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The Real Estate (Regulation and Development) Act, 2016, the Kerala Real Estate Development Rules, 2018 and Kerala Real Estate Regulatory Authority (General) Regulations, 2020, have heralded positive changes in the real estate sector. Implementing the regulations, the Kerala Real Estate Regulatory Authority (K-RERA) has brought together the promoter, the allottee and the real estate agent, the major stakeholders, in a rare synergy. The K-RERA came into effect on January 1, 2020. “Before the Act came into force, there were serious issues such as mismanagement of funds, lack of transparency in the execution of real estate projects and delayed delivery. In my view, the law envisages the creation of trust between the builder and buyer, transparency, and timely delivery of projects,” says P. H. Kurian, chairman of K-RERA.
Trust All new commercial residential projects, in which the land proposed to be developed exceeds 500 sq. m, or the number of apartments proposed to be constructed exceeds eight, should be registered with the K-RERA. All real estate agents too need to be registered. “No promoter shall sell or advertise real estate projects that are not registered with RERA. For each project, 70 per cent of funds received from home buyers shall be deposited in a designated account. Fund withdrawal from the account should be proportionate to the completion of the project as certified by an engineer, architect and chartered accountant. Not more than 10 per cent of the unit cost can be collected by the promoter without a registered agreement for sale executed in the prescribed format. An annual audit of the project should be done by a chartered accountant and submitted to the authority by September 30 every financial year,” adds Mr Kurian.
Transparency The details of registration, complete with land ownership records, sanctioned plans, no-objection certificates, and de- tails about the promoters, their audited balance sheet and track record, are to be uploaded on the RERA website and made accessible to the public. “A prospective buyer may thus make an informed decision. The RERA will impose a penalty of upto 10 per cent of the cost of the project for non-registration of real estate projects. The promoter should post on the RERA website details of pending cases, if any, related to the project,” he says.
Timely delivery Buyers are eligible for compensation in case of delay in the completion of the project. “Along with reimbursement of the amount received, the promoter should pay interest for the period. Allottees are eligible for delayed interest at the rate of Benchmark Prime Lending Rate (BPLR) of the State Bank of India plus 2 per cent. If the buyer delays remittance of installments, the promoter is eligible to get interest at this rate for the delay in payment. If the buyer still wants to continue with the builder and wants a fresh commitment to delivery, we work out a new date acceptable to both parties,” he states.
Easy registration Registration of real estate projects with K-RERA is easy. “On submitting an application, registration shall be granted/rejected within 30 days. If granted, the Registration Certificate/Number will be given. If the authority fails to grant the registration or reject the application within a period of 30 days, the project shall be deemed to have been registered,” says M. P. Mathews, Member, K-RERA.
Projects in limbo The majority of cases filed with K-RERA are related to real estate projects in limbo. The approach of the authority has been to encourage the completion of the projects by issuing formal directives to the promoters in a mutually agreed time frame. “Any aggrieved person may file a complaint with the authority or the adjudicating officer against any promoter, allottee or real estate agent for any violation or contravention of the provisions of the Act or Rules and Regulations,” says Preetha Menon, Member, K-RERA.
Awareness about the Act How effective has the K-RERA been in its two years of operations? “A ma challenge has been to create awareness among the stakeholders,” says Mr. Kurian. “Awareness programmes for builders and buyers have laid the foundation for our work. Of the 1,000 cases filed before K-RERA, about 500 have been disposed of. Some cases could not be considered as they did not fall under our jurisdiction. Projects that have occupancy certificates before May 1, 2017, do not come under our jurisdiction. There has been a positive response from both the builders and the buyers to the regulations. As many as 662 projects have been registered so far. Of them, 100 have been completed and handed over to the buyers. In all, 211 real estate agents have registered with K-RERA.”
Rights and duties of home buyers The Act clearly specifies the rights and duties of the buyer. The buyers have the right to obtain all information such as copies of sanctioned plans, layout plans and specifications approved by the competent authority and copies of all documents such as title deed. They have the right to know the stage-wise schedule of the completion of the project including the provision of water, sanitation, electricity, and other amenities and services as agreed by the promoter. The buyers have the right to claim possession of the apartment. They have the right to claim a refund of the amount with interest and compensation if the promoter fails to comply with or is unable to give possession of the property in accordance with the terms of the agreement or because of discontinuance of business by suspension/ revocation of registration. They should make payments to the promoter as specified in the agreement. They should pay common area maintenance charges to the as- sociation. They are liable to pay interest for any delay in payment to the promoter. They should take possession of the apartment within two months of the issuance of the Occupancy Certificate.
Precautions What are the precautions to be taken by the prospective home buyer? “My advice to them will be to invest only in RERA-registered projects,” states Mr Kurian. “All the details of the builder will be available on the RERA website. Without mandatory sanctions and certificates, the builder cannot register with RERA. This will help the buyer make a safe investment. If there are issues related to the delivery and quality, complaints may be filed and the K-RERA will intervene.”
The RERA protects the interests of the buyer and the builder. This makes the real estate sector safe for investment and growth-oriented.
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