UP-RERA Urges Homebuyers to Deposit Property Payments Only into Designated Project Accounts

Regulatory Authority Warns Buyers Against Risky Transactions, Stresses Financial Transparency in Real Estate Deals

 

By The Realty Times | Real Estate News Services

LUCKNOW: In a move aimed at protecting homebuyers and ensuring greater transparency in real estate transactions, the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has urged property buyers to exercise caution while making payments to developers. The authority has advised buyers to deposit money only into the designated collection account of the respective real estate project.

The advisory seeks to prevent potential financial irregularities and reduce the risk of homebuyers losing money by transferring funds to unauthorised accounts or following payment instructions that have not been properly verified.

Buying a home often involves substantial financial commitments, including booking amounts, instalments and other payments linked to construction milestones. UP-RERA has stressed that buyers must verify the authenticity of payment instructions and ensure that their money is deposited into the correct account associated with the registered project.

Homebuyers should avoid transferring funds to personal bank accounts, unrelated company accounts or any other account unless the payment arrangement has been officially verified and is consistent with applicable regulations and the project's authorised payment procedures.

The authority's advisory highlights the importance of financial discipline and due diligence throughout the property-buying process.

Under the Real Estate (Regulation and Development) Act, 2016, developers are required to deposit 70% of the amounts realised from allottees into a separate account in a scheduled bank. These funds are intended to cover the cost of land and construction for the respective real estate project, subject to the conditions prescribed under the law.

The regulatory framework is designed to prevent the diversion of homebuyers' money to unrelated projects or other purposes. It also seeks to improve accountability and ensure that funds collected from buyers are used in accordance with the applicable legal requirements.

By directing buyers to the designated project collection account, UP-RERA aims to reinforce these safeguards and encourage safer payment practices.

UP-RERA's advisory reinforces the importance of buyer awareness and financial transparency in property transactions. While developers have legal obligations concerning the collection and use of project funds, homebuyers also need to remain vigilant when making payments.

Before transferring money for a property, buyers should verify the project's registration, confirm the designated collection account and retain all payment records. These simple precautions can help protect their investment and reduce the likelihood of avoidable disputes.