The Haryana Real Estate Regulatory Authority, Gurugram Real Estate Bank Accounts for the Registered Projects Directions, 2019

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Haryana Government Gazette

EXTRAORDINARY

Published by Authority

© Govt. of Haryana

No. 79-2019/Ext.] CHANDIGARH, FRIDAY, MAY 10, 2019 (VAISAKHA 20, 1941 SAKA)

THE HARYANA REAL ESTATE REGULATORY AUTHORITY, GURUGRAM

Notification

The 10th May, 2019

Direction to the builders/promoters with regard to opening of bank accounts

as per provisions of RERA.

No. 1/RERA GGM Directions 2019.— In exercise of the power conferred by Section 37 of the Real Estate (Regulation and Development) Act, 2016 the Haryana Real Estate Regulatory Authority, Gurugram having considered it necessary in the interest of scheduled delivery of any plot, apartment or building and for the purpose of ensuring the non-diversion of project funds has decided to issue the directions herein specified in supersession of all earlier directions in this regard.

The Haryana Real Estate Regulatory Authority, Gurugram Real Estate Bank Accounts for the

Registered Projects Directions, 2019

1. Short Title

These directions shall be called „the Haryana Real Estate Regulatory Authority, Gurugram Bank Accounts for the Registered Projects Directions, 2019"

2. Definitions

(i) "Act" means the Real Estate (Regulation and Development) Act, 2016.

(ii) "Authority" means the Haryana Real Estate Regulatory Authority, Gurugram established under sub-section (1) of section 20 of the Act.

(iii) "No Lien Account" means bank account without any third party rights or security interests.

(iv) "No Lien Fixed Deposit" means fixed deposit without any third party rights or security interests.

(v) "RERA Compliant Separate Account" (herein after referred RERA Account) means the separate bank account to be maintained by the promoter in a scheduled bank wherein 70% of the amount realised from the allottees of the project is to be deposited as per section 4(2)(l)(D) of the Act to cover the cost of construction and the land cost of the project.

(vi) "Promoter"s FREE Project Account" (herein after referred as „FREE Accounts") means an account wherein the residual amount after depositing 70% of the amount realised from the allottees in RERA account is deposited.

(1619)1620 HARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA) (vii) "Project"s MASTER Account" (herein after referred as „Master Account") means a separate bank account wherein the entire amounts realised for the real estate project from the allotees from time to time is deposited.

3.

General Guidelines

(i) The "RERA Account" opened in accordance with the provisions of section 4(2)(l)(D) of the Act, shall be a „No Lien Account", and any withdrawal from such account shall be in accordance with the provisions of the Act, the rules, the regulations there under and directions issued by the authority from time to time.

(ii) The promoter has to comply with provisions of principle of section 11(4)(g) and (h) of RERA, 2016.

Section 11(4)(g) and (h) of RERA, 2016 provides that the promoter shall-

pay all outgoings until he transfers the physical possession of the real estate project to the allottee

or the associations of allottees, as the case may be, which he has collected from the allottees, for the

payment of outgoings (including land cost, ground rent, municipal or other local taxes, charges for

water or electricity, maintenance charges, including mortgage loan and interest on mortgages or

other encumbrances and such other liabilities payable to competent authorities, banks and financial

institutions, which are related to the project):

Provided that where any promoter fails to pay all or any of the outgoings collected by him from the

allottees or any liability, mortgage loan and interest thereon before transferring the real estate

project to such allottees, or the association of the allottees, as the case may be, the promoter shall

continue to be liable, even after the transfer of the property, to pay such outgoings and penal

charges, if any, to the authority or person to whom they are payable and be liable for the cost of any

legal proceedings which may be taken therefor by such authority or person;

after he executes an agreement for sale for any apartment, plot or building, as the case may be, not

mortgage or create a charge on such apartment, plot or building, as the case may be, and if any

such mortgage or charge is made or created then notwithstanding anything contained in any other

law for the time being in force, it shall not affect the right and interest of the allottee who has taken

or agreed to take such apartment, plot or building, as the case may be;

(iii) The amount withdrawn from the „RERA Account" shall be utilized for the purpose of completion of the same real estate project. However, there is no end use restriction on the amount which is withdrawn from the „RERA Account", in accordance with the provisions of the Act, the rules, the regulations thereunder and directions.

(iv) In case of projects availing bank finance, loan amount and interest shall be disbursed and repaid from the FREE account.

(v) Promoter shall furnish an affidavit from the banker as per format (Annex-E) wherein banker undertakes to comply with the provisions of RERA, 2016.

