Self Declaration to be submitted by Promoters to the Bank

By Dr Sanjay Chaturvedi, LLB, Ph.D.

Whereas the MahaRERA Authority, under section 37 of the RERA Act, 2016 and Regulation 38 of the Maha RERA (General) Regulations 2017 is vested with the powers to issue directions and orders to promoters, real estate agents and allottees from time to time for effective implementation of the Act and to achieve the underlying object behind the Real Estate (Regulation and Development) Act, 2016.

Whereas the promoter under section 4(2)(1)(D) of the Real Estate (Regulation and Development) Act, 2016 is required to deposit seventy per cent of the amounts realised for the real estate project from the allottees in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and to be used only for that purpose. Further, the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project.

The promoter is also required to get his separate account audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilized for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project.

Under the provisions of Rule 5 of 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 the promoter is required to submit the said certificates to the scheduled bank operating the separate account, for the purpose of withdrawal from time to time. Since the promoter is required to get his designated separate account audited within six months after the end of every financial year it will not be proper to submit these certificates with the said bank. These certificates would be necessary to be retained with the promoter for the purpose of auditing. However, the promoter should submit self-declaration to the bank once every quarter as annexed herewith.





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