Karnataka, one of the first Indian States in notifying Real Estate Regulatory (Regulation and Development) RERA Act, 2016 immediately as soon as the Act came into force on May 1, 2017. Kapil Mohan, Principal Secretary, Department of Housing, Government of Karnataka, has shared the details of Karnataka Real Estate Regulatory Authority (RERA), experiences and future plans, in an interview.
All the State Governments are liable to notify all the Rules under RERA within a period of 6 months. Here is an overview of Karnataka RERA.
Karnataka RERA has been established as per the Section 1 of the RERA 2016. As per Section 3 of the Act, all the promoters ought to register their ongoing real estate projects (housing and commercial) with the authority on or before July 31, 2017. Government of Karnataka notified Karnataka RERA on July 10, 2017 & launched the website (rera.karnataka.gov.in) on the same day for filing online registration. Over 800 real estate projects out of around 4,000 were registered with Karnataka RERA before the deadline. The Government directed all the promoters and developers who failed to register their ongoing projects to comply with RERA on or before August 31, 2017.
Key features of the RERA Act?
Registration: The Real Estate Act RERA makes it mandatory for all the commercial & residential real estate projects where land is over 500 sq. metres, or 8 apartments, to register with RERA for launching a project, to provide better transparency in project-marketing and execution. For on going projects, which haven’t received completion certificate till the date of commencement of the RERA Act, they will have to seek registration within 3 months. Registration Application must be either approved or rejected within 30 days from the application date by the RERA. On successful registration, the promoters of project will be provided with a registration number, a login ID and password for applicants to fill up essential details on website of the RERA.
Failure to register will invite a penalty of up to 10% of the project cost or three year imprisonment. Real estate agents, who facilitate sake or purchase of properties, must take prior registration from RERA. These agents will get a single registration number for each State or Union Territory, and they must quote it in every sale facilitated by them.
Protection of buyers: RERA restricts unaccounted money from being pulled into the sector and as of now 70 % of the money has to be deposited with the bank through cheques. A major benefit for consumers included in the Act is that the builders will have to quote prices based on carpet area not on super built-up area, while the carpet area has been clearly defined in RERA to include usable spaces like kitchen & toilets.
RERA and Appellate Tribunal: It will help in establishing state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both the residential and the commercial projects and ensure timely completion & handover. Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill.
How RERA to benefit the builders?
The builders will also benefit from the RERA, as it proposes to impose a penalty on allottee for not paying dues on time. Also, the builder will have the opportunity to approach the regulator in case there of any such issues with the buyer.
Impact of RERA in general?
Share of affordable segment in total launches has improved. Sales have been weak across segments, it has been prominent in high-end & luxury segments over the last quarter owing to demand-supply mismatch.
Under RERA, all the property brokers will have to register with RERA in their states, thus sieving out small-time players & consolidating major ones
According to the new order issued by RERA, developers cannot delete documents once uploaded on the website. Developers will have to be extra careful while uploading any document for registration, as the new orders from the RERA says that documents once uploaded by the promoter during registration or project update cannot be deleted. RERA, also said that, if the developer fails to update the progress in the project, action will be taken too.
Where does Karnataka stand in RERA?
Karnataka stands in top 3 rank in RERA though there is no official study yet for these rankings. Karnataka is one of the first states in notifying the RERA in the country.
Status on RERA: As of August 5, 2017, States like Goa, Kerala, West Bengal, Jharkhand, Assam has not notified the Rules.
SL. No State/UT Date of Notification
1 Uttar Pradesh October 11, 2016
2 Madhya Pradesh October 22, 2016
3 Gujarat October 29, 2016
4 Chandigarh October 31, 2016
5 Daman & Diu October 31, 2016
6 Andaman & Nicobar October 31, 2016
7 Lakshadweep October 31, 2016
8 Daman and Diu October 31, 2016
9 Delhi November 24, 2016
10 Odisha February 25, 2017
11 Andhra Pradesh March 28, 2017
12 Maharashtra April 19, 2017
13 Chhattisgarh April 26, 2017
14 Uttarakhand April 28, 2017
15 Bihar May 1, 2017
16 Rajasthan May 1, 2017
17 Punjab June 8, 2017
18 Karnataka July 10, 2017
19 Tamil Nadu June 22, 2017
20 Haryana July 28, 2017
21 Telangana August 4, 2017