Buying a house is no ordinary ordeal for most of us, there is usually a very long-term plan and an even longer dream kindred with a home built or bought. When those dreams get shattered due to an unregulated market where every player changes the rules to their benefit, everybody suffers the consequences. To level the playing field, the central government brought in the Real Estate Regulation & Development Act also known as RERA in 2016.
The start of 2020 saw the state government launching the Kerala Real Estate Regulatory Authority, K-RERA which will implement the centre’s vision at the state level. K-RERA will be applicable to all projects where the land to be developed is 500 sq.m or more, and the number of apartments is 8 or more inclusive of all phases. All projects for which the occupancy certificate or completion certificate has not been issued should also be registered under RERA. The deadline for registration is 31st March 2020.
The major stakeholders involved are the promoter, the real estate agent and the consumer. This act will be more customer-centric and will bring more power to the end consumer who is buying a house/apartment.
All the existing realtors are to submit details regarding their ongoing and completed projects, financial capacity and competency to get registered under RERA. This will help the authorities to regulate the defaulters in the industry and bring in more transparency.
To get RERA registration, the builder will have to submit a detailed description of the land and project such as the status of the land, characteristics of the land, ownership, approved building plans with approved drawing, all the no-objection certificates (NOC), project completion schedule, etc. These details will be considered as legal evidence for any future enquiries or disputes.
The builders are not allowed to advertise any projects before getting them registered under RERA. This is to prevent the builders from giving fake promises to the customers. After the registration, the realtors should ensure that the advertisements are in line with the details submitted to the RERA authority and the claims have to be as accurate as possible.
Under the RERA authority, the calculation of the saleable area will be standardized, which shall calculate the total carpet area as the saleable area. This is a huge benefit for the customer as some of the earlier methods of calculating the saleable area lacked clarity.
The RERA website will have the details regarding the progress of the project at each level. A buyer can check the progress of his investment through this portal without visiting the project site. This will be of great benefit for people who are living in other countries such as NRIs.
If a project gets delayed then the builder will be liable to pay the monthly interest on bank loans taken for under-construction flats. In case of delays, a buyer can withdraw from the project demanding a full refund or get compensation from the builder and continue with the project until the date of completion.
A buyer can also file a complaint against the developer if he make any additions and alterations in the sanctioned plans, layout plans, and specifications and the nature of fixtures, fittings, and amenities, etc. 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.
If a buyer finds any structural defects in the project within 5 years from the date of hand-over, then the developer will be liable to rectify it without any charges. If the builder fails to do so then the buyer has the right to raise a complaint to the authority.
Under K-RERA, each project should have an individual bank account, thus preventing 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 cannot withdraw more than 30% from that account, and the balance 70% must be spent on the particular project.
RERA will establish a standard sale agreement between all builders and buyers across the nation. The new sale agreement will include all details and descriptions about the project and transactions, thus providing legal security for both parties in case of a dispute in the future.
RERA Act – Rights & Duties of Allottees/Homebuyers
Following are the major rights & duties of the homebuyers as specified by RERA Act:
RERA offers what the industry was in need for a long time, a body that could help the customer get what he is promised and also helping the realtors to serve their market with integrity.
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