New MahaRERA Circular to Enhance Project Transparency
MahaRERA recently released a new circular that requires promoters to provide various certificates. These certificates must come from engineers, architects, and chartered accountants to the banks, with a copy sent to MahaRERA. This process must occur before promoters can withdraw any funds received from buyers, ensuring that payments align with construction progress.
Uploading Certificates for Home Buyers' Convenience
The real estate regulatory authority will upload these certificates from architects and engineers to its website. This step will allow home buyers to easily track the exact status of their project. Previously, promoters only needed a self-declaration to the bank for withdrawals.
Promoters' Responsibilities and Audit Requirements
Promoters now have to get their accounts verified by a chartered accountant within six months of the fiscal year's end. They must also submit an account statement certified and signed by the CA. The CA's audit will confirm that funds raised for a specific project are used appropriately and that withdrawals are in proportion to the work completed. This rule applies to ongoing, new, and upcoming projects.
Ensuring Financial Transparency and Compliance
Promoters are obligated to deposit 70% of the money received from buyers into a separate account designated for the project. This money must only be used for construction costs, land costs, and other related expenses. Promoters must provide certificates from the engineer, architect, and CA to MahaRERA and the bank at each withdrawal until the project completion certificate is received. This ensures withdrawals are proportional to the percentage of project work performed.
Greater Accountability and Oversight
Previously, MahaRERA allowed promoters to make a single self-declaration quarterly. Now, they must submit three certificates from the engineer, architect, and CA for each withdrawal. Anil D Souza, secretary of the Maharashtra State Bar Association, noted, “MahaRERA has not only brought more transparency to the financial aspect of project management but has also placed a greater responsibility on the promoters along with the engineer, the architect, and CA certifying at each step. Previously, home buyers were unable to know the status of their money once they have invested in a project. But with this regulation, authorities can regulate and track the dishonest practices of builders.”
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