RERA : Finance Aspects - PDF document

RERA : Finance AspectsMay 2017For Priv
RERA : Finance AspectsMay 2017For Private Circulation onlyCA Prajakta Shetye-DeoDirector, Posiview Consulting PartnersPresentation Overview2Part A: RERA ArchitecturePart B: Basics of RERAPart C: Impact of RERA on Finance DepartmentPart D: RERA and the Real Estate IndustryAnnexure I: Key DefinitionsAnnexure II: Format of CA FormsPart A: RERA ArchitectureFor Private Circulation onlyRERA ArchitectureStateRegulatory AuthorityCentre4•Central RERA Act•Notifications•Website•Regulations•Forms•Notifications•Rules•Forms•NotificationsMahaRERAAmbitWhMP Mre Phe “PlMnning AreMs” covered?All areas of Maharashtra are included in Planning Area as defined in Section 2(zh) of the RERA as the Urban Development Department of Government of Maharashtra has notified that Mah

arashtra Regional & Town Planning Act,1
arashtra Regional & Town Planning Act,1966 is applicable to all districtsStatus vis-à-vis other Existing ActsMaharashtra Ownership Flat Act, 1963 and Apartment Ownership Act, 1970 have not been repealed. Hence they are still applicable. However, where the provisions are inconsistent with RERA, the provisions of the Central RERA Act will prevail.5MahaRERAArchitectureCentral Act–Real Estate (Regulation and Development) Act, 2016–Notifications regarding commencement of Sections in the ActMahaRERA–Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017–Maharashtra Real Estate Regulatory Authority, Officers and Employees (Appointment and Service Conditions) Rul

es, 2017–Maharashtra Real Estate (R
es, 2017–Maharashtra Real Estate (Regulation and Development) (Recovery of Interest, Penalty, Compensation, Fine payable, Forms of Complaints and Appeal, etc.) Rules, 2017–Maharashtra Real Estate Appellate Tribunal, Officers and Employees (Appointment and Service Conditions) Rules, 2017–Maharashtra Real Estate Regulatory Authority (Form of Annual Statement of Accounts and Annual Report ) Rules, 2017MahaRERARegulator–Website www.maharera.mahaonline.gov.in–Maharashtra Real Estate Regulatory Authority (General) Regulations 2017–Maharashtra Real Estate Regulatory Authority (Recruitment and Conditions of Service of Employees) Regulations, 20176Key Components of RERARERA 1. Real Estate Project Registration2. Real Estate Agent Registration3. Filing of Complaints4. Financial Discipl

ine5. Citizen Centricity and Transpa
ine5. Citizen Centricity and Transparency7Part B: Basics of RERAFor Private Circulation onlyStructure of the ActProceduralBusiness / FinanceAdministrativeI. PreliminaryI. Definitions VI. AdvisoryCouncilV. RER AuthorityII. RegistrationIX. AuditVII. TribunalIII. Functions and Duties of PromoterX. MiscellaneousIV. AllotteesVIII. PenaltiesRERA has 10 Chapters –5 are Crucial from Business angleNote1:RomannumbersintableareChapternumbersinRERA.ThefullnamesoftheChapterhasbeenshortenedforbetterunderstandingandpresentationStatusofMaharashtraOwnershipofFlatAct(MOFA)(andsimilarActsinotherStates)RERAhasrepealedonlytheMaharashtraHousingandRegulationAct,2012andhenceMOFAisstillapplicable.OncedateofcommencementofRERAisnotifiedinOfficialGazette,t

heprovisionsofMOFA(andsimilarActs
heprovisionsofMOFA(andsimilarActsintheirrespectivestates)willcontinuetoapplytotheextentthattheyarenotinconsistentwithRERA.9LinktodownloadRERA:http://164.100.47.4/BillsTexts/RSBillTexts/PassedRajyaSabha/realest-238-RSP-E.pdfRegistration & Impact of Ongoing ProjectsRegister projects not having Completion Certificate when Act comes into forceProvisionImpactProjects notrequired to be registeredIf CompletionCertificate obtained before commencement of the Act i.e. before 30thApril 2017Project with several buildingsand completion for 1 or more buildingsWhetherthe Buildings with full completion certificate can be excluded from Registration as a completed “Phase” of the Project depends on the facts each caseSalesCollectionsfrom Customers in sold units for on

going projectsAfter ongoing Projectis
going projectsAfter ongoing Projectis registered, the sales collection after registration should also be deposited in the Separate RERA AccountApplications of provisions of MahaRERANoexemptions have been given to ongoing projects and all provisions of RERA apply to them10Application for RegistrationCompanyDetailsProjectDetailsDetailsinAffidavitName,RegisteredAddress,CopyofApprovalsLegalTitleinLandEntityType(proprietorship,partnershipfirm,LLP,Companyetc.)&RegistrationNumberSanctionedPlans,LayoutandSpecificationoftheProject.LocationdetailsandclearDemarcation.LandisfreefromencumbrancesordetailsofencumbrancesName&PhotosofPromotersDetailsofDevelopmentPlanandfacilitiesTimeperiodforcompletionofproject/phaseDetailsofPastprojectsinlast5years

