The Real Estate (Regulation and Development) Act, 2016 (RERA) is indeed a transformative regulation for the real estate sector. Its implementation has brought significant changes the way real estate industry doing the business and the projects are developed, marketed, & sold.
In order to regulate the industry many provisions are built in the statute. Starting from Registration, periodical compliance viz., Quarterly updates, Annual Audits, standardized reporting formats, advertisement, formation of association, modification, changes in registration details etc. The promoter required to continue with RERA from registration to completion of the project.
The authority collects the information from the promoter on progress of the project through Quarterly updates / Quarterly Progress reports. Quarterly Progress Report under RERA is designed to ensure transparency and provide updates on the status of the real estate project to both the regulatory authorities and the allottees. The details of such a report, as indicated in the documents, are typically included in the various forms and rules under RERA. Each of these forms is part of the compliance documents necessary for submission to the RERA authority to demonstrate the physical and financial progress of the project.
Section 11(1) of the RERA Act mandates the promoter to submit the information on quarterly basis once receives the real estate registration. the details are presented in a Tabular manner for the reader to understand better –
| S. No. | Details | Details | ||||||||
| 1 | Legal Reference under the RERA Act 2016 for Quarterly updates | Section 11(1) of RERA Act 2016 | ||||||||
| 2 | Legal Reference under the K RERA Rules 2017 | K RERA Rule 15D | ||||||||
| 3 | How to submit the Quarterly updates | Online on the Web portal of the Authority | ||||||||
| 4 | Any exemptions / relaxation for small or rural projects | No,
Applicable to all the registered real estate projects irrespective of type, size, location |
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| 5 | When should promoter start filing the Quarterly updates | Applicable from the quarter, project receives the registration.
Eg., Project registration number received on 11.7.2024, promoter liable to file quarterly update from Sep 2024 Quarter and onwards |
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| 6 | Due Dates for filing the quarterly updates |
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| 7 | Upto what period, the promoter needs to file the Quarterly updates | All quarter from the registration date till the progress of project reaches 100% | ||||||||
| 8 | Project received the Occupancy Certificate, should the promoter continue to file the Quarterly updates | Yes or No, depending on the completion of the project.
Generally, the planning authority issue the occupancy certificate for the Building Structure. However, many works would be pending ever after receipt of Occupancy Certificate viz., common amenities, facilities, garden etc. Hence the promoter continues to file the quarterly updates till reaches 100% of the promises as mentioned in Agreement for sale or marketing collaterals |
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| 9 | Certificates to be uploaded during the quarterly updates | Form 4 – Chartered Accountants Certificate
Form 5 – Architect Certificate Form 6 – Engineer Certificate |
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| 10 | Can promoter himself submit the Quarterly updates or does he need support of professionals. | If the promoter is knowledgeable about RERA, they can submit the necessary information, documents, and certificates related to the project online. However, we recommend seeking the support of professionals to verify and submit these documents. This ensures compliance with the latest circulars, notifications, and guidelines issued by RERA. | ||||||||
| 11 | Non filing of the Quarterly updates with in due date | Section 61 of the RERA Act, 2016 empowers the RERA Authority to levy penalties for non-compliance with its provisions. The penalties for such non-compliance can be substantial and may extend up to 5% of the estimated cost of the real estate project.
RERA Authority has issued the Notification and Circular on 3rd Sep 2020 and 30th Dec 2020 on imposing delay fee for delayed submission of Quarterly updates |
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| 12 | Information and required submit during the Quarterly updates | Refer Annexure 1 | ||||||||
| 13 | Documents to be uploaded during the quarterly updates | Refer Annexure 2 | ||||||||
| 14 | As a professional, what are the precautions to be taken while issuing the Certificates | Yes, certainly all 3 professionals Architects, Engineers and the Chartered Accountant in Practice shall follow the professional conduct while issuing the certificates. For details.
Refer Annexure 3 |
Annexure – 1 – Information and required submit during the Quarterly updates
1. Project Information: Prefilled information on the website of the Authority
a) Project Name
b) Promoter Name
c) RERA Registration Number
d) Total Cost of the Real Estate Project
e) Number Buildings / Towers / Phases
f) RERA Separate Bank account Number
g) Total inventory / units available – tower/building/phasewise
2. Financial Progress:
a) Total Amount Collected from Allottees during the Quarter
b) Total Amount deposited to RERA Separate account of the project
c) Total Amount Incurred by Promoter during the Quarter
d) Total Borrowings and Mortgage of project land
3. Inventory movement:
a) Total number of units booked
b) Total number of garage / Car parking booked / allotted
c) Balance available
4. Physical Progress of construction:
a) Percentage Completion of Construction Work – building wise, floor wise
b) Details of Completed activity – start date and end date
c) Status of Infrastructure Development (Roads, Water Supply, Electricity, etc.,)
d) Status of Amenities in the project (Clubhouse, Swimming pool, banquet hall)
e) Photos of work Progress – building wise / tower wise
5. Professional Certifications: Verification and Certification
a) Architect’s Certificate: Certifying the physical progress of percentage of completion of the project as per the approved plan.
