AHMEDABAD: The Gujarat Real Estate Regulatory Authority (GujRERA ) has levied penalties totalling about Rs 3.5 crore on developers for breaching norms related to RERA-mandated bank accounts, intensifying regulatory action against builders who failed to deposit homebuyer funds as required under the Real Estate (Regulation and Development) Act, 2016.
As part of a recent enforcement exercise, GujRERA issued orders in eight suo motu cases and imposed fines ranging from Rs 95,000 to Rs 2 crore. The strictest action was taken against a Surat-based promoter, who was penalized Rs 2 crore for violations linked to mandatory fund-deposit provisions under the Act.
The move is being seen as one of the clearest indications yet that the regulator is tightening oversight of project funds and will act firmly against departures from statutory norms. Officials said GujRERA has begun proceeding against both types of violations – non-deposit of the stipulated share of collections into designated RERA accounts and withdrawals exceeding the limits allowed under the rules.
Under RERA regulations, every registered real estate project is required to maintain a separate designated bank account with a scheduled bank. Seventy per cent of the amount collected from allottees must be deposited in this account and used exclusively for land and construction expenses of the respective project. Withdrawals are permitted only in proportion to the stage of project completion and must be certified by an engineer, an architect, and a chartered accountant.
Officials said the latest penalties followed a scrutiny of financial statements submitted by promoters. The regulator examined whether buyer collections were routed through the designated account and whether withdrawals were aligned with the actual progress of construction.
“A detailed examination of builders’ financial data has been carried out, and based on the findings, suo motu proceedings have been initiated against hundreds of promoters for violations of RERA-designated bank account norms,” a senior GujRERA official said. “The authority is adopting a strict approach to both deposit defaults and excess withdrawals as these provisions are crucial for safeguarding homebuyers’ funds and ensuring money is utilized solely for project development,” the official added.
The official said the regulator is focused on strengthening financial discipline within the sector and preventing diversion of funds collected from buyers. The designated account mechanism is regarded as a key safeguard under RERA to ensure that money raised for a specific project is not diverted to other purposes or developments.
Recent orders indicate that GujRERA is expanding the scope of its compliance checks and could initiate additional proceedings in the months ahead. With financial records of numerous developers already under examination, more builders may face action if irregularities are detected in deposits or withdrawals connected to registered projects.
The ongoing crackdown is expected to send a strong signal to Gujarat’s real estate sector that violations of project fund management rules will invite financial penalties and heightened regulatory scrutiny, a RERA consultant said.