(completedandunderdevelopment)andth
(completedandunderdevelopment)andtheirCurrentStatusPro-formaofAllotmentLetter,AgreementforSaleandConveyanceDeed70%ofamountrealizedfromallotteestobedepositedinSeparateBankAccounttobeusedforconstructionandlandDetailsofdelaysinprojectscompletedandbeingdevelopedNumber,TypeandCarpetareaofApartments,exclusiveBalconyandopenterracesAccountsofProjecttobeauditedwithin6monthsofYearEndDetailsofLandandPaymentspendinginprojectscompletedandbeingdevelopedNumberandareasofgaragesPromoterwilltakependingapprovalsintimeDetailsofcasespendinginprojectscompletedandbeingdevelopedDetailsofRealEstateAgents,Architect,ContractorPromoterhasfurnishedalldocumentsPromoter to also keep updated details on his page on website of Authority 11A

dvertisements & Model ApartmentProvisio
dvertisements & Model ApartmentProvisionImpactDefinitionAnydocumentdescribedorissuedasadvertisementPublicityinanyformisadvertisementCarehastobetakeninpressreleases,customerconferences,exhibitionsetc.IncorrectandfalsestatementinadvertisementorModelApartment,PlotorBuildinga.IfAllotteeretainstheapartment-anypersonwhogivesadvancecanclaimcompensationfromthePromoterifhehassufferedlossordamagea.IfAllotteecancels–refundentireinvestmentplusinterestpluscompensation(Note:Itseemsforcancellation,showinghesufferedlossisnotrequired)ModelApartmentCaretobetakenwhileconstructingModel/ShowFlatsandeven3DWalkthroughs.Has a wide scope and includes all communication related to Project12Booking & SalesProvisionImpactCannotbook,sell

advertise,offerforsalewithoutregis
advertise,offerforsalewithoutregistrationInvestorSale/PreLaunchnotpossibleinProjectTaking“ApplicationFee”insteadof“BookingAmount”NotPossibleasexpresslyprohibitedExistingprojectsneedtoregisterwithin3monthsofcommencementoftheActRERAwillalsoapplytoApartmentsalreadysoldiftheProjecthasnotreceivedCompletionCertificateAll“bookings”tobereportedonWebsiteofAuthorityReportingistobedonetoAuthorityatBookingstageitselfandnotregistrationofdocumentstageRegistrationofAgreementCompulsorybeforetakingmorethan10%bookingadvanceorApplicationFeeCancellationofBookingAllotmenthastobecancelledasperthetermsofAgreementofSaleBooking is a critical stage: Allottees get all rights under the Act13Cancellation of AgreementProvisionIm

pactConditionsofCancellationPromoter
pactConditionsofCancellationPromotercancancelonlyintermsofagreementforsaleConditionsforallotteeforapproachingauthorityforrelief1.IfCancellationisnotaspertermsofagreement2.Isunilateral3.WithoutsufficientcauseNote:AlltheconditionshavetobesatisfiedDelayinpaymentbyallotteeofcostofflatandallrelatedchargesPromotercanchargeinterestatprescribedrateCompensationtoPromoterNoprovisionofcompensationtoPromoterevenincaseofrepeateddefaultsbyallotteeCancellation Clauses of Booking & Agreement need to drafted carefully14Construction & DevelopmentProvisionImpactConstructiontobedoneonlyasperSanctionedPlansuploadedontheMahaRERAportalNoChangespossiblepostRegistrationwithoutallotteeconsentAnyalterationstorequireconsentofAllotteesCon

sentofeveryAllotteeincaseofaltera
sentofeveryAllotteeincaseofalterationtoAllotteeapartmentorSpecificationsthereinConsentof2/3rdsAllotteesincaseofalterationtochangestoSanctionedPlans,Building,CommonAreas,Layout,etc.QuarterlyUpdatesUpdatesinBookedApartmentshastobemadequarterly;Also,anyupdatesinproposedsanctionstoactualsanctions,approvals,etc.havetobeupdatedontheportalUnderstand Allottee consent15Formation of Society & Conveyance ProvisionImpactRegistrationofProjectPro-formaofConveyanceDeedhastobesubmittedatthetimeofRegistrationofProjectFormationofLegalEntityforSingleBuildingProjectoroneBuilding/WinginaLayoutProjectSubmitapplicationwithin3monthsfromthedateonwhich51%ofthetotalAllotteesinthebuildingorwinghavebookedtheirapartmentsFormat

ionofApexBodySubmitapplicationwith
ionofApexBodySubmitapplicationwithin3monthsfromthedateofreceiptofOCofthelastbuildingtobeconstructedintheLayoutTimeforConveyanceDeedAsagreed;Incasenotimelineagreedupon:Within3monthsfromthedateofissueofOccupancyCertificateor51%ofAllotteeshavepaidfullconsideration,whicheverisearlier.ResponsibilityofPromoter(AlsoReferslide‘Possession&Maintenance’)TheresponsibilitiesofPromoteraretillconveyanceofApartmenttoallotteesortheCommonAreastotheAssociationofAllottees.ResponsibilityforstructuralorotherdefectscontinuesevenafterConveyance.ResponsibilityofAllottee(AlsoReferslide:‘FilingofComplaints’)Everyallotteemustparticipateintheregistrationofconveyancedeed.PromoterorAssociationofAllotteescanfileacompla

inttoAuthorityforfailureofAllottee
inttoAuthorityforfailureofAllottee.Both Promoter and Allottees to ensure formation of Society and Conveyance 16Possession & Maintenance ProvisionImpactPromoterfailsorisunabletogivepossession:-InaccordancewithtermsoftheAgreement-BydateasperAgreementor-DuetoDiscontinuanceofbusinessasdeveloper-DuetoSuspensionorRevocationofRegistration-AnyotherreasonIfAllotteewishestowithdraw:InterestatrateasmaybeprescribedANDcompensationIfAllotteewishestocontinue:InterestatrateasmaybeprescribedforeverymonthofdelaytilldateofpossessionLossduetodefectiveTitleofLandPromotershallcompensateallotteeforlosscausedtohim(i.e.Promoter)duetodefectiveTitleinLandRectificationofDefectsafterpossessionDefects‘broughttonotice’within

