RERA COMPLIANCE:

REGISTRATION,
CERTIFICATE & AUDIT By - CA. Prabhu Ramesha
The Real Estate (Regulation and 3. Penalty u/s 59 of RERA for
Development) Act, 2016 (the Act) came into non-registration
absolute implementation on 1st May 2017.
1. If any promoter contravenes the provisions
Recognizing the professional quali cation, of section 3, he shall be liable to a penalty
experience and skills of the Architects, which may extend up to ten per cent of
Engineers and Chartered Accountants, they the estimated cost of the real estate
are given due importance and role in the Act. project as determined by the Authority.
2. If any promoter does not comply with the orders,
The major compliances in RERA is about decisions or directions issued under sub-section
project registration, maintaining separate (1) of section 59 of RERA or continues to violate
bank account for 70% of the money received the provisions of section 3, he shall be punishable
from the allottees to withdrawn based on the with imprisonment for a term which may extend
certi cates given by the professionals, up to three years or with ne which may extend
quarterly updating progress of the real estate up to a further ten per cent of the estimated cost
project physical as well as nancial on website of the real estate project, or with both.
of the Authority, carry out the Annual audit
by a separate Chartered accountant.
3. The penal provisions are very stringent and
no promoter can take the risk of
1. TO GET THE REAL ESTATE PROJECT
contravention of section 3. The penal
REGISTERED WITH THE AUTHORITY
provisions also offer substantial relief to
[SECTION 3(1)]
the allottee as henceforth the allottees will
be dealing with only registered projects
1. Legal Provisions
and as such will have the protection of
Section 3(1) makes it obligatory for the
promoter to obtain registration of the RERA.
project from the MahaRERA Authority. For 2. WITHDRAWAL OF THE APPLICATION FOR
that purpose all the requirements for REGISTRATION
registration have to be completed to the
satisfaction of the MahaRERA Authority. In case, the promoter needs more time to get
This subject is discussed in detail in certain demanded documents by the
chapter “Registration of Projects.” authority, the registration application may be
withdrawn Rs. 5000 will be deducted in such
2. Prior Registration is must before cases as Administrative Charges by
Marketing and advertising MahaRERA and balance amount will be
Promoter by virtue of this section is refunded.
prohibited from advertising, marketing or Once the registration is granted, the same
booking of the new project. The prevailing cannot be withdrawn. However, there is
practice by the promoter to pre-launch the provision for deregistration of the project.
project without sanctions/approvals and
acceptance of booking money from the 3. EXTENDING THE PERIOD OF
allottees is prevented by this law. COMPLETION OF THE PROJECT
(1) Apply for Extension under section 6 or The period of extension that can be applied
section 7(3) of the Act: under this section can be more than one year.
There is no limitation of the time period for
In case, the project is not completed within which extension may be applied under this
the period declared at the time or project Section. But such extension must be
registration, the promoter needs to apply for commensurate with the balance pending
the extension of the project completion work that need to be nished for completing
period by citing necessary reasons of force the project.
majeure. It may be noted that there are two
types of extensions of the Real Estate Project 3. Documents required to make
that can be made. First is extension of the application u/s 7(3)
real estate project under section 6 of the Act
and another type of extension can be Following documents are required for making
obtained under section 7(3) of the Act. The an application of extension of the project
Authority gives the opportunity of being under this section in the prescribed format as
heard to the promoter before granting or per MahaRERA Circular No. 28/2021 dated
rejecting the application for extension. 8th March, 2021.
(i) Application of promoter to obtain
(2) Period of Extension granted under extension.
section 6 of RERA (ii) Written consent from at least 2/3rd of the
allottees of the project.
It is the Authority which may in reasonable 4. Determination of 2/3rd Allottees based
circumstances, without default on the part of on the following documents
the promoter, based on the facts of each (I) Total number of allottees in the project
case, and for reasons to be recorded in shall be decided as per the latest Form 3
writing, extend the registration granted to a
certi ed by Chartered Accountant.
project for such time as it considers
(ii) Information of the “Sold Inventory”
necessary, which shall, in aggregate, not
uploaded by Promoter as directed by
exceed a period of one year.
MahaRERA as per Circular No. 29/2021
dated 9th April, 2021.
4.REQUIREMENTS TO OBTAIN EXTENSION
(iii)Information about sold inventory as certi
UNDER SECTION 7(3) OF THE ACT
ed by Chartered Accountant in Form No. 3
as well as information uploaded by
1. Application u/s 7(3) of RERA for project
Promoter as per Circular No. 29/2021 must
extension
be inconsistent with each other.
(iv)The date of the information given in Form
If project is incomplete even after receiving
3 that is Chartered Accountant Certi cate
an extension under section 6, promoter may
should not be older than one month as on
apply for extension of the project US 7(3).
the date of the Application of extension.
2. Project extension u/s 7(3) of RERA with
conditions Example: Total number of ats booked/sold
as per Form No. 3 is 100. Therefore, for
satisfying the condition of 2/3rd Consent of
The Authority may, instead of revoking the
registration under section 7(1) of RERA, allottees, Promoter needs written consent of
permit it to remain in force subject to such at least 67 allottees in the prescribed format
further terms and conditions as it thinks t to as stated above.
impose, in the interest of the allottees, and
any such terms and conditions so imposed 5. CONSEQUENCES OF NOT OBTAINING THE
shall be binding upon the promoter. EXTENSION
 1. Bar on Advertisement and Marketing of land acquisition, building, and project
the project completion only.
2. The sub-registrar does not register the (8) Credits, as mentioned above, would be
agreement for sale initiated by the Bank on a “standing
3. The disbursement of project loan to the instruction” basis at End of every day from
promoter will be stopped the Project Receivable RERA account.
