The Real Estate (Regulation and Development) Act, 2016, is very prominent legislation introduced by the government to bring transparency and accountability in the real estate market. The RERA Act was designed to match the needs of the real estate boom in the future, as more and more people have started investing in real estate properties. The Karnataka government notified the RERA Karnataka Rules, 2017, and has also launched an online portal for RERA-related activities on the 24th of July 2017. Let’s further discuss the different RERA rules and regulations in Karnataka.
Also Read: Reading RERA With Consumer Protection Act
RERA for Real Estate Agents
The RERA Act mandates the registration of projects and their real estate agents, builders, promoters. Some of the documents to be submitted by a real estate agent for registering himself under RERA includes:
- Documents showing the complete details of his organization. The documents should contain details such as the name, registered address, type of organization (i.e. proprietorship, societies, co-operative society, partnership, companies, etc.).
- Documents showing the registration of the company and also the by-laws, articles of association, memorandum of association, etc. The complete details of the partners and directors should also be mentioned.
- If the real estate agent is an individual and not an organization, then he is required to provide his name, registered address, contact details, and photographs.
- A self-attested copy of the PAN card and address proof needs to be produced for the registration process.
Registration Fee under Karnataka RERA
Group housing projects
Mixed development projects (commercial and residential)
The registration fee for the plotted lands is Rs.5 per sq. meter of the total land area or a maximum amount of Rs. 5 Lakhs.
RERA for buyers
The RERA Act is consumer-centric and provides home buyers the opportunity to verify the potential properties using government means. If there is any complaint that arose in the real estate transaction, the homebuyers can file a complaint with the Regulatory Authority regarding the violation. A complaint can be filed using its online platform at a nominal value of Rs. 1000.
The RERA Act has laid down certain rules and regulations to ensure that the real estate transaction is carried out transparently and efficiently. The Act mandates every state to establish a real estate regulatory body. The real estate regulatory authority hereby referred to as RERA, is bestowed with the right to verify the authenticity of the transaction and to provide relief to the homebuyers as soon as possible.
Guidelines for property advertisement
The Karnataka RERA has issued certain guidelines for regulating the advertisement actives for real estate properties. The guidelines apply to all print and electronic modes of advertisements. The main reason for the government to draft these guidelines was that several real estate projects were promoted providing false information and without RERA registration details. These are some of the guidelines laid by Karnataka RERA for the promoters and agents:
- The digital portals are to be self-maintained. You must ensure that there is no wrong information circulated through the advertisements. It is also important that you mention all the details regarding the RERA registration in the advertisement.
- The digital platform chosen for advertisement activity should be registered with the regulatory authority within two months if their activities spread across Karnataka. However, they may not be registered as real estate agents. They can act as a mere advertising agency and ask the viewers to cross-check the information provided through sources such as RERA.
- If the completion certificate is obtained before the 11th of July 2017, then you must mention the same in the advertisement.
- The display board at the project site should also contain the RERA Karnataka Registration number mandatorily.
- While advertising through print media, hoarding, or any other visual medium, it is mandated according to the Karnataka RERA rules and regulations that you mention the registration number on the top right corner of the advertisement. The font size of the registration number should also not be less than the font used for the project name.
- You are required to mention the Karnataka RERA website in the advertisement in case the investor is looking for more details on the project.
- The advertisement should also not contain any disclaimer stating that it is subjected to change.
Benefits For homebuyers under RERA
- The website allows homebuyers to track the development progress.
- Buyers are not charged for the super built-up area, therefore this excludes lifts, staircases, and other amenities.
- Projects are less likely to be delayed because 70% of the payment will be used for construction fees.
- For up to 5 years, the developer is liable for any flaws in the building.
- If a dispute emerges with the buyers, it must be resolved within 120 days.
- In the event of a delay, developers and buyers must pay a 2% interest rate over the SBI’s Marginal Cost of Leading rate.
The introduction of RERA was to ensure that the transactions are carried out without any fraudulent or misleading activities. In case of any such activities, the Act provides for a mandatory regulatory authority to redress disputes quickly. Despite all this, you must exercise due diligence during your property purchase and cross-check all the details and documents even if they are provided on the RERA website. Assetmonk is an online platform offering real estate opportunities. Assetmonk offers products in three main categories: Growth, Growth Plus, and Yield properties. We also offer different types of properties such as commercial, residential, co-living, senior-living, etc. Visit our website for more details.
Frequently Asked Questions on RERA Karnataka:
RERA rules provide for mandatory registration of projects, builders and real estate agents, quarterly updating of construction details, sales agreement standardization, maximum of only 10% of the cost as an advance on constructions, etc.
The main purpose of the RERA Act is to ensure transparency and to avoid any fraudulent activities. It aims to regulate the purchase and sales transaction and hold the builders or developers accountable for their actions.
RERA stands for Real Estate Regulatory Authority. The RERA Act stands for Real Estate (Regulation and Development) Act, 2016.
Buying a RERA-approved project is a comparatively safe way to invest. However, it may not be 100% safe. Thus you must cross-check the details, title, document, etc. of your property before purchasing to be completely safe.
If the project is not RERA registered then you may ask the builder to register the property under RERA authority or file a complaint with the regulatory authority.