5yearstoberectifiedwithoutcostwi
5yearstoberectifiedwithoutcostwithin30daysDefectscovered:-Structural-Workmanship-QualityorProvisionofservices-AnyotherobligationofpromoterasperAgreementUnderstand liabilities related to possession and post-possession17Filing of ComplaintsProvisionExplanationWho can fileAnyAggrieved Person Note: Following can also file a complaint:-Association of Allottees-RegisteredVoluntary Consumer AssociationBasisfor filing complaintViolation or Contravention of provisions of the Act, Rules of RegulationsAgainst Whom can Complaintbe filed-Promoter-Allottee-RealEstate AgentInterimOrders during enquiryAuthority can pass RestrainingOrders without giving notice if it deems fit where it is of the opinion that an act has been committed or continuing to committed or about to

be committedin contravention of the A
be committedin contravention of the Act, Rules, Regulations.Power to issue directionsAuthoritymay issues such directions to Promoter, Allottee, Real Estate Agent as considers necessary to discharge its functions under the ActCompetition Commission Authorityhas powers to suo-motomake a reference to the Competition Commission of IndiaAny Aggrieved Person can file complaint to Authority 18Penalties on Promoter by Authority & TribunalREGULATORYAUTHORITYPenaltyNottakingPriorregistrationu/s3Upto10%ofEstimatedCostoftheProjectasdecidedbytheAuthority(SeeNote1)NotpayingPenaltyimposedasaboveOrContinuestoviolateSec3-Imprisonmentupto3years-Furtherpenaltyof10%ofprojectcost-OrbothGivingfalseinformationorcontraveningprovisionsofSec4Upto5%ofEstimatedCos

toftheProjectasdecidedbytheAutho
toftheProjectasdecidedbytheAuthorityContraveninganyotherprovisionotherthanSec3and4Upto5%ofEstimatedCostoftheProjectasdecidedbytheAuthorityPenalty for contravention can also include imprisonment Note:1)TheestimatedcostoftheProjectwillbenotasdeclaredbythepromoterbutasdecidedbytheAuthorityforpurposeofpenaltyprovisions2)Appealwillbeheardonlyafterdepositof30%ofpenaltyorsuchhigherpercentasdecidedbytheTribunaloramounttobepaidtoallotteeincludinginterest&compensationorboth19APPELLATE TRIBUNALPenaltyPromoterfailstocomplywith,orcontravenesanyoftheorders,decisionsordirectionsoftheAppellateTribunal-Imprisonmentupto3years-Penaltyof10%ofprojectcost-Orboth(SeeNote2)Part C: Impact of RERA on Finance Depart

mentFor Private Circulation onlyRole o
mentFor Private Circulation onlyRole of Finance DepartmentFinancial Discipline is an important foundation of RERARERA impacts FinMnce DepMrPmenP needs Po McP Ms M “GMPe-keeper” of Phe Project21FinanceProject FundingProject CostProject Cash FlowsAccounting & Audit FunctionsRERA Impact on Project FundingPre-launch Offers/SalesInvestor Offers/SalesCross-Collaterizationonly to the extent of 30%?Escrow Arrangements with Lenders or Land-owners?Area Share ArrangementsDetermining Project Funding Requirement at early stage and arranging Finance as needed will be crucial for Project Success22RERA Impact on Project Cost23ProvisionImpactPlansubmissionforProjectRegistrationCostofallconsultantswillhavetobeincurredupfrontasRegistrationwithAuthorityw

illrequiredetailedplansSaleofProje
illrequiredetailedplansSaleofProjectafterRegistrationCapitalofPromoterislikelytogetlockedforthe1-2yearsfromLandAcquisitiontoLaunchofProjectaftersanctionandregistrationwithRERAuthorityEntireProjecttobesanctionedatstartChangeinLayoutwillrequirepermissionof2/3rdallottees;hencePromotersmayhavetopayallpremiumsandchargesupfrontandgetfulllayoutsanctionedDepositof70%collectionfromallotteesintoSeparateAccountCapitalcanbewithdrawninproportiontocompletionoftheProjectandhencewillgetlockedupevenafterlaunchInsuranceTitleInsurance,ProjectInsuranceandanyotherInsuranceasmaybeprescribedbytheAuthoritywilladdtothecostoftheProjectCompletionwithintimeSincetheremaybepenaltiesfordelayedpossession,Developerwillhav

etoinvestinnewtechnology,betterco
etoinvestinnewtechnology,bettercontractorsetc.5YearWarrantyPromoterwillhavetorectifyalldefectsupto5yearsfrompossessionfreeofcostCompliancewiththeActPromoterwillhavetoemployqualifiedinternalteamtomonitorcomplianceundertheActaswellasappointexperiencedConsultantsforreviewasthepenaltyfordefaultsishugeRERA Impact on Project Cash Flows Promoter has to open a SeparateAccount –One Account per Project / Phase as registered with the Authority–Account has to be with a ScheduledBank–Withdrawal from the Account on the basis of the Certificates of Engineer, Architect & Chartered Accountant–Post OC, entire balance can be withdrawnOngoing Projects–100% amounts collected to be deposited if CA Certificate states that balance cost is more th

an balance receivableWhat is includ
an balance receivableWhat is included in 70%????24RERA Impact on Accounting & Audit FunctionsProject-based Accounting a must!Need for Budgetary & Cost Control SystemsGood MIS systems and updated accounting for optimum Project Cash Flow Management?Era of Concurrent or Internal Audits25How can a Finance Professional contribute?Develop RERA Expertise –understand the Act, Rules and Regulations and stay updated with the developmentsBe the Central Binding Point for the linkages between the various Departments –which need to come together for RERA ComplianceStrengthening of Budgetary, Cost Control and MIS Systems will bring in efficiency, accuracy and timeliness in RERA reporting and compliance26Part D: RERA and the Real Estate IndustryFor Private Circulation onlyRERA –