4. Opening of Accounts

(i) Separate bank account for each of the registered project or each of the registered phase:

A RERA Account is to be maintained for each of the registered project/ phase as the case may be by the promoter. Details of this project specific account are to be submitted with the project registration application. As such the promoters shall have the „RERA Account" opened before application.

(ii) It shall be required to suffix the term "RERA Account for the Real Estate Project" in the name of the RERA Account holder.

(iii) There shall be three bank accounts relating to registered real estate project i.e., 1. MASTER Account, 2. RERA Account, and 3. FREE Account which shall be maintained in the same bank branch.

(a) "Project MASTER Account" (herein after referred as „Master Account") means a separate bank account wherein the entire amounts realised from the allotees for the project from time to time is deposited.

• This account shall be master collection account wherein 100% receivables from the allotees shall be deposited.

• This account shall be free from all encumbrances, lien, loan and control of any third party i.e lender/bank/financial institution.

• This account must be mentioned in the application form, builder-buyer agreement & other documents wherever required.

• This account can only be changed with the prior written permission of the authority.

(b) "RERA Compliant Separate Account" (herein after referred RERA Account) wherein 70% of the amount realised from the allottees of the project is to be deposited as per section 4(2)(l)(D) of the Act to cover the cost of construction and the proportionate land cost of the project.

• This account shall also be free from all encumbrances, lien, loan and control of any third partyi.e lender/bank/financial institution.

• This account shall be exclusively used for the construction and development of the project and proportionate land cost.

• The 70% amount from the master customer collection account shall be transferred to this account automatically at the end of each business day.

• The funds shall be released from this account upon submission of relevant certificates as per the provisions of RERA, 2016.

• No amount from this account shall be utilised towards repayment/ pre-payment of project loan/ facility, if any.

• This account is in nature of reimbursement account for reimbursement of expenditure incurred and paid on the proportionate land cost and construction cost.

(c) "Promoter"s FREE Project Account" (herein after referred as „FREE Accounts") means an account wherein the 30%residual amount after transferring/depositing 70% of the total amount realised from the allottees in RERA account, is transferred/deposited.

• This amount may be free account and can be utilised for making finance cost and repayment/ pre-payment of loan, if any

• The 30% amount from the project"s master account shall be transferred to this account automatically at the end of each business day.

• The funds available in this account may be used freely for business activitiesrelated to the same project provided the authority has not issued any directions to the promoter for such account.

(iv) Every project shall have only one RERA Account. In the case of multiple promoters, necessary contractual or legal arrangements should be made by the principal promoter, who is registering the project, to ensure proper operations of RERA Account.

5. Deposits in Account

(i) The promoter shall be responsible for transfer/deposit of seventy percent of the amount collected from allottees (other than pass through charges and indirect taxes) in the RERA Account.

In the case of project where the estimated cost to complete the project is higher than estimated amount of total receivables at any stage, hundred percent of the amount collected from the allottees (other than pass through charges and indirect taxes) shall be deposited in the „RERA Account" till situation is eased out.

(ii) The money lying in the „RERA Account" can be put in fixed deposits with the bank operating the „RERA Account" provided it is a „No Lien Fixed Deposit" and no loan can be obtained against or on such fixed deposit nor any charge can be created on such fixed deposit.

6.

Calculation of Land Cost and Construction Cost of Real Estate Project.

As per explanation (1) and (2) of rule 4(4) of the Haryana Real Estate (Regulation and Development) Rules, 2017

(i) For the purpose of sub-clause (D) of clause (l) of sub-section (2) of section 4, the land cost shall be the cost paid or incurred by the promoter, whether as an outright purchase, development rights (as per collaboration agreement), deposit, any purchase of TDR made as per prevailing policy, lease, registration charges, stamp duty and brokerage cost etc.

Further, for the purpose of sub-clause (D) of clause (l) of sub-section (2) of section 4, the land cost shall be the cost incurred and paid by the promoter in case licensee and promoter are the same. In case of collaborator where the land cost has not been paid as such and share either in built up area or in sale proceeds of the project has been settled between the licensee and the collaborator then cost of land shall be worked out either on basis of amount mentioned in the sale deed or prevailing collector/ circle rate of the area notified by district administration.

(ii) The construction cost shall be the cost incurred by the promoter, towards the on-site expenditure for the physical development of the project inclusive of all statutory charges as well as external development charges (EDC) and infrastructural development charges (IDC).

