds. In 2016, the Indian government passed the Real Estate (Regulation & Development) Act, also known as RERA, to address some of these issues and promote transparency in the industry. The act aims to regulate the real estate sector by establishing guidelines for property developers and providing a platform for consumers to seek redressal for grievances.
Under the RERA Act, every project registered with the regulator must have a separate designated bank account. This provision is meant to ensure that funds meant for a particular project are not diverted elsewhere. However, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has discovered that more than 1,700 projects in the state have violated this rule by linking their designated bank accounts with multiple projects.
As part of a recent independent investigation, the Maharashtra Real Estate Regulatory Authority (MahaRERA) discovered over 1,700 cases where the same designated bank account details can be linked to multiple projects, a clear violation of the RERA Act 2016. The regulator has issued notices to forty-five projects and plans to send more in the coming days. The notices seek details of the total units in each project, units sold, receipts, and withdrawals from the bank account. The notice also seeks a formal explanation for why the same bank account details have been used for multiple projects.
The regulator's actions indicate a commitment to upholding the integrity of the RERA Act and promoting transparency in real estate transactions. Experts suggest that the regulator should set up a mechanism to ensure that each project has a dedicated account and that funds are not used for other projects. Having one account for various projects defeats the purpose of the act, which is to prevent fund misuse.
The real estate sector in India has been plagued with several issues, including fraud and delayed projects. The RERA Act was enacted to address these problems by providing a regulatory framework for the industry. The act mandates that every project registered with the regulator must have a separate designated bank account. This provision is crucial for ensuring that funds meant for a particular project are not diverted elsewhere.
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