In a significant move to safeguard homebuyers, the Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has put out on public display the account details of 937 under-construction projects that are registered with it. The action is aimed at educating the buyers about the amount of money collected by real estate promoters and ensuring that such funds are utilized for construction.
Recent findings by UPRERA revealed cases in which promoters did not debit the amounts received as allotments from allottees to the necessary collection accounts, but rather debited them into improper accounts. This practice is extremely problematic with regards to fund misappropriation intended for project development.
Legal action awaits violators of these rules, especially if homebuyers’ money is in unapproved accounts. UPRERA reiterated that this is a blatant contravention of RERA provisions, which are legally enforceable. “U.P. RERA is filing separate legal proceedings against such cases,” the authority said.
For greater transparency in the real estate sector, UPRERA has also published these account details on its website. These include the promoter’s name, project name, date of completion and registration, collection account number, bank name, and IFSC code. It also provides information about the number of projects dealt with by each promoter and complaints lodged against them.
According to the Real Estate (Regulation and Development) Act, 2016 mandate, real estate developers are required to maintain an Escrow account and ensure that 70% of the funds they receive to develop their projects are kept in a separate account dedicated to project construction only. UPRERA has directed banks to automatically credit 70% of the collection account amount into this separate account while allowing 30% to be transferred to a transaction account for operational expenses. Withdrawal from the separate account is possible only in proportion to the work done, as certified by capable professionals.
According to regulations set on November 29, 2023, promoters need to submit details of three accounts of the project—Collection, Separate, and Transaction—on the UPRERA portal. This is a legal requirement, which also means including the project’s collection account details in all promotional materials.
UPRERA has stressed the importance of this transparency campaign, declaring that the campaign is to prevent diversion of funds and make payments in authorized accounts alone. Sanjay R. Bhoosreddy, chairman of UPRERA, appealed to the promoters and homebuyers to verify project details on the UPRERA portal prior to investing.
“Early project completion not only enhances the promoters’ credibility but also makes the dream of home ownership a reality for customers,” Bhoosreddy said. He reaffirmed that strict legal action will be initiated against any violation of these provisions, particularly unauthorized deposits into accounts.”.
Out of 937 projects that are ongoing and listed with UPRERA, most of them are in Ghaziabad, Lucknow, Gautam Buddh Nagar, Agra, and Mathura, reflecting the government’s desire to ensure accountability in the real estate sector.
