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Presentation Overview - Contents Overview of the Act / Statute
RERA Nationwide View
Central Act, State Rules, Present KA Status
Applicability of the Act, Rules and Prior Registration of Real Estate Projects
Change in Practice – Pre and Post RERA
Professional involvement
Offences & Penalty, Authorities, Adjudication etc
Allottees – Rights and duties
Q & A / Open House<br>
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Statement of Objects and Reasons of the Act Ensure Accountability Towards Allottees and Protect their Interest;
Infuse Transparency, Ensure Fair-play and Reduce Frauds & Delays;
Introduce Professionalism and Pan India Standardization;
Establish Symmetry Of Information between The Promoter And Allottee;
Imposing Certain Responsibilities On both Promoter And Allottees;
Establish Regulatory Oversight Mechanism to Enforce Contracts;
Establish Fast- Track Dispute Resolution Mechanism;
Promote Good Governance in the Sector which in turn would create investor confidence;<br>
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RERA – Nationwide View 21 States and 7 Union Territories (UTs) have implemented RERA [framed rules as required under Section 84 of the Real Estate (Regulation and Development)Act]
Out of these, 23 states / UT’s have a fully functional online RERA portal
Out of these only 18 States – KA, AP, Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, Punjab etc., have established permanent Real Estate Regulatory Authority, while 10 States/ UTs have set up interim authorities
Few States/ UTs have named the Appellate Tribunals under the Real Estate Act, Few States have begun the online enlistment under the Act
Maharashtra has seen the maximum response in project registrations (~20,000 project registrations) with its real estate regulatory authority
Uttar Pradesh ~2,600, in KA 3000 , Gujarat 4962, and Madhya Pradesh 2109
While deviation from the model Act is the main cause for concern, slow progress of states in operationalizing
Regulators imposed fine on Promoters for delayed registration
Maharashtra has a conciliation forum (which has representation from Builders' and Consumers' Associations) to speed up dispute resolution between buyers and property developers<br>
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RERA Act – 92 sections with 10 Chapters<br>
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RERA Act and Karnataka - Snapshot Central Act came into force with effect from May 1, 2017
Karnataka Real Estate Regulation and Development Rules, 2017 was approved by Government of Karnataka and notified on July 10, 2017
Government of Karnataka appoints Principal Secretary to Government of Karnataka, Department of Housing as the Interim Authority - Section 20 (1)
To appoint one or more adjudicating officers to settle disputes and impose interest and computation
Government of Karnataka appoints Karnataka Appellate Tribunal as Interim Appellate Tribunal - Section 43 (4)<br>
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RERA - Karnataka - Snapshot Online – Applications for Registration of projects accepted through website from 24th July 2017
Online – Applications for Registration of Agents accepted through website from 24th July 2017
Made mandatory filing for ongoing project within 3 months from 1st May 2017 – i.e., by 31st July 2017<br>
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RERA - Karnataka – So far – India’s Top 3<br>
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Applicability of the Act<br>
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Ongoing Projects – KA RERA Rules Development is going on for which completion certificate has not been issued Layouts - Streets and civic amenities sites and other services have been handed over to the Local Authority for maintenance Exceptions / Exclusions Apartments - Common areas and facilities have been handed over to the registered Association of Allottees Projects – all development works have been completed and 60 % sale deeds have been registered / executed Projects – all development works have been completed and application for CC / OC is filed (completion / occupancy) Projects in Phases - Partial occupancy certificate is obtained in case of projects are in phases Inclusions All ongoing projects shall be registered within 31st July 2017<br>
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Prior Registration Section 3. Prior registration of real estate project with Real Estate Regulatory Authority
Promoter shall not
advertise,
market,
book,
sell or
offer for sale,
or invite persons to purchase
without registering the real estate project with RERA Authorities<br>
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Post RERA – Business Cycle<br>
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Post RERA – Customer Transactions<br>
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Post RERA – Change in Practices - Transformation<br>
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Post RERA – Change in Practices - Transformation<br>
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Key Differentiators<br>
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Professional Opportunities -<br>
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Professional Opportunities - Review / Outsource<br>
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Professional Opportunities - Compliances Added cost of compliances may also indirectly impact pricing: Disclosures and Transparency Registration costs Insurance – Construction and Title Structural defect liability period – 5 years Ongoing compliance costs Restricted utilisation of funds to specific projects Certifications and Audits<br>
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Initial Backlog Increased Project
Cost Tight Liquidity Rise in Cost of Capital Consolidation Increase in Project Launch Time Initially, a lot of work is to be done to get the existing and new projects registered. Details such as status of each project executed in last 5 years, promoter details, detailed execution plans etc. needs to be prepared. Registration, regular update with RERA and
insurance cost for construction Land and approval costs to be meted out of internal accruals as pre launch concept may end . It may lead to a shift in equity financing from debt financing prevailing currently The cost of capital may go up as developers may now have to fund the land, the approval cost through equity. With frequent delay in obtaining approvals, debt funding may not be an ideal route for project With entry in the sector made difficult, the sector may witness consolidation. Strong financial and execution capability is required to launch a project. The development model/agreement may gain prominence The project launch time may increase since a lot of time will involve in finalizing finer details before launching a project. Details such as structuring of project, financials, risk mitigation, complete drawings utilities layout, etc. Needs to be finalized before project starts.<br>
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Offenses and Penalties<br>
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Allottees – Rights and Duties<br>
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Allottees – Rights and Duties<br>
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Allottees – Rights and Duties<br>
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Allottees – Rights and Duties<br>
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Allottees – Rights and Duties<br>
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RERA CONSULTANTS LLP
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Tel – 080 - 2346 2003
consult@reraconsultants.in
www.reraconsultants.in<br>
