Buying a house usually happens after a long-term plan and after having a long dream. Those dreams will get shattered if there’s an unregulated market where every player or the various builders in Kerala, change the rules to their benefit. Everybody will suffer the consequences.
In order to make a uniform and fair dealing, the central government had brought in the Real Estate Regulation & Development Act also known as RERA in 2016.
At the start of 2020, the state government launched the Kerala Real Estate Regulatory Authority, K-RERA which was meant to implement the center’s vision at the state level. K-RERA is applicable to all projects where the land that will be developed is 500 sq.m or more, and the number of apartments will be 8 or more inclusive of all phases.
According to this rule, the various flats in Kerala and all projects for which the occupancy certificate or completion certificate has not been issued also needed to be registered under RERA. The deadline for registration was 31st March 2020.
The major stakeholders involved were the promoter, the real estate agent and the consumer. This act is more customer-centric and also brought in more power to the end consumer who is buying a house or apartment in Kerala.
Key objectives of RERA
- Ensures transparency in all transactions and reduces frauds & delays
- Promotes accountability towards allottees/homebuyers and protects their interests
- Ensures that the promoter and allottee are always in-line with the each other
- Established a fast-track dispute resolution mechanism
- Introduced professionalism and pan India standardization
- Imposed responsibilities on both builders and homebuyers
- Created a regulatory oversight mechanism to effectively enforce contracts
- Promoted good governance in the real-estate sector and boosts investments
How is RERA benefiting the homebuyers?
- Checks the credibility of the builder
All the existing realtors and upcoming realtors had to submit details regarding their ongoing projects, completed projects, financial capacity and competency to get registered under RERA. This helped the authorities to regulate the defaulters in the industry and bring in more transparency.
- The builder needs to submit In-depth project descriptions
In order to get RERA registration, the builder should submit a detailed description of the land and project like the status of the land, characteristics of the land, ownership, approved building plans, approved drawing, no-objection certificates (NOC), project completion schedule, etc. These details are considered as legal evidence for any future inquiries or disputes.
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- Builders can advertise only after registration
The builders can’t advertise any projects before getting them registered under RERA. This prevents the builders from giving fake promises to the customers. After registration also, the realtors should ensure that the advertisements are in line with the details submitted to the RERA and should be as accurate as possible.
- Standardized calculation of carpet area
The calculation of the saleable area will be standardized, under the RERA authority. The total carpet area is the saleable area. This is a huge benefit for the customer. Some of the earlier methods lacked clarity.
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- Monitors the status of the project
The RERA website has the details regarding the progress of the project at each level. As a buyer, you can check the progress of your investment through this portal without having to visit the project site. This is highly beneficial for people who are living in other countries such as NRIs.
- Levies penalty for project delays
If a project gets delayed, the builder is liable to pay the monthly interest on bank loans that are taken for under-construction flats. In case of delays, as a buyer, you can withdraw from the project and demand a full refund or get compensation from the builder.
- No changes can be made in the sanctioned plan by the builder
A buyer can file a complaint against the developer if he makes any additions and alterations in the sanctioned plans or its layout plans, specifications, the nature of fixtures, fittings, or amenities without the previous consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in the building.
- The Builder is liable to make rectification of structural defects
If a buyer finds any structural defects in the project within 5 years from the date of hand-over, the developer will be liable to rectify it without any charges. If the builder fails to do so, the buyer has the right to raise a complaint to the authority.
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- Every project by every builder should have a separate bank account
According to K-RERA, each project should have an individual bank account. This is to prevent the misuse of the funds by the builder. K-RERA also insists on conducting a project audit every 6 months by a certified Chartered accountant and Engineering surveyors. At a given time, the builder won’t be allowed to withdraw more than 30% from that account, and the balance of 70% has to be spent on that particular project itself.
- Standardization of sale agreement
RERA establishes a standard sale agreement between all builders and buyers across the nation. The new sale agreement includes all details and descriptions about the project and transactions. This provides legal security for both parties in case of a dispute in the future.
RERA Act – Rights & Duties of Allottees/Homebuyers
- Allottee can obtain important documents such as sanctioned plans, layout plans, project specifications and other supporting documents approved by the authority
- Homebuyers have the right to know the stage-wise completion status of the project including the provision of water, sanitation, electricity and other amenities and services as mentioned by the promoter in the agreement.
- Allottees can claim possession of an apartment. The homebuyers association shall be entitled to claim the possession of common areas, as per the declaration given by the promoter.
- Buyers can claim a refund of the amount with interest and compensation if the promoter fails to comply with the terms of the agreement or is unable to give possession as per the agreement.
- The buyer shall have necessary documents and plans, including that of common areas after handing over possession by the promoter.
- Allottees must take possession of the unit within 2 months of issuance of the occupancy certificate, failing to do so can attract penalties.
- Allottee is responsible to make on-time payments as specified in the agreement and also provides his share of registration charges, municipal taxes, water and electricity charges, maintenance charges, and other charges if any. If there is any delay in payment by the allottee, he/she will be liable to pay interest as specified in the agreement
- Allottees shall participate in the formation of an association, a consumer federal, or any cooperative society.
- Allottee shall participate in the registration of conveyance deed by the developer.
Bottom Line
With the onset of RERA, the real estate industry got what it had needed for a long time, a body that could help the customer get what is promised and also help the realtors to serve their market with integrity. If you have been in search of a flat for sale at Kochi and want to check out the best ones available in the market, you should definitely get in touch with us.
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