7. Withdrawals from Account

The promoter shall be required to follow the following procedure for every withdrawal from the RERA Account till the project is completed:

(i) As per the second proviso to section 4(2)(l)(D) of the Act provides that the amounts from the „RERA Account" shall be withdrawn by the promoter after it is certified by an architect, an engineer and a chartered accountant in practice, that the withdrawal is in proportion to the percentage of completion of the project.

(ii) For the purpose of withdrawal of amounts deposited in the „RERA Account" in respect of a registered project, the promoter shall have the following three certificates:

(a) Certificate from the project architect empaneled with the authority as given at annexure A certifying the percentage of completion of construction work of each of the tasks/activity of the building/ tower/ block of the project;

(b) Certificate from the engineer empaneled with the authority as given at annexure B for the actual cost incurred on the construction work of each of the building/wing of the project; and (c) Certificate from a practicing-chartered accountant empaneled with the authority other than the statutory auditor of the promoter as given at annexure C, for the cost incurred and paid on construction cost and the land cost. The chartered accountant in practice is also required to certify the proportion of the cost incurred and paid on construction and land cost to the total estimated cost of the project. The total estimated cost of the project multiplied by such proportion shall determine the maximum amount which can be withdrawn by the promoter form the RERA Account.

(iii) On completion of internal infrastructure and grant of occupancy certificate, including submission of last quarter report of the project and compliance of section 11(4)(g) and (h) regarding payment of all outgoings, payment of all statutory dues, clearing of all encumbrances on the project, the entire balance amount lying in the RERA Account can be withdrawn by the promoter with the priorHARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA) 1623 written approval of the authority. The authority may at its discretion order sufficient bank guarantee for any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottees from the date of handing over possession.

(iv) The banker shall ensure that no withdrawal whatsoever is permitted from the MASTER account that is maintained in addition to RERA account except for the transfer of money to RERA account and FREE account

(v) Further, in case allottees withdraws from the project, the requisite refund along with the payable interest thereof, to be paid to the allottee, shall be allowed to be paid from RERA/ FREE account in the same proportion in which collections were apportioned.

8. Reporting to Authority

(i) Promoter shall submit the certificates at annexure A, B and C to authority for withdrawal of funds and for quarterly return filling compliance. Promoters may be allowed to withdraw funds from RERA account, on interim basis during the quarter only after filing fresh certifications as on the said date qualifying for additional withdrawal.

Alternatively, the Promoter, at the time of registration of the project with the Authority, may opt for filing of certificates at annexure A, B and C for withdrawal of funds at such recurring period not exceeding a quarter which shall be in interest of the overall development and the allottees therein.

(ii) As per the third proviso of section 4(2)(l)(D) of the Act the promoter is required to get his accounts audited within six months after the end of every financial year by a chartered accountant in practice i.e. the statutory auditor of the promoter"s enterprise 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 utilised for that project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project.

(iii) In case of a fixed deposit being made from the monies lying in the „RERA Account", the chartered accountant empaneled with the authority or intimated by the promoter and concurred by the authority as per detailed project information submitted at the time of registration shall verify that there is no lien or charge on such fixed deposit. The promoter and/or chartered accountant shall obtain the no lien/charge certificate in respect to such fixed deposit, from the bank after every three months and submit the same as part of quarterly compliance report.

(iv) The promoter shall append the „RERA Account" passbook copy/statement of accounts certified by CA to certificate at annexure C upload as part of his quarterly return submission.

Note 1: The chartered accountant certifying at annexure C should be a "different entity" than the chartered accountant certifying form at annexure D. In other words, the chartered accountant certifying the withdrawal from the RERA account for the project should be different from the one conducting the audit of the project.

Note 2: If the form at annexure D issued by the chartered accountant reveals that any certificate issued by the architect, engineer or the chartered accountant contains false or incorrect information and 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 project, the authority, in addition to taking penal action as contemplated in the Act and the rules, may also take up the matter with the concerned regulatory body of the said professionals of the architect, engineer or chartered accountant, for necessary penal action against them, including blacklisting/cancellation/suspension of registration of membership for practice as such.

9. Change in RERA Account

(i) The promoter may change the RERA Compliant Account from one bank to another bank only with prior written permission of the authority.

(ii) The promoter shall not change Master Account of the project either in the same bank or to another bank without prior written permission of the authority1624 HARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA) (iii) For RERA Account change request, promoter has to make written application along with necessary documents in the following forms:

(a) Application for change in RERA Account as per form RA1.