Key Challenges28①Ongoing Projects w
Key Challenges28①Ongoing Projects which have old obligations such as JV, Customer, Banker etc will need to be carefully planned①100% details of the project from plans to construction progress will be on Website for public viewing①Developers will have to change financial management practices with 70% amount to be deposited in Separate Account①Costs will go up due to registration, money locked up in 70% Account, no pre-launch sales etc.①Developers will have to be careful of commitments like specifications, amenities, possession date as there are heavy penalties for non-complianceRERA –Key Benefits29①Real Estate will get Industry Status as the business will now be 100% regulated by the same rules across the Country①Customer confidence will increase due to more transparency ①Deve

lopers will also get a forum i.e. RERA A
lopers will also get a forum i.e. RERA Authority and Tribunal to file cases of default by Customers and Brokers ①Continuous Audit and Monitoring of project by professionals such as Engineer, Architect and CA should improve performance①Confidence of Banks and Investors will increase which will lead to finance on better terms for long termAnnexure I : Key DefinitionsFor Private Circulation onlyDefinition: AllotteeEvery type of buyer is an allotteeAllottee:INCLUDESAllottee:EXCLUDESthepersontowhomaplot,apartmentorbuilding,asthecasemaybe,hasbeenallotted,sold(whetherasfreeholdorleasehold)orotherwisetransferredbythepromoter,andapersontowhomsuchplot,apartmentorbuilding,asthecasemaybe,isgivenonrent;thepersonwhosubsequentlyacquiresthesaidallotmentthroughsa

le,transferorotherwise31Definition:
le,transferorotherwise31Definition: PromoterDeveloper and Seller both become PromotersProvisionapersonwhoconstructsorcausestobeconstructedanindependentbuildingorabuildingconsistingofapartments,orconvertsanexistingbuildingorapartthereofintoapartments,forthepurposeofsellingallorsomeoftheapartmentstootherpersonsandincludeshisassignees;apersonwhodevelopslandintoaproject,whetherornotthepersonalsoconstructsstructuresonanyoftheplots,forthepurposeofsellingtootherpersonsallorsomeoftheplotsinthesaidproject,whetherwithorwithoutstructuresthereonanydevelopmentauthorityoranyotherpublicbodyinrespectofallotteesanapexStatelevelco-operativehousingfinancesocietyandaprimaryco-operativehousingsocietywhichconstructsap

artmentsorbuildingsforits5Members
artmentsorbuildingsforits5Membersorinrespectoftheallotteesofsuchapartmentsorbuildings;oranyotherpersonwhoactshimselfasabuilder,coloniser,contractor,developer,estatedeveloperorbyanyothernameorclaimstobeactingastheholderofapowerofattorneyfromtheownerofthelandonwhichthebuildingorapartmentisconstructedorplotisdevelopedforsalesuchotherpersonwhoconstructsanybuildingorapartmentforsaletothegeneralpublic.32Explanation:wherethepersonwhoconstructsorconvertsabuildingintoapartmentsordevelopsaplotforsaleandthepersonswhosellsapartmentsorplotsaredifferentpersons,bothofthemshallbedeemedtobethepromotersandshallbejointlyliableassuchforthefunctionsandresponsibilitiesspecified,underthisActortherulesan

dregulationsDefinition: Carpet AreaCa
dregulationsDefinition: Carpet AreaCarpet Area means “Net Usable Area of the Apartment”CarpetArea:INCLUDESCarpetArea:EXCLUDESAreacoveredbytheinternalpartitionwallsoftheapartmentAreacoveredbytheexternalwallsAreasunderservicesshaftsExclusivebalconyorverandaharea(SeeNote1below)Exclusiveopenterracearea(SeeNote2below)33Note1:“Exclusivebalconyorverandaharea”:Meanstheareaofthebalconyorverandah,asthecasemaybe,whichisappurtenanttothenetusablefloorareaofanapartment,meantfortheexclusiveuseoftheallotteeNote2:“Exclusiveopenterracearea”:Meanstheareaofopenterracewhichisappurtenanttothenetusablefloorareaofanapartment,meantfortheexclusiveuseoftheallotteeDefinition: Common AreasEvery Square Foot of Developed

