Rera finance module - sandeep jhunjhunwala fca llb

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Module 3: Finance related aspects under Real Estate (Regulation
and Development) Act 2016 & Karnataka Real Estate (Regulation
and Development) Rules 2017
Presented By: Sandeep Jhunjhunwala, FCA, LLB

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Presentation Overview
Summary
Impact on Pricing
Decoding carpet area
Insurance
Project account under RERA
Pre-withdrawal certification
Mechanics for cash flow
Managing certificates under RERA
Annual Audits
Quarterly updates
Workshop on RERA
Sandeep Jhunjhunwala
FCA, ACS, LLB, B. Com (H)

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Impact on Pricing
Content Cost of capital would go up (may be a short-term trend)
– No recourse to interest free liquidity of the upfront payments received on pre-launches etc
– Developers may look for equity (or mezzanine credit - mix of debt and equity) rather than structured
debts to finance buying of land as paying interest may get tougher (with the new condition of selling
units after project approvals + Withdrawal related restrictions)
– Lease Rental discounting (LRD) could go up
– Debt product offering by Banks may change
– Stressed Balance sheets
– Operating cost of the developers would increase
Sale on the basis of carpet area alone would necessitate change in pricing policies etc
Need to relook at Stamp Duty rates and premium Floor Space Index (FSI) rates on carpet area basis
Developers may also collect likely penal costs indirectly from consumers
Added cost of compliances may also indirectly impact pricing:
– Disclosures (which was hitherto done only by listed entities)
– Registration costs
– Insurance
– Structural defect liability period
– Ongoing compliance costs
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Decoding Carpet Area
Carpet Area: Net usable floor area in a Building/
Apartment. Simply put, this is the area on which carpet
could be laid out. Includes all rooms like living room,
bathrooms, bedroom, kitchen, utility etc within an
apartment.
Built up area (or Plinth Area): Capet Area + Areas covered
by inside and outside walls (thickness), balconies and
verandahs attached to the unit for exclusive use
Super Built up Area (or saleable area in pre RERA regime):
Built up Area + Proportionate share of common areas such
as reception, corridors, lobbies, staircases, lift/ elevator
shaft, generator/ electrical rooms, pump rooms, gas banks,
garbage rooms, play area, pool and clubhouse, garden,
gymnasium etc (Parking is not included and charged
separately)
Post RERA, one can see the
carpet area, external
walls+Balconies and share
of common area in the
pricing document. Pricing
has to be made only on the
basis of carpet area, the
definition of which is slightly
tweaked under RERA.
However, property tax
continues to be paid
considering the super built-
up area of the apartment.
Even stamp duty and
registration charges are
calculated on super built-up
area. These aspects needs
to be looked at by the local
civic authorities.
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Workshop on RERA
(k) "carpet area" means the net usable floor area of an apartment, excluding the area covered by the external
walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but
includes the area covered by the internal partition walls of the apartment
Explanation: For the purpose of this clause, the expression "exclusive balcony or verandah area" means the area of
the balcony or verandah, as the case may be, which is appurtenant to the net usable floor area of an apartment,
meant for the exclusive use of the allottee; and "exclusive open terrace area" means the area of open terrace
which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allottee