4. Home Loan disbursements to the (9) Each withdrawal/transfer from the Project
allottees may be stopped Designated RERA Account shall be made on
5. MahaRERA may display the projects receipt of a request letter from the Promoter,
under “lapsed Projects” on the web signed by the authorized signatory of the
portal Promoter (i.e. Project Engineer, Architect &
6. The reputation of the promoter will be at Chartered Accountant).
risk (10)The Promoter/Builder/Developers
7. MahaRERA may levy the Penalty account shall be opened as a Current
8. The professionals may disassociate from Flexi account, or any current account as
such projects requested.
9. The allottees may withdraw from the 7. CERTIFICATION & AUDIT
project u/s 18(1)(b)
10. The Association of Allottees may (1) Certi cation at the time of Registration
takeover the project u/s 8
11. The Association of Allottees or other At the time of Registration of Project,
stakeholders may invoke section 7 of Promoter has to submit following Certi cates:
Insolvency and Bankruptcy Code, 2016 Ÿ CA Certi cate: Estimate & Incurred Cost of
6. SALIENT FEATURES OF THE RERA the Project;
DESIGNATED ACCOUNT OPENED BY FEW Ÿ Engineer Certi cate: Estimated & Incurred
BANKS Cost of Construction;
Ÿ Architect Certi cate: Percentage of
(1) The Project Receivable (Collection) RERA Completion of the Project.
account shall be opened and operated in Ÿ Promoter has to take above Certi cates for
the following manner. every withdrawal to be made from RERA
(2) 100% of the project receivables collected Account.
shall be deposited into the Project Ÿ Certi cation for withdrawals from RERA
Receivable (Collection) RERA account. Account should be from a CA other than
(3) The Bank shall, at End of every day, the Statutory Auditor.
transfer the balance in the Project Ÿ Every promoter at the time of registration
Receivable RERA account in the following of a real estate project in addition to
manner through a “standing instruction”. providing the bank details of the separate
(4) 70% of the amount in the Receivable banka-ccount in the application for
account shall be transferred to the Project registration shall provide a Declaration
Designated RERA account. about the separate bank account for the
(5) Balance 30% of the amount in the Project real estate project on the Letterhead of
Receivable RERA account shall be the promoter in the manner as detailed in
transferred to the Pr-omoter/ Developer/ Format 'A' annexed Order No. 34/2022
Builder's current account. dated 27-7-22.
(6) The Project Designated RERA account
shall be opened with account operations (2) Certi cates at the time of withdrawal
subject to the following guidelines. from Bank Account
(7) All transactions in the account shall be in
accordance with the norms given in the � Promoter shall submit the said three certi
RERA Act, as in the funds must be used for cates to the schedule bank operating
 the separate account at the time of every Promoters shall submit following documents
withdrawal from the separate account in the correction module on their respective
irrespective whether such real estate login at time of the proposed change/transfer
project is a new project or an ongoing of the separate designated bank account from
project till the occupancy ce -rti one scheduled bank/branch to another:
cate/completion certi cate as the case
may be in respect of the said project is a. Self-declaration on promoter letter head
obtained and the copies thereof shall be explaining the rationale for
submitted online by promoters to ch-ange/transfer of the separate
MahaRERA Authority. designated bank account from one
Ÿ In the event, the said three certi cates as scheduled bank/branch to another;
submitted to the schedule bank operating b. Duly Notarized
the separate account entitles a promoter Declaration-cum-Undertaking as per the
to withdraw a particular amount and if the format prescribed in Annexure 'A'
promoter chooses to withdraw the said annexed to Circular No.43/2023 dated
amount in tranches, then for every such 20-02-2023;
withdrawal fresh certi cates from project c. Latest Chartered Accountant certi ed
architect! project engineer and chartered Form 3
accountant in practice need not be d. Declaration in Form 'A' as per Order No.
submitted. The copy of same certi cates 34 of 2022 dated. 27-07-2022 issued by
that entitled the promoter to withdraw the MahaRERA; and
amount up to the limit as stated in the said e. Such additional statements/documents as
three certi cates will have to be submitted may be called for by the Authority.
for every withdrawal along with letter from The documents as submitted by the
promoter recording therein the dates of promoter in the correction module shall be
the said certi cates and the details of the scrutinized and submitted for approval of the
withdrawal made and copies thereof shall Authority. Further, before submitting the
be submitted online by Promoters to proposal for approval, promoters shall also
MahaRERA Authority. have to upload on their respective web page
all compliances regarding their respective
(3) Transfer of Designated Bank Account real estate project.
from one Bank to another (4) Audit under RERA

Considering that the separate account in a Ÿ Promoter has to get the Accounts audited
schedule bank is critical and crucial for timely within 6 months of the end of the nancial
proiect progress and effective proiect year from his Statutory Auditor.
monitoring that will allow the Authority to Ÿ The Auditor should certify that:
make informed decisions about project risks, Ÿ amounts collected for a particular project
corrective actions and advancement of the have been utilised for the project.
project, henceforth with effect from the date Ÿ withdrawal has been in compliance with the
of this Order, change/transfer of the separate proportion to the percentage of
designated bank account from one schedule completion of the project.
bank/branch to another shall be permitted Ÿ Audit has to be done for every project
only with the approval of the Authority. registered under RERA. In case the
Promoter has multiple projects under the
Following procedure shall be followed for same rm, he will have to get an
change/transfer of the separate designated independent Audit Report for each Project.
bank account from one scheduled Ÿ There is provision of submitting Audit
bank/branch to another: Report to RERA Authority .