Area and LandProvision(i)theentir
Area and LandProvision(i)theentirelandfortherealestateprojectorwheretheprojectisdevelopedinphasesandregistrationunderthisActissoughtforaphasetheentirelandforthatphase(ii)thestaircases,lifts,staircaseandliftlobbies,firescapes,andcommonentrancesandexitsofbuildings(iii)thecommonbasements,terraces,parks,playareas,openparkingareasandcommonstoragespaces(iv)thepremisesforthelodgingofpersonsemployedforthemanagementofthepropertyincludingaccommodationforwatchandwardstaffsorforthelodgingofcommunityservicepersonnel(v)installationsofcentralservicessuchaselectricity,gas,waterandsanitation,air-conditioningandincinerating,systemforwaterconservationandrenewableenergyvi)thewatertanks,sumps,motors,fans,com

pressors,ductsandallapparatusconnec
pressors,ductsandallapparatusconnectedwithinstallationsforcommonuse(vii)allcommunityandcommercialfacilitiesasprovidedintherealestateproject(viii)allotherportionoftheprojectnecessaryorconvenientforitsmaintenance,safety,etc.andincommonuse34Definition: AdvertisementWide definition to cover all communicationsProvision“Advertisement”meansanydocumentdescribedorissuedasadvertisementthroughanymediumINCLUDES:Notice,circularorotherdocumentsPublicityinanyform,informingpersonsaboutarealestateproject,orofferingforsaleofaplot,buildingorapartmentInvitingpersonstopurchaseinanymannersuchplot,buildingorapartmentortomakeadvancesordepositsforsuchpurposes35Definition: Sanctioned PlanAll Plans and permissions sanctioned by Competen

t Authority till start of Project Provi
t Authority till start of Project ProvisionSiteplan,buildingplan,serviceplan,parkingandcirculationplan,landscapeplan,layoutplan,zoningplanandsuchotherplanandincludesstructuraldesigns,ifapplicablePermissionssuchasenvironmentpermissionandsuchotherpermissions,whichareapprovedbythecompetentauthorityDefinition: InterestInterest payable by Promoter from the date of receiving amountPayablebyPromotertoAllotteePayablebyAllotteetoPromoterDefinitionRateofinterestchargeablefromtheallotteebythepromoter,incaseofdefault,shallbeequaltotherateofinterestwhichthepromotershallbeliabletopaytheallottee,incaseofdefault;PayablebyPromotertoAllotteeCalculatedfromdateofreceiptofamountorpartthereoffromallotteetillrefundofamountalongwithint

erestPayablebyAllotteetoPromoterCa
erestPayablebyAllotteetoPromoterCalculatedfromdateofdefaulttilldateofpaymentTypeofinteresta)InterestmentionedinAgreementforSalefordefaultsofthetermsoftheAgreementa)InterestprescribedbyRulesfordefaultsandcontraventionsundertheAct36Definition: Real Estate Project37All types of development with purpose of selling is covered as ProjectProvisionDevelopmentofabuildingorabuildingconsistingofapartments,orConvertinganexistingbuildingorpartthereofintoapartments,orDevelopmentoflandintoplotsorapartment,asthecasemaybeForthepurposeofsellingallorsomethesaidapartmentsorplotsorbuilding,asthecasemaybeAndincludes--Commonareas,developmentworks,allimprovementsandstructuresthereon-Alleasement,rightsandappurtenancesbelongingther

etoAnnexure II : Formats of CA FormsFo
etoAnnexure II : Formats of CA FormsFor Private Circulation onlyForm 3 –FhMrPered AccounPMnP’s FerPificMPe(For Registration of a Project and Subsequent Withdrawal of Money) Sr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.i.LandCostii.Development Cost / Cost of ConstructionTotal2.Total Estimated Cost of the Real Estate Project [1(i) + 1(ii)] of Estimated Column]3.Total Cost Incurred of the Real Estate Project [1(i) + 1(ii)] of Incurred Column]4.% completion of Construction Work (as per Project Architect’s Certificate) 5.Proportion of the Cost incurred on Land Cost and Construction Cost to the Total Estimated Cost. ( 3/2 %) 6.Amount Which can be withdrawn from the Designated Account Total Estimated Cost * Proportion of cost incurred (2 * 5) 7.Less: Amount withdrawn

till date of this certificate as per the
till date of this certificate as per the Books of Accounts and Bank Statement 8.Net Amount which can be withdrawn from the Designated Bank Account under this Certificate39Form 3 –FhMrPered AccounPMnP’s FerPificMPe(For Registration of a Project and Subsequent Withdrawal of Money) Sr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.i.LandCostii.Development Cost / Cost of ConstructionTotal2.Total Estimated Cost of the Real Estate Project [1(i) + 1(ii)] of Estimated Column]3.Total Cost Incurred of the Real Estate Project [1(i) + 1(ii)] of Incurred Column]4.% completion of Construction Work (as per Project Architect’s Certificate) 5.Proportion of the Cost incurred on Land Cost and Construction Cost to the Total Estimated Cost. ( 3/2 %) 6.Amount Which can be withdrawn from th

e Designated Account Total Estimated Co
e Designated Account Total Estimated Cost * Proportion of cost incurred (2 * 5) 7.Less: Amount withdrawn till date of this certificate as per the Books of Accounts and Bank Statement 8.Net Amount which can be withdrawn from the Designated Bank Account under this Certificate40•Estimated Cost can be input only at the time of Registration and cannot be changed later.•IncurredCost should be updated at least quarterly.Form 3 –FhMrPered AccounPMnP’s FerPificMPe(For Registration of a Project and Subsequent Withdrawal of Money) Sr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.i.LandCostii.Development Cost / Cost of ConstructionTotal2.Total Estimated Cost of the Real Estate Project [1(i) + 1(ii)] of Estimated Column]3.Total Cost Incurred of the Real Estate Project [1(i)