b) Engineer’s Certificate: Valuation of the completed of the work at site
c) Chartered Accountant’s Certificate: Verification of total amount incurred, amount realised from the allottees, deposited into the bank account and eligible to withdraw, balance available
(refer earlier months news letter to know more about RERA and CA Certificates)
6. Legal Compliance: modification to plan Approvals, NOC’s
a) Adherence to sanctioned plans and project specifications
b) Details of any modifications or amendments to the original plan
c) Compliance with any legal and environmental requirements – various NOC’s obtained during the Quarter
7. Other compliances under the Act etc:
a) Report on formation of association of allottees if any
b) Report on labour welfare cess collected and deposited
c) Litigation / Legal cases or orders (interim / final) on the project land if any
Annexure 2 – Documents to be uploaded during the quarterly updates –
1. Photographs of work progress at project
2. Copy of various NOC’s obtained during the quarter
3. Copies of the Fixed Deposit receipt (if the excess amount is deposited in fixed deposit)
4. Copy of the litigation – order copy
5. Association formation during the quarter if any – copy of registration
6. Professional certificates in Form 4, Form 5 and Form 6
7. RERA Separate bank account statement for the Quarter -full statement (by way of attachment to Form 4)
Annexure – 3 As a professional, what are the precautions to be taken while issuing the Certificates
As a professional issuing certificates under RERA, it is crucial to exercise due diligence and adhere to a range of precautions to ensure accuracy, compliance, and integrity. Here are key precautions to consider:
1. Understanding the scheme of the project and Thorough Verification
a) Understanding the scheme of the Project: professional shall understand the type, size of the project, scheme of development, promises made and the details as provided during the registration. This is the basis for the professionals to issue the certificates.
b) Check Documentation: Verify all project-related documents, including land titles report, approvals, and sanctioned plans (one time exercise and make a note of the details)
c) Cross-Check Data: Ensure the data provided by the promoter matches the actual progress and financial records.
2. Adherence to RERA Guidelines
a) Stay Updated: Regularly review the latest RERA circulars, notifications, and guidelines.
b) Compliance: Ensure all certificates comply with the specific requirements outlined by RERA in your state.
3. Detailed Inspection
a) Site Visits: Conduct regular site visits to assess the physical progress of the project (by the Architect before issuance of Architect Certificates)
b) Quality Checks: Evaluate the quality of construction and adherence to approved plans and specifications (Engineer before issuance of the Certificates)
4. Accurate Financial Reporting
a) Understand the components – one time exercise of understanding the components of cost. This is very important concept, against each cost, the chartered accountant certifies the cost incurred.
b) Cost incurred during the quarter: Verify the costs incurred vis-à-vis cost estimated based on the books of accounts maintained by the promoter
c) Amount Realised from the Allottees and deposit into RERA Separate bank account: verify the amount realised from the allottees and whether minimum 70 % amount is deposited into the RERA Separate bank account
d) Borrowings if any: any borrowings during the quarter, ensure 100% borrowings shall be deposited into the RERA Separate bank account
5. Professional Integrity
- Objectivity: Maintain objectivity and independence while issuing certificates.
- Ethical Standards: Adhere to ethical standards and avoid conflicts of interest.
6. Documentation and Record Keeping
- Maintain Records: Keep detailed records of all inspections, verifications, and communications with the promoter.
- Backup Documents: Maintain copies of all supporting documents and certificates issued.
7. Legal Compliance
- Legal Awareness: Be aware of all legal requirements and implications related to issuing RERA certificates.
- Insurance: Ensure the project is adequately insured as per RERA guidelines.
8. Clear Communication
- Transparent Reporting: Clearly report any discrepancies or issues found during verification.
- Detailed Certificates: Provide detailed and comprehensive certificates, outlining the basis of your verification and findings.
9. Continuous Learning
- Training: Participate in ongoing training and development programs related to RERA compliance and real estate regulations.
- Networking: Engage with other professionals and regulatory bodies to stay informed about best practices and updates.
10. Example Clauses for Certificates:
a) Architect’s Certificate: “I have inspected the site and verified the construction progress as per the approved plans. The quality of construction is satisfactory, and the project is proceeding as scheduled.”
b) Engineer’s Certificate: “Based on my inspection, the project has achieved the specified milestones in terms of structural completion. The quality of materials used is as per the standards prescribed.”
c) Chartered Accountant’s Certificate: “I have verified the financial records and bank statements. The funds collected from allottees have been appropriately utilized, and the remaining amount is duly deposited in the escrow account.”
Conclusion
Quarterly updates or Quarterly progress reports are essential for maintaining transparency with the allottees and ensuring that the regulatory authority is kept informed about the project’s progress and Issuing certificates under RERA is a responsibility that demands thorough scrutiny, adherence to legal standards, and a commitment to professional integrity. By taking these precautions, professionals can help ensure the credibility of the real estate project and protect the interests of all stakeholders involved.
The author Vinay Thyagaraj, is a partner at M/s. Venu & Vinay, Chartered Accountants at Bengaluru, you can be reached him at vinay@vnv.ca
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