AHMEDABAD: In what could set a precedent for the state’s realty sector, the Gujarat Real Estate Regulatory Authority (GujRERA) has ordered a forensic audit of an upcoming residential project in Vadodara. With this order, after two years of RERA, Gujarat joins the list of states where state RERAs have ordered forensic audits. RERAauthorities, enacted to protect the interest of consumers in real estate sector, also enjoy the powers of the civil court.
The GujRERA order dated August 8, which came after homebuyers complained of project delays, puts project developers as well as landowners under financial scrutiny.
This development in the case of San Lucas project floated by Dharti Madrid County LLP sends an implicit warning to developers to be more accountable and ensure timely completion of projects.
“Fund diversion between projects is rampant and can be tracked only by forensic audit,” said Nipun Singhvi, an advocate and a real estate forensic expert.
The independent auditor, to be appointed by Gujarat RERA, will carry out a detailed audit of the project finances, verify the project receipts, payments, receivables and payables, along with the estimation of work needed for completion of the project, states the order signed by Gujarat RERA chairman Amarjeet Singh.
“Banks have been reeling under non-performing assets due to huge debt defaults and there have been cases of multiple financing because of lack of forensic audits. The GujRERA order for forensic audit is a step in the right direction,” said Singhvi. The residential project, registered with Gujarat RERA, started on March 24, 2013, and was to be completed by December 31, 2019. It is located at Bhayli, Vasna road in Vadodara. In all there are 336 apartments in three blocks, of which 200 flats have already been sold. The petitioners claim to have paid various amounts towards the sale prices of the apartments since 2013.
However, they have not yet got possession of their apartments as the project is incomplete due to a dispute between the landowners and the promoters. Also, there is a dispute among the promoters on account of payment of land, the order stated. In all, 42 of the 200 homebuyers approached Gujarat RERA stating that the project has come to a standstill and is not likely to be completed by the scheduled date.
The petitioners have claimed that sale deeds remain unsigned despite several attempts to reach out to the developers and landowners. The landowners have stated to Gujarat RERA that they have not signed any agreements or taken any money from the buyers and that the relationship of the promoter and ‘allottee’ was between the developers and buyers.