Annual Schedule of Rates – ASR Value(as mentioned in CA Certificates for updates under RERA)

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Annual Schedule of Rates – ASR Value (as mentioned in CA Certificates for updates under RERA)

ASR is a government tool to find out the minimum value of a property at different locations based on various market factors. In Delhi, it is called Circle Rate whereas; in Mumbai, it is known as Ready Reckoner Rate (RR rate).

Following are some of the key aspects about ASR that property buyers should know:

- Normally, ASR is typically lower than the prevailing market rate of the property in a location;

- The government calculates the minimum stamp duty and registration charges based on the prevailing ASR value in the area;

- ASR is reviewed from time-to-time and the government tries to keep it close to the prevailing market rate in the area.

"The Annual Schedule of Rates is prepared to assess the market value of a property to calculate the stamp duty as applicable on the said property. These rates are determined by the Stamps and Registration Department of the state of Maharashtra. The ASR helps individuals find the official rates for properties in a particular area," explains senior faculty, Vidya Bhagwat, faculty department, REMI.

Experts point out various terms of ASR rates as known in the key cities across India:

- Circle Rate ­ Delhi, Bhubhaneshwar;

- Guidance Value ­ Bengaluru, Hyderabad;

- Guideline Rate (Market Value) ­ Chennai;

- Guideline Rate ­ Kolkata;

- Ready Reckoner Rates ­ Mumbai;

- Jantri Rates Gujarat.

ASR impacts the property prices:

"In cities like Bengaluru and Mumbai, the ASR is now very close to the actual prevailing market rates in most areas and for most asset classes. Thus, they are a good benchmark for the buyer. However, buyers should note that rates will vary from property to property depending on the quality of specifications, micro-location characteristics, reputation of the developer, payment terms, etc," says Amit Oberoi, head of valuation and advisory at Colliers. He further goes on to add, "It is necessary to set a realistic ASR level, so that the government can realise the actual revenue that is used for public good. Also, the government should consider lowering the stamp duty and registration rates, so that there is a greater disclosure of transaction values."

 

Written by Vinay Thyagaraj,  is a Chartered Accountant and a Law Graduate, founder partner at M/s. Venu & Vinay, Chartered Accountants, Bengaluru, has over 20 years of experience in Business Consulting, Structuring and Taxation. Travelled across south Indian states to deliberate, discuss, present technical papers on RERA. Presented more than 100 technical sessions on RERA to Industry Associations, Professionals, home buyers association, Law universities and for public at Large. He is also financial consultant at RERA Consultants LLP. He can be reachable on vinay@vnv.ca

 

Who Should issue Audit Report under RERA

Who Should issue Audit Report under RERA

Background and Provisions of the Act

 

Certificate by a Chartered Accountant is to be issued with set of objects and intentions with an intent to express the professional opinion or state the facts based on the information, explanation, documents received from the promoter.

 

Proviso to Sec 4(2)(l)(D) of RERD Act having reference and requirement of CA Certificate – which is reproduced below -

 

2^nd Proviso - Provided further that 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:

 

3^rd Proviso - Provided also that the promoter shall get his accounts 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 utilised for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project

 

Chartered Accountant Certificates under RERA

 

Sl No	Certificate for	Act / Rule Ref	Certifying
1	On every withdrawal from project Bank Account	RERA Act –   2nd proviso to sec 4(2)(l)(D)	Withdrawal of money from project bank account is in proportion to the % of completion of the project
2	Annual Audit under RERD Act	RERA Act –   3rd proviso to sec 4(2)(l)(D)	1.       Amounts collected from Allottees for a particular project have been utilised for the same project and   2.      the withdrawal has been in compliance with the proportion to the % of completion of the project

 

 

What is the understanding of statutory Auditor as per RERA

 

1.      As per Sec 4(2)(l(D) proviso 3 mandates accounts shall be audited by a Chartered Accountant in practice.

2.      Act does not say whether Tax, Statutory or any other Chartered Accountant

3.      However, Regulations / Notification issued by State RERA Authorities have mentioned on the header of the format of certificate - Stating Statutory Auditor of the Promoter shall issue the Report

4.      Question is Who is Statutory Auditor?

5.      Is any Act defining Statutory Auditor? Whether Co's Act 2013 defines Statutory Auditor?

6.      If we Consider Statutory Auditor means the Auditor as per Co's Act 2013, if so, what about other than Co's. Say, Proprietor or Partnership or Housing Society?

