COMPLIANCES UNDER RERA POST REGISTRATION AND QUARTERLY UPDATES UNDER RERA

by CA.Vinay Thyagaraj

(written by CA Vinay Thyagaraj, partner M/s. Venu & Vinay, Chartered Accountants, Bengaluru)

Every promoter after registration of their Real Estate project under RERA, shall update on the RERA Authority website complete details of the project including list of number and types of apartments or plots, booked, no of garages booked, list of approvals taken and the approvals, NOC obtained and development, construction status, Including Photos of stage of development, pending litigations and status of the same as per Sec 11(e) of RERA Act and Rule 15(D) of Karnataka RERA Rules 2017

1. In addition to above, Promoter shall obtain and update the quarterly certificates received from professionals viz., CA’s, Engineer, Architects certifying the
a. status of development work completed (percentage of completion of project),

b. money collected from the Allottees, money spent on project, eligible funds to withdraw from RERA project bank account based on % of completion of development of the project as per Sec 4(2)(l)(D) of the Act –

i. Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project

2. These Quarterly updates will help the buyers / Allottees to know the status of development of project from time to time. It will act as guidance for new buyers to check the movement of units in the project from quarter to quarter before they invest into the project. Buyers can know –

a. Status of development / Construction work of the project

i. Sub Structure

ii. Structure

iii. Common Area development

iv. Equipment Fixtures and fittings

v. Amenities and Facilities development

b. no of units sold / booked

c. no of parking allotted

d. status of various permissions / NoC’s

e. Litigations and status of litigations on the Project Land

f. Modification of plan etc.,

g. Formation of Association

h. Over all Percentage of Completion of construction of project

i. Amount collected from the Allottees

j. Amount incurred towards the project

k. any other information as may be required to publish

3. It is important to note that in order to provide the details the following department in the promoter organisation shall involve providing the accurate data –

a. Management details

b. Planning and Operation – Schedule of beginning and end date of each activities

c. Marketing – Brochures and Agent details

d. Sales / CRM – Bookings and allotment details

e. Accounts and Finance – Amount collected and incurred details

f. Legal – Pending / litigation on the project land

g. Liaison department for various approvals – various approvals, NOC’s, modifications

4. RERA Authorities can know the development activity of the project apart from % of completion of project from time to time.

5. These updates / filings shall be made till promoter complete all the construction and development in the project as per agreement for sale, brochures, and marketing materials.

6. Submit Occupancy Certificate at the end of the project having completed all development work as promised / committed

7. The quarterly update is mandatory as per Act and Rules, failing which authority may levy penalty as per Sec 60 of the RERD Act, which may extend upto 5 % of estimate cost of the real estate project

8. In the State of Karnataka, promoter shall submit the post registration once they receive the registration certificate from the RERA Authority. These details required to submit to the Authority are important, vital and requires accurate data / information. As these information or documents will be publicly available to Home Buyers, lenders, bankers and they may rely on this information to decide on investment or lending etc.,

9. At broader level following information, documents, details shall be uploaded

a. Promoter Details – KYC

b. Authorised signatory for the Project and his / her KYC

c. Project Development Details, Schedule of timelines of beginning and end date

d. Sanctions / NOC’s availed with the dates

e. Litigations pending on the project land

f. Brochures / advertisement with RERA Registration No as per Sec 11 and as per guidelines issued by RERA Authorities

g. RERA registered Agent Details with their RERA Agent Registrations

h. Company member details in case of Company

i. Project Schedule – of all development activities

j. Project Cost Details (including TDR)

k. Break up of estimated cost and incurred cost towards Sanction plan, approvals, NOC’s etc

l. Break up of Estimated cost of constriction of the Real Estate Project

m. Designated bank account No and details

n. Professional Certificates of CA’s Engineers and Architect certifying the Estimate Cost of the Project in Form No 1, Form No 2 and Form No 3

10. CA’s, Engineer, Architects Professionals play a prominent role under RERA. All promoters shall obtain from these 3 professional’s certificates from time to time to withdraw the money from the project Bank Account based on % of development of the project.

(a) the architect shall certify that the physical condition at the site is built as per the sanctioned plan;

(b) the engineer shall certify that the items shown in the cost of construction is matching to the physical condition at the site of the real estate project;

(c) the chartered accountant shall certify cost incurred as per books of accounts and the proportion of the cost incurred on construction and land cost to the total estimated cost of the project

11. Recently in the month of June and July 2020 many promoters have received the Notice through E mail from RERA Authorities stating noncompliance / non filing of Post Registration, quarterly updates, professional certificates, audit report under RERA. Such notices were sent to registered mail ID’s of promotes of the project. We recommend the promoters to ensure the filings and such submissions within 15 days from the date of notice to comply with such notices and to avoid any penal consequences.

CA. Vinay Thyagaraj, Partner M/s. Venu & Vinay, Chartered Accountants are the member of NAREDCO – Karnataka. This article is written based on the experience of the author and present facts, data available as on 1st Sep 2020. Reader of this article can reach vinay@vnv.ca for further clarifications if any.

DISCLAIMERS

  • This article is to be published in the September Volume of NAREDCO.
  • This post underlines the information as per the applicable provisions of the Real Estate (Regulation and Development) Act, 2016; and
  • We recommend the Promoters to seek the assistance of the Professionals involved in the real estate practice in case of any queries, clarifications with respect to advertisement of the real estate project.

CONTACT

For any other details, clarifications, assistance, advise and other servicesplease visit www.reraconsultants.incan get in touch with us at 080 – 2223 3003email to legal@reraconsultants.in

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