The Impact of RERA on Real Estate in Kerala
Post by : favouritehomes
RERA refers to the Real Estate (Regulation and Development) Act, 2016 which was set up for the regulation of real estate to ensure sale of apartments and buildings in a transparent and efficient manner. The law mandates a compulsory establishment of a Real Estate Regulatory Authority in each state of the country.
This watchdog for real estate sector finally came into effect on 1st January 2020 in Kerala (K-RERA) and empowers both the buyers and builders. This Act makes it compulsory for builders to register every real estate project that’s over 50m2 or has more than 8 apartments in a single phase of development. Traumatic experiences by apartment buyers are now a thing of the past as RERA provides a platform for redressal for issues with property developers.
The RERA Act has brought in a wave of transparency in transactions between buyers and builders. Every property developer has to compulsorily register with RERA before building, advertising or selling any apartment. This has brought in greater accountability towards buyers and timely deliveries of projects. K-RERA has also notified that all buyers should first verify whether the project is registered with RERA.
Impact of RERA
Funding for real estate projects has traditionally been through buyer’s money. But with the advent of RERA, this practice has changed and now 75% of funds allocated for a project have to be deposited into an escrow account with full disclosure of use when needed. This has brought in a positive change and given the consumer more rights.
Achievements of RERA
The real estate buyer is now empowered to claim their rights over investments made by them. Some of the changes achieved include:
- Registration number or RERA number is for public information and all RERA registered projects should have one.
- Projects cannot be advertised unless they have a RERA registration number.
- Builders have to sell property based on carpet area, and not built-up or super built-up area.
- All project details are made available on RERA website, thus empowering the buyers further.
- According to RERA, advance payments cannot be more than 10% of the cost of the property.
- The builder has to deposit 75% of allocated funds into an escrow account.