MahaRERA introduces reporting requirement for Quality of construction

Authored by Sandeep Shah, partner, N.A Shah Associates LLP Rakesh Jain, Deputy Manager- Audit and Assurance, N.A Shah Associates LLP Continuing with the tradition of enhanced disclosure & providing assurance to the buyers regarding quality in regard to real estate projects, Maharashtra Real Estate Regulation Authority (MahaRERA) has issued a circular dated 26th November 2018 covering the disclosures in regard to professionals associated with project as also concerning quality assurance certificate. Information relating to Professionals: The circular introduces a standard form wherein details of the professionals concerned with the development of the project is required to be mentioned and the same will be required to be published on MahaRERA website by the promoter. The details includes name, registration number, email id, mobile number and address of the professionals. In case of contractors and other professionals, the type of engagement has to be mentioned. The circular specifically mentions that the name of the chartered accountant certifying form 3 and form 5 should be different as there was some confusion in this regard between RERA Act and Rules. The list of concerned professionals for which information has to be given include the following:

• Real Estate Agents
• Contractors
• Architect (Certifying Form 1 & 4)
• Structural Engineer
• Engineer (Certifying Form 2 and 2A),
• Chartered Accountant (Certifying Form 3 and 5) and
• Other professionals

The circular does not specify the kind of professionals who will be required to be reported under ‘Other professionals’ and it will be subject matter of interpretation. The professionals could be lawyers, cost accountants, interior designers, horticulturist consultants, environment specialist, security& safety consultants and so on. A clarification from MahaRERAin this regard would be useful. The form also does not specify whether the specific consent of the professional has been obtained before mentioning their names and other details. It will be a good practice for the developer to do so and also for the professionals to keep check that their name appears only in those cases where they have given their consent as otherwise the buyers of property may have valid expectation out of them. The promoters are required to update these details online from 1st December 2018. The details will be for existing and future projects. Engineers certificate for quality assurances Under current guidelines, withdrawal of funds from designated account is in proportion to the percentage of completion of the project which is based on the certificates provided by Architect (Form-1); Engineer (Form – 2) and Chartered Accountant (Form – 3). Under the current guidelines, the engineer while certifying Form 2,only provides the estimate of cost and cost incurred on the project. The regulator in order to enhance the quality of disclosure has introduced Form 2A which deals with quality aspect of the work and is requited to be issued by the Site Engineer. The form will provide information in regard to (A) the quality of work / test performed and (B) material / work performed which was not of acceptable standard but was still accepted or in other words not rejected by the developer. The form is required to be submitted on quarterly basis by the Site Engineer. The Form 2A will be applicable in respect of projects registered on or after 1^st December 2018 and is required to be filed on or before end of every financial quarter. The certificate is required to be uploaded by the promoter on MahaRERA webpage. Currently, the Form 2A does not specifically mention that same engineer must certify Form 2 and Form 2A though objective seems to be that same engineer should certify. Also, there should be clarity as to how the certification will be done if there are more than one site Engineer. The Form 2A currently does not envisage such scenario. A clarification in this regard will be useful and will avoid any confusion. The certificate requires site engineer to certify that they have applied mandatory checks on the basic materials/ work used in the construction. The synopsis of the certificate is as follows;

Type of material	Tested for	Applicable BIS	Alternative standard	Outcome i.e results	Comments
Cement	its fineness, soundness, setting time, compressive strength etc.	IS code 3535:1986	or as per other relevant lS/BS/NBC code, or as per industry standards	within the permissible limits.	The standard is for method of sampling
Coarse aggregate	deleterious materials, clay lumps, crushing value, impact value a	lScode 243011986	-do-	within the permissible limits.	Standard reference needs review and also must consider that different standards deal with concrete/ plaster/ masonary mortar.
Bricks/ blocks	water absorption, crushing strength etc.	lScode 5454:1978	-do-	within the permissible limits.	The standard is for method of sampling
Concrete/Ready-mix Concrete	compressive strength for various periods	IS code 456:2000	-do-	within the permissible limits.
Steel for concrete-	tensile strength, elongation and gauge length etc.	IS code 2062:2011	-do-	within the permissible limits.
Testing of Other materials like sand, crushed sand, floor tiles, fixtures and fittings, pipes and sanitary fittings etc. (List out all items)	relevant standard	--	-do-	Materials confirm to relevant standard
Electrical Materials &workmanship -electrical wiring/ connection/lift installation/other electrical installations	Material conform to relevant standard	(not specifically mentioned)	-do-	carried out under  authorized/registered electrical engineer and its records has been maintained.

  The certificate also deals with the following additional items:

Workmanship	Certify that work has been carried out under its supervision & that workmanship and quality is satisfactory and up to the mark and the work has been acceptable within the permissible limits of deviations as per relevant code of practice.
Structural engineer	Mention the details of structural engineer engaged by the promoter and certify: 1.       that the structural design of buildings in this project has been done under supervision of engineer 2.       Further engineer has checked the soil report before laying PCC for foundation in consultation with soil consultant. 3.       The formwork and concrete mix design has been done as per ls 10262:2009 or as per other relevant codes as applicable. 4.       Periodic checks and certificates for STABILITY and SAFETY have been kept onrecord.
Preservation of records	Record of all test results of this project have been properly kept in the prescribed formats and will be preserved at least up to the defect liability period or for the period as required by any other provision of law
Materials or any other item of work which was not rejected	Listing of materials or items of work which has been accepted even though it was not conforming to the standard specifications.

  The certificate to be issued by the Site Engineer is quite pervasive and also requires review of the work/ records of the supporting professionals/ agencies. It will be interesting to see whether the certificate will be issued with lot of caveats or not. Further, since this certificate is for projects registered after 1st December 2018, it will be some time before such certificates will be available in public domain. This requirement will certainly lend lot of confidence in the minds of buyer as now they have access to certificate from qualified professional regarding quality of the construction.