Clarifications on Operating Designated Rank Account

By Dr. Sanjay Chaturvedi, LLB, Ph.D.

Whereas the Chairperson. Maha RERA is vested with the powers of general superintendence and directions in the conduct of affairs of the authority under section 2S of the Real Estate (Regulation and Development) Act. 2016 (RERA).

The following clarifications are issued with respect to the withdrawal of amounts deposited in separate account:

1) The provisions of Rule 5(1)(0(b) of Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects. Registration of Real Estate Agents. Rates of Interest and Disclosures on Website) Rules. 2017applicable to new projects shall also apply mutatis mutandis to ongoing projects.

2) In Form 3 of the Maharashtra Real Estate Regulatory Authority (General) Regulations 2017:

a) All cost items should be mutually exclusive. There should not be any double counting of costs.

b) The Development Cost / Cost of Construction of the project should not include marketing and brokerage expenses towards the sale of apartments. Such expenses. though part of the project cost, should not be borne from the amount that is required to be deposited in the designated separate account.

c) In Form 3, field 100(4 only interest payable to financial institutions, scheduled banks, non-banking financial institution (NBFC) or money lenders on construction funding or money borrowed for construction should be added to total cost of construction. The principal sum should just be mentioned in the Form for information purpose. The Principal sum should not be added to the total cost of construction as this cost is already included in 1(ii) (a).

Projects already registered or applied for registration with MahaRERA before issuance of this circular, may not have factored in the above clarification while preparing estimated costs. For such projects, MahaRERA does not expect the estimated costs to be reworked. However, while reporting an incurred amount in quarterly updates, the above-mentioned considerations should be taken into account.

Credits: Landmark Judgements of RERA (Book)

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