Real Estate Regulatory Authority (RERA) stands for the protection of home purchasers, circulation of awareness among promoters and to encourage investments in the real estate industry. RERA came into force on 1st May 2017.
The Kerala Real Estate Regulatory Authority (K RERA) 2018 has been in force since 1st January 2020. The registered office is situated in Thiruvananthapuram.
RERA is applicable to the following:
- PROMOTER: Any person/entity who conducts construction, repair and/or renovation of a building or apartment; or development of land into a project.
- REAL ESTATE AGENT: A person/entity who negotiates or acts on behalf of someone facilitating a transaction involving a plot of land, apartment or building.
The Salient Features of Kerala RERA consists of:
- Security of Buyers – A major portion of the amount paid by the buyers will be deposited in a separate account and used only for construction and related purposes. The builder cannot quote for more than 10% of property cost as an advance before the signing of a sales agreement.
- Transparency in dealings– The documents submitted by the builder has to be disclosed to the buyer and changes to plan cannot be undertaken without prior approval from buyer.
- Fair dealings – Should the project be postponed, the buyers can claim the entire money invested or choose to remain invested.
- Service quality – Any concern raised by the buyer within 5 years of purchase has to be rectified within 30 days of the date of complaint.
- Clearance – Any advertisement, sale, investment, booking or building can be initiated only after registration. The advertisement put out should bear the unique registration number provided by RERA.
Are you a Promoter?
Here is a list of things that you need to do.
The Act calls for mandatory registration for all real estate projects where land is more than 500 sq. m. (12.35 cents) or 8 apartments. In case of ongoing projects, in the event of not having obtained a Completion Certificate, the project will have to be registered within 3 months.
- LIST OF DOCUMENTS
The documents to be offered has been specified in the official website which includes application form, details on address of the project and enterprise, copy of all permits and sanctions obtained, etc.
- DETAILS ON AUDIT AND CERTIFICATION
70% of the amount raised from buyers from time to time has to be deposited in a separate account of a Scheduled Bank (to cover construction and land costs). The deposit can be withdrawn provided:
- The amount withdrawn will be to the extent of percentage of completion of work
- Work done has been certified by an Engineer, Architect and a Chartered Accountant in practice
- The accounts are to be audited and duly signed and certified statement of accounts are furnished within 6 months from completion of every financial year by a CA in practice
- CREATION OF OWN WEBSITE
The promoter has to create own website and provide such information as required for public disclosure
- APPLICATION FOR WITHDRAWAL
Upon withdrawal of application, the same has to be filed within 30 days of filing the application for registration. An amount equal to 10% of the fee paid or Rs. 50,000 (whichever is higher) will be retained as processing fee and the residual will be refunded within 30 days.
Duties of a Real Estate Agent
A Real Estate Agent is expected to obtain registration prior to facilitating or acting on behalf of anyone to facilitate the sale or purchase of anything related to the project.
- VALIDITY AND RENEWAL OF REGISTRATION
The registration obtained will be valid for a period of 5 years, in case of both new as well as renewed registration. The application for renewal has to be furnished in not less than 30 days prior to the expiry of existing registration.
- GENERAL GUIDELINES
- The agent should maintain all records, books of accounts and documents.
- Provide all information and documents to the buyer.
- Assist the promoter and buyer to exercise their duties and fulfil obligations at time of booking.
- Absence of any unfair trade practices.
Author – CA. Anu Jose FCA