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Workshop on RERA

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Workshop on RERA

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Workshop on RERA

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Workshop on RERA

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Workshop on RERA

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Workshop on RERA

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Workshop on RERA

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Insurance under
RERA
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Insurance under RERA
Content RERA, now, by virtue of section 16, requires insurance in respect of (i) Title of land and building, (ii)
Construction of the real estate project
Issue of ownership/ title is a large-scale problem in the real estate market
Maxim of law "no one can give better title than what he has" (nemo dat quod non habet) is the basis on
which most of the title disputes are formed - A defective title holder cannot pass on a valid title to his buyer
Title insurance is premeditated to shield the interest of the owners, investors including but not limited to
lenders against any shortcoming in the title to a property
Title insurance is an insurance of indemnity and unlike other insurances, it has a retrospective effect. This
means, the title insurance indemnifies the insured against all the loses and claims that are suffered by the
insured as a result of defect in the title of a property (of which the insured was not aware on the date of the
policy) even before the date of the policy.
Major reasons why insurance companies have resisted developing the title insurance policy product:
- Volume of title related swindles are numerous
- Legal redressal for title disputes is sluggish
- Substantial costs involved in conducting land due diligence before issuing policy
- Lengthy and a time-consuming process of inspection of land records, necessary to ascertain if there is
any encumbrance (problem is that unlike the UK and the US, where the land records are digitised, in
India, land records are not easily accessible due to lack of digital infrastructure)
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Insurance under RERA
Content Industry trackers mention that annual premium could be priced at about 0.1 percent of the land value,
because of which property price could eventually go up
Premium for the coverage is likely to be based on the Gross Developed Value (which includes value of
land, cost of construction and profit margin of the Developer),
Policy is likely to be long-term (ranging between 5-12 years)
Initially, the premium would be paid by the developer, but after receiving the conveyance from the Builder,
the Association of allottees would be liable to pay for the premium payment
While US-based agency Marsh is already in the market, the State Bank of India recently announced its land
title insurance product along with other insurance companies such as HDFC Ergo & New India Assurance
Press articles suggest that Insurance companies are in discussions with Maharashtra Real Estate
Regulatory Authority (MahaRera) to fix a premium on land title insurance products. It is likely that land title
insurance will soon be made mandatory for the registered developers in Maharashtra.
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Project account
requirement under RERA
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Project Account under RERA
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70 percent of the amounts realized
from the project shall be deposited in a
separate account (not an escrow
account - confirmed by FAQs) in a
scheduled bank and that it would be
utilized only for cost of construction
and land cost
DECLARATION
BY DEVELOPER
Restriction
on usage of
funds
Developer mandated to deposit the
funds collected from the allottees
in a separate bank account and
any withdrawal from the separate
bank account would have to be
certified by an Engineer,
Architect and a Chartered
Accountant* that the withdrawal is
in proportion to the percentage of
completion (PoC) of the project
Further, mandatory audit of
accounts within 6 months from the
end of FY - Auditor to verify and
specifically certify usage of funds
as per PoC method
The Pre-withdrawal certificate needs to be signed by 3 professionals. The CA will have to rely on the Architect and Engineer
for PoC. The Architect and Engineer in turn would have to rely on the CA to certify withdrawal numbers. What if there is no
overall collective consensus?
Certain local statutes such as the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management & Transfer) Act, 1963 had a
similar provision that required the promoter to maintain a separate bank account for the receivables from the project, which was not implemented in practice by the
promoters, who considered funds received from allottees of various projects as fungible
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70 percent condition – An illustration
Content Cost Assumptions
Land cost 20
Construction cost 20
Overheads, Interest, Others 30
Project Cost 70
Sale Assumptions
Land 50
Construction 50
Sale value 100
Payment and Construction Schedule
Booking
Instalment % Completion
10% 0
1st Milestone 25% 20%
2nd Milestone 25% 40%
3rd Milestone 25% 70%
4th Milestone 10% 85%
Possession 5% 100%
Particulars
Cumulative
cash flow
Amount
that needs
to be
deposited
(70%)
% completion
X Project cost
(cumulative)
Retentions
(Restricted
Cash)
Booking 10.00 7.00 0 7.0
Instalment 1 35.00 24.50 14.0 10.5
Instalment 2 60.00 42.00 28.0 14.0
Instalment 3 85.00 59.50 49.0 10.5
Instalment 4 95.00 66.50 59.5 7.0
Possession 100.00 70.00 70.0 0
How will this work in JD arrangements (Revenue
as well as Area sharing)?
Float - Collateral for other projects? 70 percent
account is a no-lien account
*Few states including Maharashtra have clarified that marketing related costs
could not be considered for withdrawal from the 70 percent account. The rules in
Karnataka defines construction cost to mean cost incurred towards onsite and
off-site expenditure for the development of the real estate project. Marketing
costs, could, therefore, be considered eligible for the purpose of withdrawal from
the 70 percent account in the state of Karnataka (though technically evaluating,
marketing costs are incurred towards "selling" and not "development" of real
estate project
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Components of cost (Rule 5 – Karnataka RERA
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LANDCOST
Costs incurred by the Promoter for
acquisition of ownership and title