(b) Certificate of account balance from bank with existing RERA Account as per form RA2.

(iii) Promoter is also required to submit fund transfer compliance letter as per form RA3 (confirmation letter for change in RERA Account) along with form RA4 (certificate of fund transfer from bank with new RERA Account and proof) of previous RERA Account closure.

10.

Powers of the Authority on RERA Account

(i) Upon revocation of the registration, the authority may direct the bank holding the RERA Account to freeze or de-freeze the said account, to facilitate the remaining development works in accordance with the provisions of sections 7(4)(c) and 8 of the Act.

(ii) The authority may in the interest of the allottees, enquire into the payment of amounts out of RERA Account as per the provisions contained in the Real Estate (Regulation and Development) Act, 2016 and the Haryana Real Estate (Regulation and Development) Rules, 2017.

11. Miscellaneous

In the event, the promoter faces any difficulty in giving effect to the provisions of these directions, the Authority, on a case to case basis, may provide resolution of the issue to such promoter in the overall interest of the development of the project &the allottees, within the provisions contained in the Real Estate (Regulation and Development) Act, 2016 and the Haryana Real Estate (Regulation and Development) Rules, 2017.

Secretary, For: Haryana Real Estate Regulatory Authority, Gurugram.

Application for change of RERA bank account*

(RA1)

Sub: Application for change in RERA bank account

Dear Sir,

With reference to the above-mentioned subject, I/We would like to apply for the authority"s approval for change in the "RERA Account" as per the following details:

I/We solemnly affirm and declare that the particulars given herein are correct to my/ our knowledge and belief.

I/We further undertake that I shall freeze all transactions from the said account until RERA conveys its decision on the RERA bank account change application.

Dated: ______________

Place: _______________

Yours faithfully,

Name, signature and seal of the promoter/authorized signatory

Certificate of account balance from Bank in respect of existing RERA account

(RA2)

Certificate of account balance from Bank in respect of existing RERA account but the authorised signatory of

the Bank

Dear Sir,

This is to certify that for the above-mentioned project "RERA Account" is operational with our bank as per following details.

I/We solemnly affirm and declare that the particulars given in herein are correct to my/our knowledge and belief.

Dated: _______________________

Place: _______________________

Yours faithfully,

Name, signature and seal of the bank authorized signatoryHARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA) 1627

Confirmation letter of change of RERA Account to be given by the promoter*

(RA3)

Sub: Confirmation letter of change of RERA Account

With reference my / our application for change in RERA Account vide letter dated _____________ and as per the terms and conditions mentioned in the in principal approval received from the Authority vide letter / email dated _______________, I/We confirm that the RERA Account has been changed and an amount of Rs. ____________________ (in words: ________________________________ ) has been transferred to the new RERA Account.

I undertake that I shall operate the RERA Account in compliance with RERA Act, rules and regulations.

I/We solemnly affirm and declare that the particulars given in herein are correct to my/ our knowledge and belief.

I/We further undertake that I/We shall freeze all transactions from the said account until RERA conveys its decision on the RERA bank account change application.

Dated: ______________

Place: _______________

Yours faithfully,

Name, signature and seal of the promoter/authorized signatory

Certificate of fund transfer from Bank having new RERA Account

(RA4)

Sub:

Dear Sir,

1. This is to certify that a RERA bank account for the above mentioned project is operational with our bank as per following details.

2. Further, a sum of Rs. __________________________ (in words: ___________________________________) has been credited into the above mentioned bank account on date ___________________

Dated: _______________

Place: ________________

Yours faithfully,

Name, signature and seal of the bank authorized signatoryHARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA) 1629

Annexure A

Date

:

Yours faithfully, Place

:

Signature & name (in block letters) with stamp of architect :

Council of architects (CoA) registration No.

:

Council of architects (CoA) registration valid till (date)HARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA) 1631

Note: (*) extend rows as per requirement.

Table-B

Note: (*) extend as per requirementHARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA) 1635

Annexure B

Note: (*) extend as per requirement

Annexure C

Table – A

Annexure D

ADDITIONAL INFORMATION FOR ONGOING PROJECTS

This certificate is being issued as per the requirement of compliance in accordance with RERA Acts/rules by the company for the project/phase under reference and is based on the records and documents produced before me and explanations provided to me by the management of the company; It is based on the verification of books of accounts and other related documents till (date) ______________.

Yours Faithfully,

Name and Signature of Chartered Accountant with Stamp

For (Name of CA Firm)

Partner / Proprietor

(Membership Number ......................)

