Real estate deals often involve multiple parties, but MahaRERA has brought clarity to the term “Co-Promoter” through Circular No. 32/2017, issued on May 11, 2017. This regulation ensures greater transparency and accountability in real estate projects by defining who a Co-Promoter is and what responsibilities they carry. Whether you are a homebuyer, a landowner, or an investor, this circular is essential for understanding how your interests are protected.
Who is a Co-Promoter?
According to MahaRERA, a Co-Promoter is any person who shares flats or profits with the main developer under a formal agreement. For example, if a landowner gives their land to a developer in exchange for a percentage of flats or sales revenue, they become a Co-Promoter. Similarly, an investor who contributes funds and receives a share of the built area or profits also falls under this category. This definition eliminates ambiguity and holds all parties equally accountable.
Key Financial Rules for Co-Promoters
One of the most crucial rules of this circular is that Co-Promoters cannot use funds from the main project bank account for their share. Instead, they are required to open a separate bank account where 70% of all proceeds from their flat sales are deposited. This regulation ensures that buyers’ money is used for construction and project completion, rather than diverted elsewhere.
Mandatory Agreements and Documentation
To make transactions completely transparent, Co-Promoters must sign a clear, written agreement with the main developer. This agreement must be uploaded to the MahaRERA portal when the project is registered. In addition, Co-Promoters must submit a Form B declaration, confirming they will adhere to MahaRERA’s guidelines. These measures safeguard homebuyers by making every party’s role and obligations public and verifiable.
Why This Rule Matters
MahaRERA introduced this circular to ensure that real estate deals remain fair and trustworthy. By defining Co-Promoters and their responsibilities, buyers gain confidence that their funds are being used appropriately and that all parties are held accountable. It also prevents disputes between developers, landowners, and investors by making their agreements formal and accessible.
Transparency and Buyer Protection
This circular, implemented under Regulation 38 on May 11, 2017, emphasizes transparency and fairness in real estate. Buyers can now confidently purchase properties, knowing that MahaRERA oversees every stakeholder’s financial practices. With this rule, funds remain secure, and projects stay on schedule, reducing risks for all involved.
Quick Recap of Co-Promoter Rules
To summarize:
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Co-Promoters are landowners or investors sharing flats or profits with developers.
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They must open a separate bank account for 70% of sales proceeds.
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All agreements must be registered on MahaRERA’s website.
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A Form B declaration is mandatory for Co-Promoters.
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These measures safeguard buyers and ensure fair play in real estate.
Conclusion
MahaRERA’s Circular No. 32/2017 is a game-changer in real estate regulation, promoting transparency and accountability. By clearly defining Co-Promoters, requiring formal agreements, and mandating strict financial compliance, MahaRERA has created a safer environment for buyers, developers, and investors alike. If you are involved in real estate, understanding this rule is essential for a secure and smooth transaction.
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