Karnataka notifies RERA rules, wrecked home buyers’ expectations

Karnataka notifies RERA rules, wrecked home buyers’ expectations

The Karnataka state government notified the Karnataka Real Estate (Regulation & development) Act, RERA on Monday. The act mandates developers to register their project and real estate agents to register themselves with the authority.

As per the notified rules, all on-going housing projects and plot development projects which are at least 60% complete or 60% of the sale deed is executed will not come under the Ambit of the RERA Karnataka.

According to the RERA rules notified by the central government, projects which have not received the completion certificate will come under the RERA.

This is the dilution in the parent Act. We were building castles in the air thinking that the state government will understand the problems faced by the buyers but, it has laid down our expectations, says Subbayiah Reddy, a suffering home buyer.

Apart from this, the state government has kept the rules for penalties unchanged wherein the developer has to pay 10% of the project cost or imprisonment up to three years or both in the case of ambiguities and misconduct in the business. Again, the provision on which the realtor attracts the penalty is not clear.

The Act also states that the builders should sell the real estate unit on the basis of the carpet area and have to deposit 70% of the amount taken from buyers for project development in an escrow account.

The government has notified the RERA only for the namesake. The developers can easily manipulate the conditions in their favour. The government is providing helping hands to them in doing so, said Muthuppa Gowda, a real estate expert. This loophole in the Act is intentionally created by the government which will not help suffering home buyers, he added.

According to the Karnataka RERA notification published by the state government “On-going project” means a project where development is going on and for which completion certificate has not been issued but excludes such projects which fulfil any of the following criteria on the date of notification of these rules :-

  1. In case of layouts where the streets and civic amenities sites and other services have been handed over to the Local Authority and Planning Authority for maintenance
  2. In case of apartments where common areas and facilities have been handed over to the registered Association consisting of majority of allottees
  3. The projects for which the development works have been completed as per the Act and certified by the competent agency and sale/lease deeds of sixty percent of the apartments/houses/plots have been registered and executed
  4. The projects where all development works have been completed as per the Act and certified by the competent agency and application has been filed with the competent authority for issue of completion certificate /occupation certificate
  5. Projects for which partial occupancy certificate is obtained to the extent of the portion for which the partial Occupancy Certificate is obtained

The Karnataka government approved the RERA rules last week and notified the same to regulate the real estate sector of the state. The RERA will act as a watchdog in the real estate sector. It is meant to infuse transparency and enhance professionalism in the real estate sector.


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