 

7.      Considering the all the above facts, i am of the opinion that Auditor appointed under any Statute can certify the Accounts under RERA (may be Auditor as per Sec 139 of the Co's Act, Tax Auditor, GST Auditor etc) as long as Chartered Accountant holding Certificate of Practice (not an employee of the promoter, who is on Role of the promoter)

 

8.      RERA Regulators are differentiating the Chartered Accountant for issuance of a periodical certificate for withdrawal of funds based on % of Completion method -  hence Chartered Accountant issuing Certificate for withdrawal of funds shall be different for Issuance of RERA Audit Report under Proviso 3 to Sec 4 (2)(l)(D) of the RERA

 

 

Objective of RERA Audit Certificate by a CA  -

 

1.      Amounts collected from Allottees for a particular project has been utilised for the same project and   2.      the withdrawal has been in compliance with the proportion to the % of completion of the project

 

Note –

1)      Currently, the regulators in most of the states have a prescribed format.

2)      This certificate shall be issued by a CA holding COP

3)      CA to collect project financial information from the promoter.

4)      Collect estimated cost of the project, escalation if any and details thereon

5)      CA to collect and consider all professional certificates issued from time to time for withdrawal of the project.

 

This certificate shall be submitted to authorities and is a public document. It could be made available for viewing at the portal of the regulators in the respective states. The comments in this note are purely a matter of interpretation and not binding on any regulatory authorities.  Therefore, there can be no assurance that the regulatory authorities will not take a position contrary to our comments or views

 

Written by Vinay Thyagaraj,  is a Chartered Accountant and a Law Graduate, founder partner at M/s. Venu & Vinay, Chartered Accountants, Bengaluru, has over 20 years of experience in Business Consulting, Structuring, and Taxation. Traveled across south Indian states to deliberate, discuss, present technical papers on RERA. Presented more than 100 technical sessions on RERA to Industry Associations, Professionals, home buyers association, Law universities, and for the public at Large. He can be reached on vinay@vnv.ca

Kerala RERA Rules Kerala Real Estate(Regulation & Development) Rules, 2018 -

Kerala RERA Rules

Kerala Real Estate (Regulation & Development) Rules, 2018

 

Kerala has notified the Kerala Real Estate (Regulation and Development) Rules 2018 on 18^th June 2018 vide GO (P) No. 46/2018/LSGD and has constituted Kerala Real Estate Regulatory Authority on 5^th October 2019.

 

Sri. P.H. Kurian IAS (Retd) has assumes charge as Chairman and Adv.Preetha P Menon has assumed charge as member.

 

Authority has started the series of awareness program to educate the Promoters/Builders/Real Estate Agents, Allottees/Home buyers/consumers and various stake holders.

 

Application, forms, affidavits etc are published in the Kerala RERA Website for registration of Real Estate Projects and Real Estate Agent and guidelines there on.

 

This note will help the reader to understand the Kerala RERA Rules, applicability for Registration real estate project, documents, information required to file application for grant of registration, extension, revocation.

 

Details	Details
Official Kerala RERA Website	https://rera.kerala.gov.in/
Kerala RERA Office Address	Swaraj Bhavan, 5th Floor, Nanthancode, Kowdiar PO, Thiruvananthapuram 695003
Email	info.rera@kerala.gov.in
Filing of Application	Manual Filing / Submission till webportal is ready

 

 

 

Authenticated Copy – Rule 2('C) of Kerala RERA	Self-Attested copy of any document required to be provided
Registration of Real Estate Projects with Authority – Rule 3
Rule 3(1)	Application in Form A – in Triplicate For New Projects (means all Statutory Approvals and permits have been obtained on or after 1-5-2017)
Rule 3(2)	Application in Form A 1 – in Triplicate For Ongoing Projects (means Occupancy Certificate has not been issued as on 1-5-2017)
Registration Fee – Rule 3(4) Note - 1)     Project involving construction and sale of building, total registration fee = plot fee + buildings fee 2)     Floor Area – as specified in permit issued by competent authority	1)     By way of Demand Draft drawn on any scheduled Bank 2)     Fee Amount is as per the Table -   Type of Project Rs. Per Sq Meters Fees payable On Plots 10 Plot Area Building – Ongoing Projects – Form A1 25     Total Floor Area Building – New Projects – Form A 50 Building – Commercial or any other projects 100
List of Documents – Rule 3(5)	1)     All documents as per Sec 4(2) 2)     Form B (Sec 4(2)(l) Clauses A to F)
Withdrawal of Application Rule 3(6)	1)     Application for withdrawal shall made within 30 days of filing application for grant of registration 2)     Authority will retain 10 % or Rs.50,000 whichever is more towards processing fees 3)     Balance will be refundable within 30 days from such withdrawal
Rule 4 – Additional information and documents to be furnished -	1)     PAN 2)     Audited BS, ITR for preceding 3 years 3)     No of Parking Available 4)     Legal title Deed 5)     Details of encumbrance on Project Land 6)     Development Agreement / MOU
Rule 5 – Disclosure in case of Existing (ongoing) Project	1)     All documents as prescribed in Rule and Act 2)     Status of the Project and Extent of Completion 3)     Sold details - Size of the apartment in Carpet Area 4)     Sold details – area of plots

