Introduction: The Real Estate (Regulation and Development) Act, 2016 (RERA), was enacted to bring transparency, accountability, and efficiency to India’s real estate sector. It imposes stringent compliance requirements on promoters and real estate developers — covering everything from timely project registration, regular updates, and quarterly filings to the submission of detailed certifications by professionals such as Chartered Accountants (CAs), Architects, and Engineers.
Given the legal complexities and potential liabilities involved, hiring experienced professionals is not just advisable but essential. Errors or oversights in RERA compliance can lead to significant penalties, project delays, and reputational damage.
Why Expertise Matters in RERA Compliance:
1.Accuracy in Financial and Technical Certification
Under Section 4(2)(l)(D) of the Act, a promoter must deposit 70% of the amount collected from allottees in a separate bank account. Withdrawals are permitted only after certification by an Engineer, Architect, and CA that the percentage of completion matches the funds to be withdrawn. An error in this process may result in a violation under Section 4 and 7 of the Act.
Experienced professionals:
- Understand how to properly certify stage-wise completion.
- Know the documentary evidence required by authorities.
- Can advise developers on best practices for fund withdrawal and utilization.
2. Mitigating Legal Risk:
Mistakes in certifications, even if inadvertent, can attract penalties under Sections 60 and 61 of RERA. Moreover, professionals who issue misleading certificates may also be held personally liable under professional conduct rules or disciplinary regulations of their governing bodies.
3. Maintaining Allottee Confidence:
Allottees are increasingly aware of their rights. With RTI (Right to Information) and other transparency mechanisms, they can access certificates submitted to the RERA authority. If discrepancies are found, it can lead to complaints, legal battles, and even criminal prosecution.
Case Study:
Allottee’s Investigation Leads to RERA Complaint
Background: In a recent RERA complaint filed before a State Real Estate Regulatory Authority, an allottee raised serious allegations against a promoter for submitting defective and misleading certificates by the project Architect, Engineer, and Chartered Accountant while reporting completion of the project.
Key Facts:
- The allottee obtained the uploaded professional certificates submitted by the promoter while reporting completion of the project.
- Upon review, the allottee alleged that the reporting of project completion was not proper.
- The certificates failed to align with ground reality, as physical verification revealed significant work remained pending.
- The Allottee has alleged that as on the date of issue of certificates by the professionals the STP, WTP and other essential amenities were incomplete and non-operational as on the date of the declarations submitted while reporting completion.
- The Allottee has alleged that the CA has failed to recognize and report the quantum of Corpus Funds collected by the Promoter in his certificate.
- The Allottee has alleged that the CA has wrongly certified that there is no delay period interest payable, while the project had been significantly delayed and the liability to pay interest would be there.
- The Allottee has alleged that out of 13 quarterly updates 12 were field belatedly and out of 2 Annual Audits 1 was field belatedly.
- The Allottee has alleged that the CA has failed to verify the project finances and report the maintenance amounts collected by the promoter.
- The deposits paid to the water supply department and the electricity departments was much lower than the deposit collected cumulatively from all the allottees in the project.
Relief Sought:
- In addition to seeking other reliefs, the allottee has demanded that the project be declared as not completed as on the date the Promoter has reported completion.
- Direct the promoter to apply for extension of registration.
- The allottee has demanded levy of penalties against the promoter under Sections 60 & 61 for non-compliance with the provisions of the Act on account of several defaults including misrepresentation and procedural fraud.
- A plea may also made eventually to initiate disciplinary action against the CA, Engineer, and Architect for misrepresentation and aiding the promoter in financial misappropriation.
Impact:
- The case is currently under consideration. However, it highlights the increasing vigilance among allottees and the importance of professional due diligence.
- It serves as a warning that improper compliance not only risks regulatory penalties but also civil and criminal liabilities for all parties involved.
Recommendations
To avoid situations like the above:
1.Hire seasoned professionals with a proven track record in offering RERA compliance services and do not engage with people who portray to be consultants without any experience whatsoever or knowledge & deeper understanding of the subject.
2. Insist on verification and documentation for every certificate issued.
3. Engage compliance consultants and/or legal experts who understand the nuances of the Act and State rules.
4. Verify the antecedents of the people/ consultants as also the experience they have in the field and the knowledge they have, before engaging him/her/them to do the compliances
5. Engage compliance consultants or legal experts who can carry out checks before submitting documents to the Authority.
6. Maintain a transparent relationship with allottees to build trust and mitigate legal exposure.
Conclusion:
RERA is a powerful legislation designed to protect the interest of homebuyers and restore confidence in the real estate sector. However, the success of a project under RERA hinges largely on the credibility of the documentation submitted and the professionals certifying it.
Experienced professionals are not a cost — they are an investment in legal security, transparency, and trust. As the case study demonstrates, the failure to engage competent hands can open the promoter to damaging litigation and regulatory scrutiny.
Developers must, therefore, treat RERA compliance not as a checkbox exercise, but as a core function of project governance.
Author Bio
