Karnataka RERA Bank Account Directions, 2020.
Karnataka RERA · Circular No. RERA/Finance-Section/BAD/02/2020-21 · 07/01/2020
What this circular is about
The Karnataka Real Estate Regulatory Authority issued the Karnataka RERA Bank Account Directions, 2020 to prescribe how promoters must maintain and operate the RERA Bank Account. The Directions cover deposits from allottees, withdrawals linked to project completion, certification requirements, reporting to the Authority and the procedure for changing the RERA Bank Account.
Key Highlights
The Karnataka RERA Bank Account Directions, 2020 lay down the framework promoters must follow for handling project funds.
Maintaining the RERA Bank Account
Every project must maintain a designated RERA Bank Account structured to prevent any lien or third-party security over the funds.
Depositing collections from allottees
Promoters are required to deposit 70% of the amounts collected or realised from allottees into the RERA Bank Account. Pass-through charges and indirect taxes are excluded while determining this amount.
Withdrawing funds as the project progresses
Money cannot simply be withdrawn as required. Withdrawals must correspond to the percentage of project completion and be supported by the prescribed certifications from the relevant project professionals.
Reporting and certification requirements
Promoters must maintain the prescribed documentation and submit the required certificates relating to project progress, fund utilisation and withdrawals. The Directions also prescribe periodic and annual reporting requirements.
Changing the RERA Bank Account
he designated RERA Bank Account cannot be shifted from one bank to another at the promoter’s discretion. Prior approval from Karnataka RERA is required, along with the prescribed application, certificates, NOC and supporting documents.
The Directions also prescribe detailed formats and certificates to be used by promoters, Chartered Accountants, architects, engineers and banks for different stages of project compliance.
Prescribed Forms and Certificates
In addition to the directions governing the RERA Bank Account, the document provides prescribed formats and certificates for various stages of project compliance. These include certificates from the Chartered Accountant, Architect and Engineer for withdrawal of funds, annual reporting on project fund utilisation, documentation for changing the designated RERA Bank Account, and certificates relating to extension of project registration.
Promoters should refer to the official Directions for the applicable formats, supporting documents and certification requirements.
Official Circular
Download Karnataka RERA’s circular on ‘RERA Bank Account Directions, 2020‘. Circular No. RERA/Finance-Section/BAD/02/2020-21 dated 07/01/2020.
All your questions answered (FAQs)
The promoter must deposit 70% of the amounts collected or realised from allottees into the RERA Bank Account. Pass-through charges and indirect taxes are excluded while determining the amount to be deposited.
No. Withdrawals must be in proportion to the percentage of project completion and must be supported by the prescribed certificates from the relevant project professionals, including the Chartered Accountant, Architect and Engineer, as applicable.
Yes, but the account cannot be changed without following the prescribed procedure. The promoter must obtain prior permission from Karnataka RERA and submit the prescribed application
Disclaimer:
The information contained in this article is provided for general informational purposes and does not constitute legal advice. Readers should not act or refrain from acting on the basis of any content included herein without seeking appropriate legal or professional advice on the specific facts and circumstances at issue.
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