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Bringing professionalism to real estate, the RERA way

Friday, September 15, 2017

The purpose of Real Estate (Regulation and Development) Act, 2016 (RERA) is to bring standardisation and professionalism in the execution of the real estate project. Ramesh S. Prabhu takes a detailed look at the role of professionals in the industry

Without involving professionals and making them accountable and responsible under the provisions of RERA, professionalism cannot be achieved. Therefore, the following professionals are provided important roles from the beginning till the completion of a real estate project.

Advocate and Legal Experts  
A promoter is require to appoint an advocate to obtain the necessary title clearance certificate in respect of the land on which the real estate project is being developed.

Preparation of various documents: The promoters also require to submit to the authorities at the time of application following documents
(i)    Agreement between the land owner and the developer
(ii)    Allotment letter
(iii)    Agreement for Sale
(iv)    Sale Deed of the Apartment, plot or bunglow
(v)    Conveyance deed of common area in favour of Association of allottees
(vi)    Various declarations to be submitted.

All the above documents required to be done as per the RERA provisions. The advocates and the legal experts will be able to guide the promoter in drafting the proper documents.

The architect is a professional who prepares the plan as per the prevailing development control rules and get the same approved from the competent authorities. The architect should be a member of council of architecture.  The promoter is required to execute an agreement as per the services offered as prescribed by the council of architecture. The architect is required to obtain the regular approval required and the promoter is required to upload the same on the website. The Act has provided that 70% of the funds received from the customer should be deposited in a designated account in a scheduled bank and utilised towards the cost of land and construction of the project. This ensures that the funds are not diverted and used for the purpose for which it has been collected. This will be ensured by three professionals collectively (Architect, Engineer and Chartered Accountant). Architect has to provide the certificate as and when required by the promoter about the percentage of work completed by visiting the site. This certificate has to be obtained by the promoter before the amount is withdrawn from the designated account in which 70% of the collection from the customer is directly deposited and is used for the purpose of the land cost and the construction cost. Once the building is complete is all respect, a completion certificate has to be obtained from the competent authority and submitted to the promoter for withdrawal of the balance lying in the designated account.

Project Engineer
A civil engineer needs to be appointed by the promoter for the supervision and monitoring of the real estate project. An agreement for various services to be offered need to be executed with the engineer and the promoter should accept the supervision by such engineer. The engineer is required to submit the certificate regarding the estimated cost of the project of construction. During the construction period, he needs to supervise the work and whenever the promoter requires, he needs to submit a certificate for the estimated cost of the construction incurred on the project. Such certificate needs to be obtained before the amount is withdrawn from the designated account in which 70% of the customers amount is deposited to be used for land cost and the construction cost.

Chartered Accountant for certification
The promoter needs to engage the services of chartered accountant in practice who would verify the certificate issued by the Architect and the engineer with the books of accounts, bank statement, etc and conclude the amount of land cost and the construction cost incurred on the project. He shall issue a certificate which will entitle the promoter to withdraw the amount from the 70% designated account.

Chartered Accountant for yearly Audit
The promoter is required to appoint a separate practicing chartered accountant to verify the books of account, bank statements at the end of the financial year and obtain a yearly audited report stating that the amount collected from the customer is utilised for the respective project and 70% designated account withdrawal has been done in the manner prescribed.  The auditor is required to verify the certificate issued by the architect, engineer and the chartered account for the purpose of withdrawal from the account.

Representation before the authorities
As per section 56 of the Act, the promoter may engage the services of Chartered Accountant, Cost Accountant, Company Secretary or the legal practitioner to represent them before the real estate regulatory authority or real estate appellate Tribunal or adjudication officer to defend the side of the promoter against any notices, grievances.

Other service providers
The promoter normally appoints contractor, estate agents and other professionals like project management consultants, etc to complete the projects. All these names also need to be displayed on the website of the authority on registration of the real estate project.

(Ramesh S. Prabhu is Chairman, Maharashtra Societies Welfare Association)

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