The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has laid out clear rules for how money in real estate projects should be handled. These rules aim to protect buyers and make sure funds are used properly under the RERA Act.
Here are the key points
- Promoters can’t use the project’s bank account for anything other than the project itself. No interest, penalties, or assured returns are allowed from this account.
- Sanjay Bhoosreddy, chairman of UP-RERA, stressed the importance of showing three project accounts on the U.P. RERA website. This helps track money flow and ensures projects are finished on time. Breaking these rules will lead to hefty penalties.
- Each project must have a collection account for getting payments from buyers. Promoters must tell buyers about this account in ads, letters, and agreements.
- Promoters must set up automatic transfers: 70 percent goes to a separate account, and only 30 percent goes to another account for transactions.
- Details of these three accounts must be given when registering the project. Money from the separate account can only be used for land, construction, and project development. Promoters can pay regular interest on loans but not penalties or interest to buyers.
- All loan amounts for the project must go into the separate account. Money can’t be withdrawn without proof from experts, and it can’t be more than the actual work cost.
- In special cases, UP-RERA will be extra careful. Promoters must put all funds from buyers and loans into the separate account. Buyers must be told to pay only into this account.