Kerala real estate rules line up tough penalties for errant developers

If a fraud is confirmed, an additional penalty of up to 10 per cent of the estimated cost of the project will be levied on real estate companies.

Pune has seen decent sales, compared to cities like Chennai and Mumbai, which have reported a double digit dip in sales

If a real estate project is not delivered on time, then a buyer is entitled to a compensation as mentioned in the contract and an additional 12 per cent interest, as per the new real estate rules in Kerala. If a fraud is confirmed, an additional penalty of up to 10 per cent of the estimated cost of the project will be levied on real estate companies.

With the Kerala government placing restrictions as per the Real Estate Regulation law, the move has been aimed at making the sphere of real estate completely transparent.

Although the law related to real estate regulatory was introduced during the previous UDF government, no rules were formulated then. The state law subsequently stood withdrawn after the central government passed the Real Estate (Regulation and Development) Act. Now that Kerala has framed the rules and regulations, the authority responsible for the local self-government will be able to crack the whip where needed.

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Thousands of complaints have been filed against developers, pointing out that the construction has not been completed as stipulated under the contract. Such complaints can now be submitted before the Real Estate Regulatory Authority (RERA) for a nominal fee of Rs 100.

Below are the new conditions that need to be met before undertaking construction of any building project:

*Real estate business will not be permitted in the state without the authorisation of RERA.

*Real estate promoters should apply for registration only after getting all the permissions mandated under construction rules. Those who have already started constructing are also required to register with the RERA.

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*Details of real estate promoters and partners, including their photo and address, list of projects implemented in the last five years, legal proceedings, project outlines, fire safety/ environmental/ building permissions, parking facilities etc should be published on the website.

*The builder is also bound by law to return the money collected from buyers within 45 days, after deducting the booking amount.

*RERA is entrusted with the task of hearing complaints of property buyers. If necessary, it will enquire into the complaints directly.

*RERA is required to publish details of all those companies and individuals who have been slapped the penalty.

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*Every real estate agents are required to pay a sum of Rs 25,000 at the time of application for registration as an individual broker. The fee for renewal of registration is Rs. 5,000. Those who sell the land after purchasing it immediately do not need to do registration. Those who have inherited ancestral land and are planning to sell it through plots are also exempted from the registration process. In addition to one-time registration, agents and real estate firms need to register a separate registration in each project.

*A real estate company can back out of a Flat/Villa project within 30 days.

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