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Property Related Laws Karnataka Ministry of Housing and Urban Affairs Real Estate (Regulation and Development) Act, 2016

The Karnataka Real Estate Regulation Authority has issued a Notification regarding mandatory deposit of money into RERA project

19-Jul-2023 | No: RERA Accounts 021 C.R\ 2019-20

The Karnataka Real Estate Regulation Authority has issued a Notification regarding mandatory deposit of money into RERA project designated bank account borrowed by the promoter by mortgage of the project land and utilisation for the same project development purposes.

By virtue of the Notification, the following directions are issued in the interest of the promoters, project, allottees, lenders ,namely :

1. That the promoter of the project shall deposit the entire amount borrowed for the purpose of the project into the designated account of the project and the money so deposited shall be utilized and withdrawn only for the purpose of the development of the respective project.

2. In case the promoter borrows the money for the project and registered the project phase wise as per explanation to section 3(2) of the Act, the promoter shall bifurcate and apportion the amount towards various phases and report the same during the quarterly updates along with the Bank Statement or Chartered Accountants Certificate by way of Annexure.

3. The lenders/bankers/financial institutions shall also ensure to disburse such loans only to the designated RERA account of the project. Such designated RERA account details are published and available in the RERA website for each registered RERA projects.

4. In case of the existing projects, where in the promoters have borrowed money for the purpose of the project and not utilised any portion of such money to the respective project shall deposit the unutilised portion of money into the designated RERA account within 3 months from the date of this notification.

Further, the authority may call for any information or documents from the promoters by issuing a notice in order to enforce this notification.

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