of the land parcels for the real
estate project as an outright
purchase lease etc or the Guidance
value in accordance with Section
45-B of the Karnataka Stamp Act
1957 relevant on the date of
registration of the real estate
project, whichever is higher
Amount paid for acquisition/
purchase of TDR etc
Amount paid to the competent
authority for project approval, no
objection certificates, stamp duty,
transfer charges, registration
charges, conversion charges,
change, taxes, statutory payment
to State and Central Government
CONSTRUCTIONCOST
All such costs, incurred by the
Promoter towards on-site and off-
site expenditure for the
development of the real estate
project including payment of taxes,
fees, charges, premium, interest
etc to any competent authority, or
statutory authority of the Central
Government or State Government,
including interest, paid or payable
to any financial institutions,
including scheduled banks or non-
banking financial companies etc
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Content Format of certification not yet prescribed by the regulators in Karnataka (drafts were available for sometime)
States such as Maharashtra, Madhya Pradesh, Gujarat, Andhra Pradesh etc have notified formats
Few states such as Andhra Pradesh has an additional requirement for uploading the certificatesissued by
professionals (CA, Engineer and Architect) certifying Percentage of Completion (PoC) of real estate project
on to the RERA portal, whereas other states such as Maharashtra have clarified that such certificates be
maintained by the Promoter and not submitted to Banks or Authorities
Maharashtra RERA – Circular No 5/2017 dated June 28, 2017 and Circular No 7/2017 dated July 4,2017 –
provide guidance on CA certificates
Does the Developer need to submit the certificates to Banker or retain with him for records/ audit?
– Maharashtra Circular No 3/2017 dated June 7,2017
– Promoter required to submit self-declaration to the Bank on a quarterly basis confirming the abidance
to 70:30 rule
– Certificates to be retained by the Promoter and not to be filed with the Banks/ Regulators
Certificates issued by CA, Engineer and Architect available for public view. Even the certificate of
practice or certificate of membership of CA, Engineer and Architect issuing the certificates could be
viewed by the public as a part of project details. In the absence of any prescribed formats,
professionals have flexibility to adopt/ design formats until the time such formats are prescribed by the
regulators (however this may lead to ambiguities)
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Pre-withdrawal certification: Few positions
Content Few important aspects on computation ofPoC:
– Format of certification? Karnataka has no specified format
– PoC on Accounting Principles (CA)/ Physical progress (Architect &Engineer)?
documents such as purchase invoices etc may be examined
– Percentage of Completion (PoC) to be considered including land cost or excluding that (AS-7/ Ind-AS-
11/ ICDS-III/ Draft ICDS on real estate transactions on constructioncontracts)?
– PoC – Project wise/ Tower wise (if multiple towers in same phase)?
– PoC to be calculated with reference to a particular project (or share of project) in cases where a project
is vivisected into multiples on account of issues such as landowners vis-à-vis owners share etc.
Reference to estimated total cost of the registered project has to be made even if a registered project
is a sub-set of the entire project
– Fund for meeting customer refunds for cancelled units? Maharashtra Rules permit 70 percent
withdrawal under this scenario (Circular No 7/ 2017 dated July 4, 2017). Karnataka RERA Rulesare
silent on this aspect
– PoC varies amongst 3 professionals – CA, Architect and Engineer – Based on the Principle of
Prudence, CA should consider the lower PoC (fact specific though) – CA should collect/ consider/ rely
upon certificates issued by the Engineer and Architect, while issuing pre-withdrawal certificate (best
practices)
– For verification of construction costs while issuing certificates, GST returns and otherrelated
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Pre-withdrawal certification: Few positions
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Whether the quantum of withdrawal would be determined by applying PoC so determined with the balancein
70 percent (project designated) account OR by applying PoC with total estimated cost of the project
A plain reading of the section implies that the quantum of withdrawal should be determined by applying the
percentage of completion so determined with the balance available in 70 percent account
Based on the intent of Section 4(2)(l)(D) of the Act, it appears that the reason for creating the rule that 70%
of the receipts from customers will be pooled into a separate bank account is to ensure that the same is used
only for project cost purposes. The certification mechanism (Architect/ Engineer/ CA) also aims at
safeguarding this aspect that the withdrawals will be allowed only for meeting the project costs. Therefore, if
based on the certifications provided, if the project costs incurred till date based on certified project
completion justifies a higher withdrawal from pooling A/c, then that should be allowed since it is in line with
the intent of the 70% A/c mechanism. However, given the divergent views available, the contrary view (as
given in under Madhya Pradesh rules) cannot be ruledout.
State Position on withdrawal from the project receiptsaccount
Karnataka No clarity/ guidance
Maharashtra Costs incurred till date (based on certified project completion
percentage) - Draft released by Karnataka regulators followed this
Madhya Pradesh Lower of:
A. Costs incurred till date (based on the certifiedPoC)
B. % of completion (as per certificate) * Amounts lying in theproject
receipts account (project receipts andreceivables)
Gujarat Costs incurred till date (based on the certified project completion
percentage)
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Mechanics for cash flow
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Mechanics for cash flow – Option 1
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Collections from Customer
Escrow
Account
INR 100
INR 70 (70%)
Transfer of required amount (from the balance
30%) to escrow account as per the terms of lender
agreements
1
2 3
Based on PoCM,
amount has to be
transferred to
escrow account /
operation bank
account
4A
Construction/
Operation Bank
account*
4B
Separate RE
project
designated
bank account
Current
Account
maintained by
Builder
*Instead of this bank account, it can be
credited in the current account
mentioned in the top (green colour)

