MahaRERA Form 5: what developers must file every year

Why Form 5 exists

The Real Estate (Regulation and Development) Act, 2016 requires promoters to deposit 70% of the amounts collected from allottees for a project into a separate bank account. That money can be used only for the cost of land and construction of that project. Withdrawals must be in proportion to the completion of the project and are certified by the project engineer (Form 1), architect (Form 2) and a Chartered Accountant (Form 3).

To check that this has actually happened, the Act requires the project accounts to be audited by a practising Chartered Accountant within six months of the end of every financial year. The result of that audit is the annual report on the statement of accounts, filed with MahaRERA in Form 5.

Who must file, and by when

• Who: the promoter of every project registered with MahaRERA, for each financial year until the project is completed.
• When: within six months of the end of the financial year, which means by 30 September for the year ending 31 March.
• Certified by: a practising Chartered Accountant who has audited the project accounts.

What the report covers

Form 5 is a project-wise summary of how money from allottees was collected, deposited and used. It typically covers:

• Amounts collected from allottees during the year and since the project began
• Amounts deposited in the designated RERA bank account
• Amounts withdrawn, and how they were used on land and construction
• Whether withdrawals were in proportion to the completion of the project, as certified in Forms 1, 2 and 3
• The closing balance in the designated account
• The auditor’s comments on any instance of non-compliance

Documents to keep ready

• Bank statements for all project accounts (collection, designated RERA and any other account)
• An allottee-wise register of collections, including cancellations and refunds
• Form 1, 2 and 3 certificates issued during the year
• Project cost workings: land, approvals, construction and finance costs
• Books of account with separate ledgers for each project
• Loan statements, if the project is financed
• Quarterly progress reports filed on the MahaRERA portal

Common mistakes that lead to notices

1. Less than 70% deposited. Collections stay in a current account and are not moved to the designated account.
2. Withdrawals without Form 3, or withdrawals that go beyond the certified stage of completion.
3. No project-wise accounting when the promoter runs more than one project, making it impossible to show that funds were used for the right project.
4. Figures that don’t match between Form 5, the Form 3 certificates and the quarterly updates on the portal.
5. Cancellations and refunds handled incorrectly in the collection figures.
6. Missing the due date. Late or missing filings are easy for the regulator to spot.

What happens if you don’t comply

Contravening the provisions of the Act can attract a penalty of up to 5% of the estimated cost of the project under section 61, and MahaRERA may take further action against the project. Beyond penalties, a clean compliance record matters to lenders and homebuyers.

How we can help

We carry out the annual audit of project accounts and certify Form 5. We issue Form 3 certificates during the year and reconcile the designated account every quarter, so the year-end report has no surprises.

This article is for general information only and is not professional advice. Laws and procedures change through amendments, notifications and circulars. Please consult us before acting on it.