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The Maharashtra Real Estate Regulatory Authority (MahaRERA) has taken a proactive approach to addressing violations of its regulations by issuing show-cause notices to chartered accountants and contacting the Institute of Chartered Accountants of India. The regulatory body discovered instances where the same chartered accountant was acting as both the project auditor and statutory auditor, contrary to MahaRERA rules.
Under MahaRERA regulations, promoters are required to submit Form 3, certified by the project auditor, when withdrawing money from the bank. Additionally, they must provide a yearly statutory audit report prepared by a separate statutory auditor or accountant. It is mandatory for these roles to be performed by different individuals or firms to ensure transparency and accountability in the sector.
During the scrutiny of information submitted by promoters, MahaRERA officials identified discrepancies in the Unique Document Identification Number (UDIN) provided by the chartered accountants. This led to the discovery of regulatory violations, as both forms and certificates were submitted by a single chartered accountant.
To address these issues, MahaRERA has requested the Institute of Chartered Accountants to conduct training sessions to ensure that its members comply with the regulations of MahaRERA and the provisions of the Real Estate (Regulation and Development) Act.
Under Section 4(2)(1)(D) of the Real Estate Act, every promoter is required to deposit 70% of the funds received from customers in a separate account. Before withdrawing these funds at each stage of construction, the percentage of work completed, and expenditures must be certified by the project engineer, architect, and chartered accountant. Furthermore, the developer must update a statutory audit report on the MahaRERA website annually.
The MahaRERA's decisive actions against chartered accountants for regulatory violations aim to promote transparency and accountability in the real estate sector. This move is expected to encourage better adherence to guidelines, protect the interests of customers, and ensure that all stakeholders are held responsible for their actions.
In conclusion, MahaRERA's recent crackdown on regulatory violations demonstrates its commitment to fostering a transparent and accountable real estate sector in Maharashtra. By taking action against chartered accountants and encouraging better compliance with guidelines, MahaRERA aims to safeguard the interests of customers and stakeholders while promoting ethical practices in the industry. This initiative is likely to pave the way for a more responsible and reliable real estate sector in the region.
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