July To mark the setting up of Real Estate Regulatory Authority in Karnataka, propertyalways.com planning to organize an event “Bangalore gets its act together: Are developers RERA-ready?” . The panel at the event comprising government officers, developers and legal and taxation experts were present on the occasion.
These included Karnataka housing secretary Kapil Mohan, Bengaluru, Prestige group chairman Irfaan Razack, Sterling Group chairman Ramani Sastri and Co-Founder Shankar Sastri (also President CREDAI-Karnataka), Sobha Developers’ MD J C Sharma, senior advocate Anup Shah and Ashutosh Kapoor, director, Governance, Risk and Compliance Services, KPMG in India, among others.
Speaking at the occasion, RERA chief Kapil Mohan said all the stakeholders had to come together and achieve a single goal of growth for the state. “There is no ‘we’ versus ‘they’ here,” he said. On this, KPMG’s Ashutosh Kapoor added that developers, government and consumers have got one platform to interact freely. He further added that RERA had created a platform for three stakeholders to communicate effectively. “Going forward, RERA is the new norm of doing business,” he said.
Talking about meeting the needs of consumers through setting up of the Act, Prestige chairman Irfaan Razack said that once “you are customer friendly, everything else falls into place”. He further added that RERA as an Act will bring transparency and accountability into the industry.
Calling upon the developer community to tread cautiously while advertising their projects, Razack added, “Do not get carried away by your creative agency. Show only what you are going to sell to the consumer.” My advertisements have stopped showcasing visual representation that might cause legal hassles in the future, he said.
Senior lawyer Anup Shah, echoing the same, said a developer should only show what he is going to give. “The purpose of the Act is to protect the existing buyer,” he said.
To this Sobha Developers’ Sharma added that consumer’ demands are simple. “If a developer gives them quality product within the agreed time, it’s the best thing for a consumer,” he said.
On the issue of giving exemption to ongoing projects, the RERA chief said ongoing projects cannot be exempted from RERA. But Sharma sought, “Some extension of time in the larger interest of the real-estate sector.”
On the issue of delayed approvals on the part of the authority, the developer appealed to the RERA regulator to bring sanctioning authority under the preview of the Act. The Regulator Kapil Mohan said that there were multiple authorities involved in the sanctioning process. However, Sterling Group’s Shankar Sastri said that as per RERA Act, the sanction plan is the commencement certificate.
Karnataka Rera: All you want to know
After a long wait, the Karnataka cabinet finally cleared the Real Estate (Regulation and Development) Rules last week, thus, paving the way for the creation of a real estate regulator in the state.
Said to have been inspired by the Rajasthan model, the new rules will take guidance value as the cost of the project.
Highlights of Karnataka RERA –
- The builders should disclose the size of an apartment based on its carpet area.
- The builders will have to furnish the details of the past or ongoing litigations in relation to the real estate project on the real estate regulators' website.
- The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest marginal cost of lending rate plus 2 per cent.
- There is no imprisonment clause. Any person who is in custody in connection with any offence shall be set free on payment of 10 per cent of the estimated cost of the project.
- The real estate regulator's orders will be enforced by the adjudicating officer or the authority or the appellate tribunal in the same manner as if it were a decree or the order of a principal civil court.
- Projects that have applied for occupancy certificate (OC) are exempted as the same is applied only when the project is completed. In case a project has received partial OC, the exemption is accorded only to that phase which has received the OC.
Though the industry has welcomed the implementation of RERA in Karnataka, a certain section of home buyers and industry experts is not entirely satisfied with the rules. Moreover, projects that are 60% or more complete will not come under RERA. Another major concern is who will decide on the stages of completion of a project? They fear that the devil lies in the details of the new law.
Arun Sharma C.E.O writes on propertyalways.com news Forum, “What is the mechanism put in place to determine the level of completion of a project? There will be some fair play only if Real Estate Regulatory Authority conducts an audit and not if the level of completion is declared by the builder. This opens the project’s status to much interpretation.”
On the other side, asserting that RERA made a balancing act between the buyer and promoter, Ashish Puravankara, president, CREDAI Bengaluru, also aired some reservations. “It would have been effective if the Karnataka government’s notification had lowered the threshold of the plot area that came under the Act to 100 -150 sqm as against the prevailing 500 sqm. This would have helped check the deviations happening in this segment,” says Puravankara.
He explains the government’s view point of not including the projects that have completed 60 per cent execution of sale deeds. “It is to be noted here that sale deeds are executed only after the projects are completed, which is in line with the Act,” says Ashish Puravankara.
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