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Mechanics for cash flow – Option 2
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Collections from Customer
Lenders
Escrow A/c
INR 100
INR 70 (70%)
1
2
3
Based on PoCM, amount has to
be transferred to escrow account/
operation bank account4B
Construction /
Operation Bank
account
Separate RE
project
designated
bank account
Lenders A/c
INR 30 (30%)
4A

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Cash flow – Master sheet
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(100-(100*20%))
INR 10
(100-(100*70%)- 20) (100*70%)
Non RERA
Project
Builder
Share
Land owner
Share
INR 100
INR 100
INR 100
INR 40
INR 80 INR 70
INR 70
INR 100
INR 70
INR 70
INR 40
INR 160 INR 200
Collections from
Customer
RERA Project
Builder
Share
Land Owner
Share
Escrow
Account
Lender
Construction /
Operation Bank
account
(Operated by
Builder)
RERA Special
Bank account
(Operated by
Builder)
Ordinary Bank
account
(Operated by Land
Owner)
Ordinary Bank
account
(Operated by
Builder)
1 1
2
3
5
6
8
7
6
10
9
4A 4B
INR 100
(200*20%) as per
Lender agreement
(100*70%) INR 30
(100*30%)
INR 200 INR 200
INR 100 INR 100 INR 100 INR 100

