AHMEDABAD: The Gujarat Real Estate Regulatory Authority (GujRERA) has imposed penalties totaling approximately ₹3.5 crore on developers for violating regulations pertaining to RERA-mandated bank accounts. This regulatory action aims to address builders who did not deposit homebuyer funds as stipulated under the Real Estate (Regulation and Development) Act of 2016.
In a recent enforcement initiative, GujRERA issued orders in eight suo motu cases, with fines ranging from ₹95,000 to ₹2 crore. The highest penalty of ₹2 crore was levied against a promoter based in Surat for violations associated with mandatory fund-deposit requirements outlined in the Act.
This move signals the regulator’s intensified scrutiny of project funds and its commitment to act decisively against any deviations from statutory standards. Officials stated that GujRERA is addressing both types of violations—failure to deposit the required share of collections into designated RERA accounts and unauthorized withdrawals exceeding permissible limits.
According to RERA regulations, every registered real estate project must maintain a separate designated bank account with a recognized bank. Seventy percent of the total amount collected from allottees should be deposited into this account, which can be used exclusively for land and construction expenses for the specific project. Withdrawals are permitted only in accordance with the project’s completion stages and must be certified by an engineer, architect, and chartered accountant.
Officials indicated that the recent penalties followed a thorough review of the financial statements submitted by promoters. This examination assessed whether buyer collections were directed through the designated account and if withdrawals aligned with actual construction progress.
A senior GujRERA official remarked, “We’ve conducted a detailed examination of builders’ financial data and initiated suo motu proceedings against hundreds of promoters for breaching the norms for RERA-designated bank accounts. The authority is taking a stringent stance on deposit defaults and excessive withdrawals, as these provisions are crucial for protecting homebuyers’ funds and ensuring that money is utilized solely for project development.”
The official noted that the regulator is committed to enhancing financial discipline within the sector and preventing the diversion of funds collected from buyers. The designated account mechanism is viewed as a vital safeguard under RERA to ensure that funds raised for a specific project aren’t misused for other developments.
Recent orders indicate that GujRERA is expanding its compliance checks and may initiate further proceedings in the upcoming months. With many developers’ financial records under scrutiny, additional builders could face repercussions if discrepancies are found in the deposits or withdrawals linked to registered projects.
This ongoing crackdown is expected to deliver a strong message to Gujarat’s real estate sector that violations of project fund management rules will result in financial penalties and increased regulatory oversight, according to a RERA consultant.
