What is an Escrow Account?
RERA/ Escrow Account Audit
In general, an escrow account is one where funds are stored or aggregated for a particular reason. Withdrawals from such account are limited, so finances can be pulled back just to accomplish that particular reason.
RERA requires every one of its developers to have an autonomous “ESCROW” account and furthermore to attempt an audit to check of the present status of the project and refresh the records with respect to the advance of the development.
The scope of a RERA audit incorporates:
Financial Audit – To survey:
- A list of units sold, units drop and money got from purchasers
- Home loan/finance amount got for the project from financial organizations
- Maintenance a/c balance and check it represents 5% of total funds received
- Paid land costs and other related payments
- Project development, administration, and marketing related installments
- Advance payments discharged to the contractor(s) or other parties
- Advance payment assurance and execution bond issued
Operational Audit – To evaluate the effectiveness of control condition and activities of the organization.
Consistence Audit – To check regardless of whether the developer is in agreement with the relevant real estate laws and controls as required by RERA.