MahaRERA has expressed concerns about a group of professionals responsible for ensuring businesses comply with regulations, but are themselves violating the law. Specifically, MahaRERA has reached out to the Chartered Accountants of India (ICAI), which oversees CAs, to address this issue.
According to the law, a CA who serves as a project auditor for a housing project's daily operations should not also handle the project's statutory audit. However, MahaRERA has discovered through information submitted by developers that the same CA is performing both roles for certain projects.
MahaRERA detected this violation by utilizing the Unique Document Identification Number (UDIN) assigned to CAs for their professional transactions.
An anonymous MahaRERA official stated that the regulatory authority has taken serious action in response to this violation. Show-cause notices have been issued to the CAs, and a letter has been sent to their governing body, ICAI, to address this illegal conduct. In the letter, MahaRERA recommended that these CAs receive training to educate them on the regulations outlined in the Immovable Property Act.
The Real Estate Act mandates that developers maintain an escrow account by keeping 70% of the funds received from homebuyers for project development. Additionally, various professionals, including the project's CA, must certify the project's progress to release funds at each stage of construction. To withdraw funds, the project's CA must submit Form 3, which has been certified.
In addition, the developer is required to update the Statutory Audit report with MahaRERA biannually. The audit must certify that the developer's expenses align with the project's completion. Any irregularities must also be documented during the audit.
Therefore, to avoid conflicts of interest, it is necessary to assign different individuals and companies for these tasks.
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