RERA Compliances to check for Internal Audit of Real Estate Companies.

While conducting Internal Audit for a Real Estate company, amongst other areas, the auditor should consider checking the below mentioned points:

1. Promoter will first have to register its project with the authority before it shall advertise, sell or offer for sale. Therefore, all the real estate properties should be registered with RERA.
2. Promotor will transfer 70% of the money received in collection account to RERA account. Amount shall be withdrawn from the RERA account after it is certified by an engineer, architect and a CA. The same shall be submitted to RERA through Quarterly progress report(QPR) and Annual Progress Report (APR).
3. Promotor shall get its account audited by a CA in practice within 6 months after the end of every FY. CA should also verify that the money collected are utilized for the particular project.
4. Promotor shall not receive more than 10% of the cost of flat without first entering in written Agreement for sale. Therefore, all the agreement for sale shall be first executed before accepting money more than 10% of sales consideration.
5. Promotor shall not transfer its rights and obligation in a project to a third party without obtaining prior consent from 2/3rd allottees.
6. Promoter shall execute the conveyance deed and transfer the possession of flat within the time period specified in sanctioned plan. The promotor shall transfer the flat after receiving all the sales consideration from the customers.
7. After obtaining the OC and transfer of flats the promotor shall transfer all the necessary documents and plan to the association of allottees.
8. In case of delay in the transfer of possession of flat, the promoter shall pay the allottees interest at SBI MCLR rate plus 2% for every month of delay.
9. The promotor shall receive interest at SBI MCLR rate plus 2% from the allottees if there is delay in receiving of money from the customers.
10. The allottees shall take the possession of flat within 2 months of OC. If the customers don’t accept the possession of flat, then the promotor may charge holding charges from the customers.
11. In case of delay in receiving of money from the customers, the promotor may cancel the unit by giving the cancellation letters to the customers. The Customer can also voluntarily cancel the flat. In both the cases the promotor shall forfeit the booking amount received from the customers as the cancellation charges.
12. Demand shall be raised to the customers as per the payment plan decided between the promotor and customer. The Demand shall be raised as per the timeline mentioned in the payment plan.
13. The Promotor shall sell its properties through a RERA registered real agent (broker).