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Change of Project Bank Account with RERA
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Managing certificates under
RERA
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Form No Certificate Header Section and Rule Reference Certification On
Form - 1 Chartered Accountant's
Certificate (Post
Registration)
Section 4(2)(l)(D), Rule 4(5)
and Rule 5
Physical and financial progress of the
project is in accordance with that of
RERA Registration application details
Form - 2 Architect’s certificate (Post
Registration)
Estimated Cost for each of the
building/ Wing of the Real Estate
Project
Form - 3 Engineer’s certificate (Post
Registration)
Physical progress of the project in
accordance with that of RERA
registration application
Certifying Estimated Cost of the Real
Estate Project
Form - 7 Chartered Accountant's
certificate (for Quarterly
update)
Section 4(2)(l)(D) Certification of percentage of
completion/ money spent as per books
of accounts
Verified the sanctioned drawing. The
work is as per the sanctioned drawing
given by the Competent Authority with
Sanctioned Drawing No
* As per draft formats available on Karnataka RERA portal for a brief period, subject to change at a later stage

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Form No Certificate Header Section and Rule
Reference
Certification On
Form - 8 Architect's Certificate
(for Quarterly Updates)
Satisfied that the physical progress of the
project in accordance with that of RERA
Registration application details
Certificate of Percentage of Completion
of Construction Work of project

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Reference
Certification On
Form - 9 Engineer’s Certificate
(for Quarterly Updates)
Satisfied that the physical progress of the
project in accordance with that of RERA
Registration Application details.
Certificate of Percentage of Completion
of Construction Work of project
The Estimated Cost Incurred till date is
calculated at Rs ______________
The Balance Cost of Completion of the
Civil, MEP and allied works of the
Building(s) of the subject project to
obtain Occupation Certificate /
Completion Certificate from _____

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Reference
Certification On
Form - 10 Annual Report on Statement
of Accounts (On the letter
head of Chartered
Accountant who is Statutory
Auditor of the Promoter’s
Company/ Firm)
Completed ________% of the project
Amount collected during the year for this
project is Rs. ___________ and amounts
collected till date is Rs __________.
Amount withdrawn during the year for
this project is Rs _____and amount
withdrawn till date is Rs ________
utilized the amounts collected for project
only for that project and the withdrawal
from the designated bank account(s) of
the said project