+ 1(ii)] of Incurred Column]4.% comple
+ 1(ii)] of Incurred Column]4.% completion of Construction Work (as per Project Architect’s Certificate) 5.Proportion of the Cost incurred on Land Cost and Construction Cost to the Total Estimated Cost. ( 3/2 %) 6.Amount Which can be withdrawn from the Designated Account Total Estimated Cost * Proportion of cost incurred (2 * 5) 7.Less: Amount withdrawn till date of this certificate as per the Books of Accounts and Bank Statement 8.Net Amount which can be withdrawn from the Designated Bank Account under this Certificate41CA Certificate has inputs from Architect’s Certificate and Engineer’s CertificateForm 3 -Land CostSr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.i.LandCosta.Acquisition Costof Land or Development Rights, lease Premium, lease rent, interest cost incu

rred or payable on Land Cost and legal
rred or payable on Land Cost and legal costb.Amount of Premium payable to obtain development rights, FSI, additional FSI, fungible area, and any other incentive under DCR from Local Authority or State Government or any Statutory Authority c.Acquisition cost of TDR(if any) d.Amounts payable to State Government or competent authority or any other statutory authority of the State or Central Government, towards stamp duty, transfer charges, registration fees etc.; and e.Land Premium payable as per annual statement of rates (ASR) for redevelopment of land owned by public authorities. 42Form 3 -Land Cost –Rehabilitation schemeSr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.i.LandCostf.Under Rehabilitation scheme:(i) Estimated construction cost of rehab building including si

te development and infrastructure for th
te development and infrastructure for the same as certified by Engineer(ii) Actual Cost of construction of rehab building incurred as per the books of accounts as verified by the CA Minimum of (i) and (ii) to be taken as Construction Cost(iii) Cost towards clearance of land of all or any encumbrances including cost of removal of legal/illegal occupants, cost for providing temporary transit accommodation or rent in lieu of Transit Accommodation, overhead cost(iv) Cost of ASR linked premium, fees, charges and security deposits or maintenance deposit, or any amount whatsoever payable to any authorities towards and in project of rehabilitation. 43Form 3 –Development Cost / Cost of ConstructionSr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.ii.Development Cost / Cost of Constructiona.

(i)(ii)Estimated Cost of Constructio
(i)(ii)Estimated Cost of Construction as certified by EngineerActual Cost of construction incurred as per the books of accounts as verified by the CA (for adding to total cost of construction incurred, Minimum of (i) or (ii) is to be considered) (iii)On-site expenditure for development of entire project excluding cost of construction as per (i) or (ii) above, i.e. salaries, consultants fees, site overheads, development works, cost of services(including water, electricity, sewerage, drainage, layout roads etc.), cost of machineries and equipment including its hire and maintenance costs, consumables etc. All costs directly incurred to complete the construction of the entire phase of the project registered. b.Payment of Taxes, cess, fees, charges, premiums, interest, etc. to any Statutory Authorit

yc.Principal Sum and Interest payable
yc.Principal Sum and Interest payable to financial institutions, scheduled banks, NBFCs, or moneylenders on construction funding or money borrowed for construction44Form 3 –Development Cost / Cost of ConstructionSr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.ii.Development Cost / Cost of Constructiona.(i)(ii)Estimated Cost of Construction as certified by EngineerActual Cost of construction incurred as per the books of accounts as verified by the CA (for adding to total cost of construction incurred, Minimum of (i) or (ii) is to be considered) (iii)On-site expenditure for development of entire project excluding cost of construction as per (i) or (ii) above, i.e. salaries, consultants fees, site overheads, development works, cost of services(including water, electrici

ty, sewerage, drainage, layout roads et
ty, sewerage, drainage, layout roads etc.), cost of machineries and equipment including its hire and maintenance costs, consumables etc. All costs directly incurred to complete the construction of the entire phase of the project registered. b.Payment of Taxes, cess, fees, charges, premiums, interest, etc. to any Statutory Authorityc.Principal Sum and Interest payable to financial institutions, scheduled banks, NBFCs, or moneylenders on construction funding or money borrowed for construction45What is the Estimated Cost of Construction as Certified by the Engineer?•Cost towards Civil, MEP (Mechanical, Electrical, Plumbing) and Allied Works•Prepared for each Building/Phase in the Project and for the Internal and External Development works for the Entire Registered Real Estate Project including the c

ommon areas. •Estimated cost calcula
ommon areas. •Estimated cost calculations based on •Drawings/Plans given by Developer/Consultants•Schedule of Quantity/items of entire work by Quantity Surveyor•Assumption of cost of material, labour and other inputs made by the Developer•Site inspection carried out by the EngineerForm 3 –Development Cost / Cost of ConstructionSr.No.ParticularsEstimated Amt. (Rs.)Incurred Amt. (Rs.)1.ii.Development Cost / Cost of Constructiona.(i)(ii)Estimated Cost of Construction as certified by EngineerActual Cost of construction incurred as per the books of accounts as verified by the CA (for adding to total cost of construction incurred, Minimum of (i) or (ii) is to be considered) (iii)On-site expenditure for development of entire project excluding cost of construction as per (i)

or (ii) above, i.e. salaries, consulta
or (ii) above, i.e. salaries, consultants fees, site overheads, development works, cost of services(including water, electricity, sewerage, drainage, layout roads etc.), cost of machineries and equipment including its hire and maintenance costs, consumables etc. All costs directly incurred to complete the construction of the entire phase of the project registered. b.Payment of Taxes, cess, fees, charges, premiums, interest, etc. to any Statutory Authorityc.Principal Sum and Interest payable to financial institutions, scheduled banks, NBFCs, or moneylenders on construction funding or money borrowed for construction46•Project Financing will have to be tied up before Registration itself as Estimated Cost cannot be changed later.•Various types of lenders covered under this definition.Form 3 –A

