On Wednesday, the Maharashtra Real Estate Regulatory Authority (RERA) issued an order stating builders cannot use the money deposited for anything other than the construction of the building.
The state government has clarified that builders cannot include the cost incurred for marketing of a project and brokerage paid for the sale of an apartment in the construction cost of an apartment. As per the rules, every builder has to deposit 70 per cent of the total project cost in the bank, which can be used only for construction of the project.
On Wednesday, the Maharashtra Real Estate Regulatory Authority (RERA) issued an order stating builders cannot use the money deposited for anything other than the construction of the building.
Dr Sanjay Chaturvedi, an expert on RERA, said, "According to the new rules, a builder has to deposit 70 per cent of the total project cost in the bank. This money is protection in case the building remains incomplete; this money can then be used for the construction of the building. This will safeguard the interest of the home buyers."
However, builders claim that there is ambiguity in this order as it considers marketing and brokerage as part of the project cost.
"On one hand the order states that marketing and brokerage are part of the project cost while on the other it doesn't allow the money from deposits to be used for it," said a builder on condition of anonymity.
Every builder who has an ongoing project in the state and doesn't have an occupation certificate has to be registered with the MahaRERA.
Earlier last week, MahaRERA had issued another order clarifying what carpet area will include. As per the new order, balcony and other dry areas are not part of carpet area anymore.
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