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Annual Audit under
RERA
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Annual Audit
Content Audit under RERA – Is this another compliance or does this get subsumed under StatutoryAudit (under
CompaniesAct 2013) or TaxAudit (under Income TaxAct 1961)?
– Likely that it is another audit as it is mandated byRERA: Audit - Project registration wise?
– First RERA audit to be completed by September 30, 2018 (6 months from the end of FY 2017-18 ie
the first year of RERAimplementation)
– It shall be verified during audit that - (i) Amounts collected for a particular project have been utilized
for that project, and (ii) Withdrawal has been in compliance with proportion to PoC of the project
– Format of Audit report notavailable – Karnataka has notified draft formats – to be done by the
Statutory Auditors – Drafts currently not available for view on the portal, may get revised
– Would RERA audit be subject to certain turnover threshold (such as in tax audit) or would it be
applicable to all developers/ promoters, irrespective of any monetary thresholds?
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Quarterly RERA reporting
compliance for registered
projects in Karnataka
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Provisions of the Central Act
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The promoter shall, upon receiving his
Login Id and password under clause (a)
of sub-section (1) or under sub-section
(2) of Section 5, as the case may be,
create his webpage on the website of the
Authority and enter all details of the
proposed project as provided under sub-
section (2) of Section 4, in all the fields
as provided, for public viewing, including-
(a) details of the registration granted by
the Authority;
(b) quarterly up-to-date the list of
number and types of apartments or
plots, as the case may be, booked;
(c) quarterly up-to-date the list of
number of garages booked;
(d) quarterly up-to-date the list of
approvals taken and the approvals
which are pending subsequent to
commencement certificate;
(e) quarterly up-to-date status of the
project; and
(f) such other information and documents
as may be specified by the regulations
made by the Authority.
Section 11
(1) of RERA
The promoter shall prepare and maintain
all such other details as may be
specified, from time to time, by
regulations made by the Authority.
Section 11
(6) of RERA
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Penalty for non-compliance
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he shall be liable to a
penalty which may extend
up to five percent of the
estimated cost of the real
estate project as
determined by the Authority
If any promoter
contravenes any other
provisions of this Act,
other than that provided
under Section 3 or
Section 4, or the rules or
regulations made
thereunder
Section 61 of RERA
Additionally, there is a risk that the registration already granted may be revoked for not complying with the provisions of the Act. This
could indirectly entail freezing of bank accounts, getting listed as a defaulter and other related repercussions.
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Provisions under Karnataka RERA Rules
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(iv) Status of approvals:
(a) Approval received;
(b) Approvals applied and expected date of receipt;
(c) Approvals to be applied and date planned for application; and
(d) Modifications, amendment or revisions, if any, issued by the competent authority with regard to any license,
permit or approval for the project.
(iii) Status of the project:
(a) Status of construction of each building with photographs;
(b) Status of construction of each floor with photographs; and
(c) Status of construction of internal infrastructure and common areas
with photographs.
(D) The promoter shall upload the
following updates on the webpage
for the project, within fifteen days
from the expiry of each quarter:
(i) list of number and types of
apartments or plots, booked
Rule 15(D) of Karnataka
RERA Rules
(ii) list of number of garages
booked
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Quarterly updates
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Quarterly Updates
• As of now, RERA portal in Karnataka does not provide for online updation – Intimation with respect to updates could
be filed in hard copy to avoid any penalty at a later stage (Please refer Annexure for a template)
• Physical letter could be filed with the Authorities (or an email) providing all such details, to avoid penal implications at
a later stage (and to avoid haste in case of short notice) – Recommendatory and not Mandatory
• Guidance available under Circular No 8/ 2017 dated July 17, 2017 and Circular No 14/ 2017 dated November 1, 2017
by the regulators in Maharashtra (could have a persuasive value only in Karnataka)
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Compliance Mechanism
Content Below mentioned data/ information may need to be collated in case of apartment projects:
- Prospectus/ Brochure
- Copy of Advertisements (Digital/ Newspaper etc)
- Tower wise details such as name of the tower, No of floors, floor wise number of units, No of
Basements, Garages, Open and Closed parking etc – Percentage of completion, tower/ floor wise
- Floor wise unit numbers and inventory details (carpet area, built-up area etc)
- Status of completion of applicable civil work for the project (with related photographs) and estimated
time of completion for each applicable civil work (categories including sub-structure, super-structure,
masonry work and interior/ finishing work) – Reference could be made to registration application
- Status of completion of applicable external and internal infrastructure available in the project and
related photographs (say, water supply, sewage and drainage system, solid waste management etc) –
Reference could be made to registration application
- Financial details such as amounts collected during the quarter, amount withdrawn from RERA
designated project account during the quarter etc – These details would form part of certificate to be
issued by a Chartered Accountant in 'Form-4' for which details of construction and approval related
expenses etc may also be required to determine Percentage of Completion (PoC) of the project
- Details of TDR purchased, if any (TDR sanction area, sanctioning authority, purchase cost, TDR
purchase deed etc)
- Details of litigation on the project (type of case, forum, copy of order, present status etc)
- Details of modification to the project plan, if any (Approving Authority, approval document including
approval of 2/3rd allottees, modified plan etc)
- Details of the Association of allottees (applicable if majority of booking is done – Proviso to Section
11(4)(e) of the Act
- Status of each approvals/ NOCs required for the project
- Copies of certificates signed by Architect, CA and Structural Engineer for withdrawal purposes
* Indicative, based on the user manual temporarily issued by Karnataka RERA Authorities
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Compliance Mechanism
Content Below mentioned data/ information may need to be collated in case of plotted development projects:
- Prospectus/ Brochure
- Copy of Advertisements (Digital/ Newspaper etc)
- Plot details ie total number of plots category wise
- Status of completion of applicable civil work for the project (with related photographs) and the
estimated time of completion for each applicable civil work (formation of footpath, power supply work
etc) – Reference could be made to registration application
- Details of common areas that is to be relinquished to Local Authority/ Planning Authority
- Financial details such as amounts collected during the quarter, amount withdrawn from RERA
designated project account during the quarter etc – These details would form part of certificate to be
issued by a Chartered Accountant in 'Form-4' for which details of construction and approval related
expenses etc may also be required to determine Percentage of Completion (PoC) of the project
- Status of each approvals/ NOCs required for the project
- Details of litigation on the project (type of case, forum, copy of order, present status etc)
- Details of modification to the project plan, if any (Approving Authority, approval document including
approval of 2/3rd allottees, modified plan etc)
- Details of the Association of allottees (applicable if majority of booking is done – Proviso to Section
11(4)(e) of the Act
- Copies of certificates signed by Architect, CA and Structural Engineer for withdrawal purposes
* Indicative, based on the user manual temporarily issued by Karnataka RERA Authorities
Workshop on RERA