dditional Information for Ongoing Projec
dditional Information for Ongoing ProjectsSr. No.ParticularsAmount Rs.1.Estimated Balance Cost to Complete the Real Estate Project (Difference of Total Estimated Project cost less Cost incurred) 2.Balance amount of receivables from sold apartments as per Annexure A to this certificate (as certified by Chartered Accountant as verified from the records and books of Accounts) 3.(i) Balance Unsold area (to be certified by Management and to be verified by CA from the records and books of accounts) (ii) Estimated amount of sales proceeds in respect of unsold apartments (calculated as per ASR multiplied to unsold area as on the date of certificate, to be calculated and certified by CA) as per Annexure A to this certificate 4.Estimated receivables of ongoing project [Sum of 2 + 3(ii)] 5.Amount to be depo

sited in Designated Account –70% or
sited in Designated Account –70% or 100% _________%47Form 3 –Additional Information for Ongoing Projects -AnnexuresSold InventoryUnsold Inventory ValuationReady Reckoner Rate as on the date of Certificate of the Residential /commercial premises Rs_________ per sq.m. 48Sr.No.Flat No.Carpet Area (in sq.mtrs.)Unit Consideration as per Agreement /Letter of Allotment Received AmountBalance ReceivableSr.No.Flat No.Carpet Area (in sq.mtrs.)Unit Consideration as per ReadyReckoner RateForm 5 –Annual Report on Statement of AccountsTo [NAME & ADDRESS OF PROMOTER] SUBJECT: Report on Statement of Accounts on project fund utilization and withdrawal by [Promoter] for the period from ____ to ___with respect to MahaRERARegn. Number ------1. This certificate is issued in accordanc

e with the provisions of the Real Estate
e with the provisions of the Real Estate (Regulation and Development) Act, 2016 read along with the Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017. 2. I/We have obtained all necessary information and explanation from the Company, during the course of our audit, which in my/our opinion are necessary for the purpose of this certificate. 3. I/We hereby confirm that I/We have examined the prescribed registers, books and documents, and the relevant records of [Promoter] for the period ended ________ and hereby certify that: i. M/S.____ (Promoter) have completed ________% of the project titled __(Name) MahaRERARegn.No._____locatedat _________________________ ii. Amount collected durin

g the year for this project is Rs. ___
g the year for this project is Rs. ___________________ and amounts collected till date is Rs. _______________________ iii. Amount withdrawn during the year for this project is Rs. _________________ and amount withdrawn till date is Rs. _____________________ 4. I/We certify that the [Name of Promoter] has utilized the amounts collected for___ project only for that project and the withdrawal from the designated bank account(s) of the said project has been in accordance with the proportion to the percentage of completion of the project. (If not, please specify the amount withdrawn in excess of eligible amount or any other exceptions)(Signature and Stamp/Seal of the Signatory CA) 49Form 5 –Annual Report on Statement of AccountsTo [NAME & ADDRESS OF PROMOTER] SUBJECT: Report on Statement of Accounts on

project fund utilization and withdrawal
project fund utilization and withdrawal by [Promoter] for the period from ____ to ___with respect to MahaRERARegn. Number ------1. This certificate is issued in accordance with the provisions of the Real Estate (Regulation and Development) Act, 2016 read along with the Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017. 2. I/We have obtained all necessary information and explanation from the Company, during the course of our audit, which in my/our opinion are necessary for the purpose of this certificate. 3. I/We hereby confirm that I/We have examined the prescribed registers, books and documents, and the relevant records of [Promoter] for the period ended ________ and hereby cert

ify that: i. M/S.____ (Promoter) have
ify that: i. M/S.____ (Promoter) have completed ________% of the project titled __(Name) MahaRERARegn.No._____locatedat _________________________ ii. Amount collected during the year for this project is Rs. ___________________ and amounts collected till date is Rs. _______________________ iii. Amount withdrawn during the year for this project is Rs. _________________ and amount withdrawn till date is Rs. _____________________ 4. I/We certify that the [Name of Promoter] has utilized the amounts collected for___ project only for that project and the withdrawal from the designated bank account(s) of the said project has been in accordance with the proportion to the percentage of completion of the project. (If not, please specify the amount withdrawn in excess of eligible amount or any other exceptions)(Si

gnature and Stamp/Seal of the Signatory
gnature and Stamp/Seal of the Signatory CA) 50Information to be provided on the Certificate:•Project Completion %ge•Amounts collected for the Project –till date and for the year•Amounts withdrawn for the Project –till date and for the year50Form 5 –Annual Report on Statement of AccountsTo [NAME & ADDRESS OF PROMOTER] SUBJECT: Report on Statement of Accounts on project fund utilization and withdrawal by [Promoter] for the period from ____ to ___with respect to MahaRERARegn. Number ------1. This certificate is issued in accordance with the provisions of the Real Estate (Regulation and Development) Act, 2016 read along with the Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on

Website) Rules, 2017. 2. I/We have obt
Website) Rules, 2017. 2. I/We have obtained all necessary information and explanation from the Company, during the course of our audit, which in my/our opinion are necessary for the purpose of this certificate. 3. I/We hereby confirmethat I/We have examined the prescribed registers, books and documents, and the relevant records of [Promoter] for the period ended ________ and hereby certify that: i. M/S.____ (Promoter) have completed ________% of the project titled __(Name) MahaRERARegn.No._____locatedat _________________________ ii. Amount collected during the year for this project is Rs. ___________________ and amounts collected till date is Rs. _______________________ iii. Amount withdrawn during the year for this project is Rs. _________________ and amount withdrawn till date is Rs. _________________

