RERA was implemented to safeguard the interest of the home buyers and to prevent the further losses due to the unregulated activities of the Builders; there are such provisions made by the legislature which will act as a catalyst to minimise or stop the mischiefs of the promoters.
Amongst all the unregulated activities, the major has been the diversion of the funds from one project to another. The diversion of funds has become the one of the prominent reason for pushing the Real Estate sector into lurch. Keeping all such factors into consideration, the RERA Act, 2016 was enacted with the intent to prevent all such nuisances.
There is a provision in the RERA Act that seventy percent of the amount realised for the Real Estate project from the allottees shall be deposited in a separate bank account in a scheduled bank to cover the cost of construction and land cost and shall be used for that purpose only; but still it seems so that builders are not complying with the RERA laws.
Lately, in the same matter, the UPRERA Authority has written to the zonal heads of all the banks to be more cautious about the maintenance of separate bank account of the Builders and asked them to follow the strict compliance of the provisions related to the maintenance of such account.
The officials said that it has come to the notice of the RERA Authority that many builders are not complying with the provisions and withdrawing the money from the bank account without submitting the requisite documents. Moreover, it has also come to the notice of the authority that few of the banks which have disbursed the loan to the developers adjusting the amount deposited against the outstanding loan amount instead of the purposes as defined in the act.
Looking into the severity of the matter, the RERA Authority has asked the banks to issue necessary directions to all the officials of the Banks to strictly comply with the provisions. It has also been clarified that if the banks keep on doing this then this matter will be placed before the Chairman of the respective banks and the secretary of the banking department of the Government of India.
At last, it can clearly be seen that the RERA Authorities are very much vigilant about the adherence of the RERA provisions. And if builders try to escape with their obligations then authority is going to take strict action against them.