What is RERA?
RERA stands for Real Estate (Regulation & Development) Act 2016. The RERA is a law passed by the parliament of India. The main objective of RERA is the protection of housing properties buyers from the probable misdeeds of the real estate developers. The transparency in dealings related to property matters brought by RERA has acted as a catalyst for growth in the real estate sector. These reforms put the home buyers at ease thought the country.
Impact of RERA on real estate in Kerala
The state of Kerala implemented its own version of RERA, titled K-RERA. This Act follows the parent law and sets clear guidelines for real estate developers. Accordingly, properties developed in Kerala over 500 square feet and more than 8 apartments in a single phase, need to be registered under K-RERA.
Following are the positive impacts of RERA on real estate in Kerala:
- Any property which is not registered under RERA cannot be advertised for sale.
- At least 70% of the money collected in advance, through down payments from the customers, needs to be deposited in a bank account.
- Real estate developers need to display updates about the projects and details of bookings on the official RERA portal every three months.
- A RERA registered property that is under construction needs to be sufficiently insured before being handed over to the buyer.
- The Realtor is required to pay for repairs in case of any damage caused to the apartment because of faulty construction during the period of up to 5 years from handover. Buyers do not have to pay for such repairs.
- The K-RERA Act entitles the buyer of a flat to have the complete set of documents for the transfer of ownership rights of the property. The documents of ownership need to be given to the buyer, along with the occupancy certificate.
- Unless the buyer signs the sale deed, a real estate developer can not charge more than 10% of the market value for a property.
- On the execution of the sale deed, K-RERA provisions do not allow real estate developers to make any changes to the building plans unless approved by the buyer.
- The amount held in the bank account needs to be maintained until the real estate developer hands over the certificate of completion to the buyer.
- Any violation of the K-RERA norms could lead to huge penalties and even the imprisonment of the real estate developer. Hence, real estate developers have started strictly following these guidelines.
If you are a home buyer in Kerala, you should choose a housing property that is registered under K-RERA. This is as important a decision as zeroing down on a home loan with interest rates that are best suited to your needs.
As a potential home loan customer in Kerala, you have many options to pick from. All the leading financial institutions offer loans on housing properties. Most of them also have an online application system where you may apply for a loan from the comfort of your home. You can also use the online home loan EMI calculator to find out the probably EMI.