____ 4. I/We certify that the [Name o
____ 4. I/We certify that the [Name of Promoter] has utilized the amounts collected for___ project only for that project and the withdrawal from the designated bank account(s) of the said project has been in accordance with the proportion to the percentage of completion of the project. (If not, please specify the amount withdrawn in excess of eligible amount or any other exceptions)(Signature and Stamp/Seal of the Signatory CA) 51It has to be certified that the amounts collected for the Project have been utilized for that Project only.Hence, Internal Controls Systems will have to be put in place and these areas covered during the Internal Audit process.51Form 5 –Annual Report on Statement of AccountsTo [NAME & ADDRESS OF PROMOTER] SUBJECT: Report on Statement of Accounts on project fund utilization and

withdrawal by [Promoter] for the period
withdrawal by [Promoter] for the period from ____ to ___with respect to MahaRERARegn. Number ------1. This certificate is issued in accordance with the provisions of the Real Estate (Regulation and Development) Act, 2016 read along with the Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017. 2. I/We have obtained all necessary information and explanation from the Company, during the course of our audit, which in my/our opinion are necessary for the purpose of this certificate. 3. I/We hereby confirmethat I/We have examined the prescribed registers, books and documents, and the relevant records of [Promoter] for the period ended ________ and hereby certify that: i. M/S.____ (Pro

moter) have completed ________% of the p
moter) have completed ________% of the project titled __(Name) MahaRERARegn.No._____locatedat _________________________ ii. Amount collected during the year for this project is Rs. ___________________ and amounts collected till date is Rs. _______________________ iii. Amount withdrawn during the year for this project is Rs. _________________ and amount withdrawn till date is Rs. _____________________ 4. I/We certify that the [Name of Promoter] has utilized the amounts collected for___ project only for that project and the withdrawal from the designated bank account(s) of the said project has been in accordance with the proportion to the percentage of completion of the project. (If not, please specify the amount withdrawn in excess of eligible amount or any other exceptions)(Signature and Stamp/Seal of th

e Signatory CA) 52All withdrawals fro
e Signatory CA) 52All withdrawals from the Designated/Separate Bank Account during the year have to be checked by the Statutory Auditor and he has to certify that it is in proportion to the %gecompletion of the project.Any withdrawals in excess of eligible amount have to be stated separately.52Form 5 –Annual Report on Statement of AccountsTo [NAME & ADDRESS OF PROMOTER] SUBJECT: Report on Statement of Accounts on project fund utilization and withdrawal by [Promoter] for the period from ____ to ___with respect to MahaRERARegn. Number ------1. This certificate is issued in accordance with the provisions of the Real Estate (Regulation and Development) Act, 2016 read along with the Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents,

Rates of Interest and Disclosures on We
Rates of Interest and Disclosures on Website) Rules, 2017. 2. I/We have obtained all necessary information and explanation from the Company, during the course of our audit, which in my/our opinion are necessary for the purpose of this certificate. 3. I/We hereby confirmethat I/We have examined the prescribed registers, books and documents, and the relevant records of [Promoter] for the period ended ________ and hereby certify that: i. M/S.____ (Promoter) have completed ________% of the project titled __(Name) MahaRERARegn.No._____locatedat _________________________ ii. Amount collected during the year for this project is Rs. ___________________ and amounts collected till date is Rs. _______________________ iii. Amount withdrawn during the year for this project is Rs. _________________ and amount withdrawn

till date is Rs. ___________________
till date is Rs. _____________________ 4. I/We certify that the [Name of Promoter] has utilized the amounts collected for___ project only for that project and the withdrawal from the designated bank account(s) of the said project has been in accordance with the proportion to the percentage of completion of the project. (If not, please specify the amount withdrawn in excess of eligible amount or any other exceptions)(Signature and Stamp/Seal of the Signatory CA) 53In case Form 5 issued by Statutory Auditor reveals that •any certificate issued by Chartered Accountant has false or incorrect informationand•the amounts collected for a particular project have not been utilized for the project and•the withdrawal has not been in compliance with the proportion to the percentage of completion of the pro

ject the Authority may take penal actio
ject the Authority may take penal actions under the Act and Rules as well as take up the matter with the professional body (ICAI) for necessary penal action and dismemberment53Conclusion: Success Mantra in Era of RERAPerformancePresentationPlanning54Disclaimer55Thecontentsofthisdocumentareprivilegedandconfidentialandnotforpubliccirculation.Thisdocumentisforgeneralinformationofourclientsandotherstowhomitisspecificallyprovided.Theinformationcontainedinthisdocumentisderivedfrompublicsources,whichwebelievetobereliablebutwhich,withoutfurtherinvestigation,cannotbewarrantedastotheiraccuracy,completenessorcorrectnessandwearenotobligatedtoupdateoramendthesame.Theinformationcontainedinthisdocumentisnotintendedtobenorshouldberegardedas

legaladviceandnooneshouldactons
legaladviceandnooneshouldactonsuchinformationwithoutappropriateprofessionaladvice.Posiviewacceptsnoresponsibilityforanylossarisingfromanyactiontakenornottakenbyanyoneusingthismaterial.To Know more on how we can be Your Trusted Partners in Growth:CA VinitVyankatesh DeoChairman & Managing Director+91 8975761062vinit@posiview.inCA Prajakta Shetye-DeoDirector+91 9822542044prajakta@posiview.in202, ChintamaniPride, Near City Pride, Kothrud, Pune -411 038www.posiview.inFund Raising Services for Real Estate DevelopersProjectFinancefromBanks&NBFCsEquityFundingforLandAcquisitionCash-outFinancingforOngoingProjectsCorporate&ProjectRestructuringStayupdatedon latestin the Real EstateIndustryat : Facebook: Posiview Consulting Partners