Statement for calculation of Receivables from the Sales of the ongoing real estate project:

Booked Inventory

In case of plotted colony

In case of group housing colony

In case of commercial building

Unsold Inventory Valuation

Of the Residential/commercial premises Rs. ______________ per sm.

Note: (*) Extend as per requirement1644 HARYANA GOVT. GAZ. (EXTRA.), MAY 10, 2019 (VYSK. 20, 1941 SAKA)

AFFIDAVIT

1. We are the promoter (s) of the project as per details given below:-

2. Keeping in view the provisions of section 4 (2) (l) (D) of the Real Estate (Regulation & Development) Act, 2016, a separate account is to be maintained in a scheduled bank wherein 70% of the amounts realized from the allottees of the real estate project from time to time is to be deposited. Out of this account, only the costs of construction and land costs shall be covered and the amounts lying in this account shall be used only for that purpose.

3. Accordingly to comply with the above provisions of law, we are opening the following three accounts:

1. Master Account – in this account only the amount realized from the allottees of the real estate project from time to time shall be deposited.

We further undertake that there shall be no lien on this account No.__________opened in bank branch address:…………….

2. Separate RERA Account: as per provisions of RERA, a separate account is to be maintained by us i.e. promoter in a scheduled bank wherein 70% or more (if directed by the authority in special circumstances) of the amounts realized from the allottees of the project is to be deposited as per Section 4 (2) (l) (D) of the Act ibid to cover the costs of the construction and land costs of the project and shall be used only for that purposes. This shall be a no lien account.

We further undertake that the amounts from the separate accounts shall be withdrawn by us after it is certified by an engineer, architect and the chartered accountant in practice that withdrawal is in proportionate to the completion of the project.

We further undertake that for the purpose of withdrawing the amounts from this separate account, the regulation/directions of the Haryana Real Estate Regulatory Authority, Gurugram regarding withdrawal from the RERA account, the real estate project's bank account directions 2019 shall be strictly followed. The engineer/architect/chartered accountant shall be engaged by us out of the panel if prepared by the authority and shall be paid at the specified rate.

We further undertake that we shall get the accounts audited within six months after the end of every financial year by a chartered account in practice.

We further undertake that statement of accounts duly certified and signed by the chartered accountant shall be submitted to the authority with a verification that the amounts collected for a particular project have been utilized for that project only and withdrawals have been in proportion to the percentage of the completion of the project, within one month from the date of certificate issued by the chartered accountant.

We further undertake to produce statement of accounts along with amounts withdrawn and statement of accounts for every quarter within 15 days after the end of the quarter.

3. Promoter's Free Account for the Project: The 'promoters free account' means an account wherein the residual amount after depositing 70%or more (if directed by the authority in special circumstances) of the amount realized from the allottees in RERA account is deposited.

We further undertake that no lien shall be created on the master account as well as RERA account by the promoter.

We further undertake that we have entered into an understanding/agreement with the authorized signatory/Manager of the bank and authorized the bank to transfer 70% amount in the RERA Account and 30% in the Free Account as and when the amount is received in the Master Account.

We further undertake that RERA may in special circumstances, direct the bank to transfer more than 70% amount in the RERA Account which may go upto 100% in certain eventualities and there may be a situation where some additional amount has to be deposited by the promoter.

In case of on-going projects total amount realized from the allottees of the sold inventory 70% of the total amount shall be deposited in the RERA account minus the expenditure after adjustment of expenditure paid and incurred on land and construction work.

We further undertake that in case the expenditure paid and incurred is more than the deficit amount the same shall be deposited by the promoters from their own resources.

We further undertake that RERA shall have right and the authority to call for information not only of Master Account, RERA Account but also from the Free Account as and when affairs of the promoters are under investigation of the authority.

DEPONENT

Verification:

This affidavit is further conceded and agreed to so long in respect of provisions where obligations of the banks have been created.

DEPONENT

Signed by me

Authorized signatory/

In witnesses thereof:

1. __________________

2. ___________________

Bank's Undertaking

As per the understanding/agreement between ……………(the company) and …………(the bank), I, the Bank Manager/authorized signatory undertakes to ensure that the bank shall transfer 70% amount in the RERA Account and 30% in the Free Account as and when the amount is received in the Master Account. I shall also ensure the compliance of statutory provisions of RERA, 2016 in operation of these bank accounts.

Signed by Bank Manager/authorized signatory

57064—C.S.—H.G.P., Chd.