Over 400 builders in Gujarat are now under the regulator’s lens. GujRERA has reportedly taken strong action against them for allegedly flouting financial rules under the Real Estate (Regulation and Development) Act.
Vibes of India understands this is one of the largest regulatory crackdowns in recent years.
A close examination of filings from 2021-22 to 2023-24 revealed a troubling pattern: several developers failed to park 70% of collected booking and sale amounts in designated RERA-registered accounts.
Instead, these funds were reportedly routed elsewhere, a practice officials and sources call a “serious violation” designed to undermine the safeguards meant to secure project stability and protect homebuyers.
The notices highlight that such actions breach the terms of the Project Registration Certificate as well as core RERA provisions. But GujRERA’s concerns reportedly go beyond diverted funds.
Two other compliance lapses have been flagged. That of builders collecting advance payments exceeding 10% of the property value without signing a formal Agreement to Sell.
Secondly, there are instances where withdrawals from RERA-registered accounts went beyond the limits allowed, as certified by engineers, architects, and chartered accountants under Section 4(2)(1)(D) of the RERA Act.
Officials, according to a news report, have already begun hearings, scrutinising each case on its own merit. If the violations are found to be substantial, penalties could soar to 5% of the total project cost, underscoring the authority’s strict approach to financial compliance in real estate.
Also Read: Gujarat Housing Board Leases Prime Land Worth Rs 1,000 Crore To SAL For Only Rs 36 Lakh https://www.vibesofindia.com/gujarat-housing-board-leases-prime-land-worth-rs-1000-crore-to-sal-for-only-rs-36-lakh/
