Developers can’t use buyers’ funds to repay loans

Developers should not repay loans taken from banks and financial institutions by using 70% of the total amount collected from buyers and allottees of a project in escrow accounts, both HRera and UPRera have ordered. This amount is meant to complete construction of the project and meet the land cost, the regulatory authorities said. In a case in Gurgaon, the local bench of HRera has directed the police commissioner to register a criminal case against Indiabulls Housing Finance Limited, Industrial Finance Corporation of India Limited and PNB Housing Finance Limited for using money from the 70% of the amount collected from buyers and allottees, which it said should be used to complete construction of the project as per the Rera Act.