Contents
Summary
Content
Page 43
Roles of various teams in terms of data collation
Content
Finance
•Financial details
such as amounts
collected during the
quarter, amount
withdrawn from
RERA designated
project account
during the quarter
etc – These details
would form part of
certificate to be
issued by a
Chartered
Accountant in
'Form-4' for which
details of
construction and
approval related
expenses etc may
also be required to
determine
Percentage of
Completion (PoC)
of the project
•Managing all other
information/ data
required for
certification
Legal
•Details of litigation
on the project (type
of case, forum,
copy of order,
present status etc)
•Details of the
Association of
allottees (applicable
if majority of
booking is done –
Proviso to Section
11(4)(e) of the Act
•Status of each
approvals/ NOCs
required for the
project
•Details of TDR
purchased, if any
(TDR sanction
area, sanctioning
authority, purchase
cost, TDR purchase
deed etc)
Design
•Details of
modification to the
project plan, if any
(Approving
Authority, approval
document including
approval of 2/3rd
allottees, modified
plan etc)
Operations
•Status of
completion of
applicable civil work
for the project (with
related
photographs) and
estimated time of
completion for each
applicable civil work
•Status of
completion of
applicable external
and internal
infrastructure
available in the
project and related
photographs (say,
water supply,
sewage and
drainage system,
solid waste
management etc)
Marketing/Sales/CRM
•Prospectus/
Brochure
•Copy of
Advertisements
(Digital/ Newspaper
etc)
•Tower wise details
such as name of
the tower, No of
floors, floor wise
number of units, No
of Basements,
Garages, Open and
Closed parking etc
•Floor wise unit
numbers and
inventory details
(carpet area, built-
up area etc)
Workshop on RERA

Contents
Summary
Content
Page 44
Quarterly Report on Statement of Accounts
Content
Workshop on RERA

Contents
Summary
Content
Page 45
Annual Report on Statement of Accounts
Content
Workshop on RERA

Contents
Summary
Content
Page 46
Key points in relation to certificates
Content
Form-4 [Quarterly Report on
Statement of Accounts]
• To be issued by the Statutory
Auditor of the Promoter entity
(Company/ Firm, as the case
may be)
• 'Project-wise' and not an 'Entity-
wise‘ certificate
• Para 1 of the certificate gives
reference to Real Estate
(Regulation and
Development)(Registration of
Real Estate Projects,
Registration of Real Estate
Agents, Rates of Interest and
Disclosures on Website) Rules,
2017 Karnataka – No such rules
exist!
Form-5 [Annual Report on
Statement of Accounts]
• To be issued by the Statutory
Auditor of the Promoter entity
(Company/ Firm, as the case
may be)
• 'Project-wise' and not an 'Entity-
wise‘ certificate
• Para 1 of the certificate gives
reference to Real Estate
(Regulation and
Development)(Registration of
Real Estate Projects,
Registration of Real Estate
Agents, Rates of Interest and
Disclosures on Website) Rules,
2017 Karnataka – No such rules
exist!
Other certificates enabling
withdrawal from RERA
designated bank account
• Form-1 (Architect’s certificate for
withdrawal of money from
designated account)
• Form-2 (Engineer’s certificate
for withdrawal of Money from
Designated Account- Project
wise)
• Form-3 (Chartered Accountant's
certificate for subsequent
withdrawal of money)
• All these forms could be issued
by professionals having license
no/ membership from their
respective governing institute
Workshop on RERA
FCA, ACS, LLB, B. Com (H) * As per draft formats available on Karnataka RERA portal for a brief period, subject to change at a later stage

