Rera asks audit firms to report on developers

The number of real estate companies in Dubai to be audited is likely to rise with Real Estate Regulatory Agency (Rera) toughening the rule by asking audit firms to check and report on developers who fail to follow agency’s guidelines, 'Emirates 24|7' can reveal.

“It is no longer the financial aspect that we have to check as we (audit firms) have been asked to report on compliance issue as well. We have to inform the companies to follow the Rera guidelines if they fail to. If the negligence is serious then we report the matter to Rera,” said Awni A Farsakh, Partner, Awni Farsakh & Co.

For example, he said, a developer needs to follow the steps laid down by Rera in case of default by an investor.

“The steps are defined under Rera guidelines… we have to ensure now that the developer does not jump from step one to step four. If that is the case, then we tell the developer to rectify that or report it to Rera.”

Awni Farsakh & Co, which is the first company to sign an agreement with Rera, is currently auditing 12 projects of five developers and believes that the number of projects to be audited by them will rise by 60 per cent.

“There are a number of developers who are not being audited… we believe toughening of the rule will lead to more developers being audited,” he added.

Not many private developers, mainly single project developers, are appointing auditing firms or follow Rera guidelines in that aspect. In certain cases, the developers have repossessed properties without giving proper notice to investors.

Dubai has witnessed completion of 129 projects since 2009 with 237 out of 450 projects likely to be completed in due course. As of May 31, 2011, Rera has cancelled 217 projects.
 

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