To ensure funds are spent on projects, H-Rera calls for annual audit of developers’ accounts

: To press for financial discipline in the realty sector, the Haryana Real Estate Regulatory Authority (H-Rera) has issued directions that promoters should get their

: To press for financial discipline in the realty sector, the Haryana Real Estate Regulatory Authority (H-Rera) has issued directions that promoters should get their accounts audited within six months after the end of every financial year.

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Developers have also been asked to produce a statement of accounts duly verified by a chartered accountant so that it is ensured that collection as well as expenditure of funds is done as per the rules prescribed by the Rera Act, said Dr KK Khandelwal, chairman, H-Rera, Gurugram.

The purpose of this move is to ensure that amounts collected for a project are utilized for the same project and withdrawal is in compliance with the proportion to the percentage of the completion of the project, officials said.

“We want to ensure that money collected for a project is fully utilized for its construction. The promoter can use 70% money for buying land and construction, but the remaining 30% can also be only used for related activities like paying bank loan, advance for construction and related activities alone,” said Khandelwal, adding that the authority want to ensure that every rupee collected from buyers is utilized for the project and nothing else.

The audited statement of accounts should be submitted to the authority by September 30, said the authority. The non-submission of such account details will be considered a violation of the rules and the developers concerned shall be liable to face action, it added.

The H-Rera officials said that in a number of projects it has been witnessed that money collected for one project has not been spent on the same and it was used to acquire land or complete other commercial projects that left many buyers in the lurch.

As per the directions, the auditor will also have to check that the amounts have been withdrawn by a promoter after it is certified by an engineer, architect and a chartered accountant, and that the withdrawal is in proportion to the percentage of project completion.