Contents
Summary
Content
Page 47
Intimation to RERA Authorities on quarterly updates
Annexures
Workshop on RERA

Contents
Summary
Content
Page 48
Content
Overall reference points for
Finance Team
ContentContent
Workshop on RERA

Contents
Summary
Content
Page 49
Overall reference points for Finance Team
Content
Certification (pre and post registration)
Pricing re-calculation based on RERA norms/ Cash flow Analysis
Commercial terms agreed with vendors/ land owner/ lenders/ banks
RERA Audits – As RERA is applicable from May 1 of 2017, RERA audit should apply for FY 2017-18 and some
guidance on audit procedures should be available before September 31, 2018 (ie the audit completion date)
Ongoing compliance/ advisory support – updation of records on RERA website (including changes in
estimated costs etc)
Insurance
Workshop on RERA

Contents
Summary
Content
Page 50
Contents
Summary
Content
Page 49
OPEN HOUSE & DISCUSSIONS
THANK YOU
Sandeep Jhunjhunwala, FCA, LLB, ACS, B.Com (H)
E: Mailboxofsandeepj@gmail.com
M: +91 97401 55469
The views in this presentation are personal views of the Presenter. The information contained is of a general nature and is not intended to address the circumstances of any particular
individual or entity. Although, the overall endeavor is to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or
that it will continue to be accurate in the future. This presentation is meant for general guidance only and no responsibility for loss arising to any person/ entity acting or refraining from
acting as a result of any material contained in this presentation will be accepted. It is recommended that professional advice be sought based on the specific facts and circumstances. This
presentation does not substitute the need to refer to the original pronouncements.

PROFILE - SANDEEP JHUNJHUNWALA
Sandeep is a Fellow member of the Institute of the Chartered Accountants of India and an Associate Member of
the Institute of Company Secretaries of India. He also holds Bachelor's degrees in Law and Commerce. Sandeep
has more than 11 years of experience in consulting in varied fields of tax and regulatory matters.
He specialises in advising clients with tax optimised business and operational structures. He has worked on a
number of leading multi-national companies in information technology, communication, real estate, entertainment,
pharmaceuticals, e-commerce and automotive sectors and has been extensively involved in tax and regulatory
advisory, compliance support, planning opportunities and litigation support on direct tax and regulatory matters.
He has been a speaker/ panelist on tax and regulatory matters at various forums such as NASSCOM,
ASSOCHAM, CII, BCIC, NAREDCO, CREDAI etc, industrial/ trade bodies such as TiE, Indo-American Chamber of
Commerce, Indo-Italian Chamber of Commerce, Royal Institution of Chartered Surveyors (RICS), various
Government recognised start-up incubators, Bangalore chapters of the ICAI, ICSI & ICMAI and leading Business
Schools & Engineering/ Commerce colleges in Bangalore. He is also a visiting faculty for taxation at the Bangalore
Chapters of the ICAI and ICSI.
Recently, he has been awarded honorary memberships by the National Real Estate Development Council
(NAREDCO) and Builders and Real Estate Developers Association of India (BREDAI) and also nominated for
non-standing committees of the ICAI including its Career Counselling Committee. He is also a mentor for the
Startup India programme of the Government of India. Sandeep also serves as a member in Direct Tax and
Representation committees of Karnataka State Chartered Accountants Association (KSCAA).
E: Mailboxofsandeepj@gmail.com
M: +91 97401 55469

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