 

Rule – 6 Withdrawal of sums deposited in separate bank account – Sec 4(2)(l)(D)	1)     Land cost – shall be cost incurred by the promoter (whether outright purchase / lease charges etc) 2)     Construction Cost – cost incurred towards on-site and off-site expenditure for physical development of the project
Rule 7 – Grant of Registration of the Project	1)     Registration Certificate in Form C 2)     Rejection shall inform in Form D (however 15 days or such time may be provided to rectify the defect application before rejection)
Rule 8 – Extension of registration of Project	1)     Before expiry of 3 months prior to expiry of registration granted 2)     Fees – 50 % of registration fees 3)     Reason for such delay 4)     Documents 5)     Force majure – fees may be waived off 6)     Extensions maximum of 1 year
Rule 9 – Revocation of registration	As per Sec 7 of the Act

 

 

Rule 10 – Agreement for Sale	As per Annexure A
Rule 11 – Real Estate Agent Registration	1)     All Documents 2)     Application Form in Form G 3)     Fees a.      Individual Rs.25,000 b.     Non Individual Rs.2.50 Lacs
Rule 18 – Interest Rate, Timelines	1)     SBI PLR + 2 % 2)     Refund with in 45 days from the due date (AFS Clause 7.5)

 

 

 

 

 

Vinay Thyagaraj is a Chartered Accountant and a Law Graduate, founder partner at M/s. Venu & Vinay, Chartered Accountants, has over 18 years of experience in Business Consulting, Structuring and Taxation. Presented business, taxation technical papers and participated at various symposiums, forums. Regular speaker at various regional TV channels on financial matters, budget etc. Has been working on The Real Estate (Regulation and Development) Act 2016 since the inception of the Act with a view to understand financial, business impact of the Act on the organization and Industry, helping promoters to implement the best practices under RERA. Travelled across south Indian states to deliberate, discuss, present technical papers on RERA. Presented more than 100 technical sessions on RERA to Industry Associations, Professionals, home buyers association, Law universities and for public at Large. He is also financial consultant at RERA Consultants LLP

 

Responsibility of the Promoters / land owners in case of joint development under RERA -

Updates on RERA - Responsibility of the Promoters / land owners in case of joint development under RERA -

Karnataka RERA has issued various circulars and notifications during 2019-20. Below is the important for all the stake holders -

Sl No	Topic	Details
1	Responsibility of the Promoters in case of joint development	1.       Clarified that both the Landowner and Builder / developer is jointly liable for the functions and responsibilities specified in the Act in the same manner as the promoter who actually obtains building permissions and carries out construction   2.       Developer promoter shall register the project including the share of landowner promoter   3.       Developer promoter to monitor the transaction to be done by Landowner to comply with Sec 4(2)(l)(D) of the Act – financial management of 30/70   4.       Obligation and liabilities of all such (landowner / builder) shall be at par with each other   5.       Development agreement shall clearly specify the details of the rights and shares of each promoter. Same should be uploaded in K RERA Website   6.       Joint affidavit shall be uploaded (Developer and all Landowners)   7.       Developer is liable to provide the details of transactions carried out by the Landowner and shall ensure by asking to deposit 70 % of the sale proceeds to realized to the designated account of the real estate project.   8.       Developer shall comply with Rule 15 including quarterly update of the entire project (including landowner transaction)
		In case of any Joint development agreements entered, developer and landowner shall have clarity on various compliances under RERA starting from Registration of project, deposit of money in Project Designated bank account, operation of such bank account, withdrawal of money based on proportionate completion method.   It is important for the developer to communicate on regular basis on development on RERA and compliances there on. Collect information from Landowner in a standard format, which includes agreement entered, money realized, sale deed executed etc. Reporting of transaction of landowner to RERA is the responsibility of developer. Such information shall be included and considered while filing Quarterly Updates as per the Act and Rules   Standard Procedure shall set by the Developer in communication with the land owner, collection of details and reporting to authorities from time to time in order to comply with the Act and Rules.

 

Click here to download the circulars / notification https://rera.karnataka.gov.in/circularPage

Vinay Thyagaraj is a Chartered Accountant and a Law Graduate, founder partner at M/s. Venu & Vinay, Chartered Accountants. You can write on vinay@vnv.ca to seek more clarification