Real Estate Regulatory Agency (“RERA”), established in Dubai, UAE in the year 2007, is a government agency that formulates, regulates, manages and licenses various real estates related activities in Dubai.
RERA requires all its developers to have an independent “ESCROW” account and also to undertake an audit to check on the current status of the project and update the records with regards to the progress of the construction. Besides this all completed projects must have their own Owner’s Association, which needs to maintain and audit its books of accounts with annual submission to RERA.
Expert team at Baker Tilly is well versed with stipulated audit regulations and operation of Escrow Trust Account, Owner’s Association & Developer’s progress status and has mammoth experience & know-how of conducting such audits.
The scope of a RERA audit includes :
a. Financial Audit – To review :
- A list of units sold, units cancelled and cash received from buyers
- Mortgage/finance amount received for the project from financial institutions
- Retention a/c balance and verify it represents 5% of total funds received
- Paid land costs and other related payments (registration fees, oqood etc.)
- Project construction, management & marketing related payments
- Advance payments released to the contractor(s) or other parties
- Advance payment guarantee and performance bond issued
b. Operational Audit – To assess the effectiveness of control environment and activities of the company.
c. Compliance Audit – To verify whether or not the developer is in compliance with the applicable real estate laws & regulations as required by RERA.