Over the past three decades, the Real Estate industry has expanded rapidly to meet the housing needs of the upwardly mobile middle class. It has become the second-largest employer in the country. However, due to the lack of regulations, the industry has faced numerous challenges leading to various issues. The Real Estate Sector in India has been governed by multiple laws, enacted by both the Central and the State Governments. Such laws were mostly curative from the customer's point of view. Due to the unregulated nature of the sector, many issues existed, such as a lack of transparency in project specifications, non-adherence to agreed project completion period, and deviations from agreed project components. As a result, customers have often been victims in such situations, leading to a decline in their trust in the sector. This has necessitated the need for a regulatory law, which should be preventive rather than curative. The Parliament passed the Real Estate (Regulation and Development) Act in 2016 to address the need. Following this, Government of Kerala made the Kerala Real Estate (Regulation and Development) Rules in 2018 and established K-RERA (Kerala Real Estate Regulatory Authority) towards the end of 2019. In the exercise of the powers conferred under section 85 of the Real Estate (Regulation and Development) Act in 2016, the Authority promulgated the Kerala Real Estate Regulatory Authority (General) Regulations, 2020.

Significance of RERA ACT 2016

From the property buyer’s perspective, consumer protection laws are largely curative, not preventive. In an unregulated sector, customer confidence will be diminished. To build that confidence, Parliament passed the Real Estate (Regulation and Development) Act, of 2016.
In Kerala, it is expected to further boost investment opportunities in the state's real estate market and create more job opportunities for people from all walks of life.
As the Real Estate market of Kerala is growing, the need for regulation and transparency has become increasingly important. The introduction of the Kerala Real Estate Regulatory Authority (K-RERA) has been a game changer in this regard. K-RERA ensures fair play and standardization in the Real Estate sector of Kerala. K-RERA helps to ensure that home buyers get what they are promised by developers. The Authority also ensures that all transactions are done in a transparent manner, providing an assurance to buyers that their investments will be safe. K-RERA has helped to foster trust between developers and buyers, leading to an increase in investments in real estate projects across Kerala. K-RERA guarantees a speedy redressal mechanism in handling grievances.

Kerala Real Estate Regulatory Authority (K-RERA) has been constituted as per Notiﬁcation Number GO(P). No. 65/2019/LSGD dated 5/10/2019. Backed by the overarching mandate, K-RERA strives to be a powerful champion for the real estate sector, promoting accountability, citizen-centric policies, and improved ﬁnancial discipline while defending the interests of the customer.

Statutory Frameworks of K-RERA

Real Estate (Regulation & Development) Act, 2016

The Act calls for the setting up of a Real Estate Regulatory Authority (RERA) in every State and Union Territory for the regulation and promotion of the real estate sector in an eﬃcient manner and to protect the interest of the consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal. The Act also ensures greater accountability and transparency in the real estate sector through the Authorities.

Kerala Real Estate (Regulation and Development) Rules, 2018

Kerala Real Estate (Regulation and Development) Rules, 2018 was notiﬁed by the Government of Kerala vide GO(P) No 46/2018/LSGD dated 18/6/2018. As per Rule 3 of the said Rules the promoter should make an application along with the prescribed fee to the Authority for registration of new real estate projects/ ongoing projects for which all statutory approvals and permits have been obtained as prescribed under Section 4 of the Act.

Kerala Real Estate Regulatory Authority (General) Regulation, 2020

In exercise of the powers conferred under Section 85 of the Real Estate (Regulation and Development) Act, 2016, the Kerala Real Estate Regulatory Authority formulated Kerala Real Estate Regulatory Authority (General) Regulation 2020, which was notiﬁed by the State Government on 11.06.2020. The Regulations, 2020 were formulated for the procedural formats to be followed by the Authority and for monitoring the progress of the registered projects.

Key Features of RERA ACT 2016

Registration - Every promoter shall register Real Estate projects with K-RERA before advertising/ marketing/ booking/ selling/ offer for sale. Projects which are ongoing as of 1^st May 2017 are also registrable. Registration is required for projects where the area of land proposed to be developed exceeds five hundred square meters or the number of apartments proposed to be developed exceeds eight even if the land area proposed to be developed is below 500 sq. m. Any Real Estate Agent who facilitates the sale or purchase of such Real Estate projects should also register with the Authority. The registration, which is online, requires uploading of all documents including land details, permits, project plans, layout, specifications, NOCs, details of the promoter, project completion date, etc. These reports and details are in the K-RERA web portal thereby ensuring transparency and enable the buyers to make an informed decision. All the advertisements, and marketing/ publicity materials of the project should display the RERA registration number.

Designated Account - The promoter shall transfer 70% of the amount received from the allottees for the project in a separate account. Amount from that account can be withdrawn only based on a certificate of progress by an Engineer, Architect, and Chartered Accountant. This ensures that no funds are misappropriated/ diverted.

Monitoring by RERA - The Authority is empowered to monitor the Real Estate Projects through quarterly project reports, annual audit reports, and if necessary, through inspection. These details are in the K-RERA web portal which is available through public search.

Dispute Resolution - The Authority is also empowered to resolve disputes between buyers, developers, and agents through a quasi-judicial proceedings by issuing enforcible orders and directions. Any aggrieved person can file a complaint with the Authority or the Adjudicating Officer against any promoter, allottee, or Real Estate Agent for any violation or contravention of provisions of the Act, Rules, and Regulations.

Imposition of Penalty - The Authority is empowered to impose a penalty through a quasi-judicial proceedings, if any promoter, allottee, or Real Estate Agent violates provisions of the Act, Rules, or Regulations, which may extend up to 10% of the project’s estimated cost in case of non-registration of the projects, upto 5% of the project cost for other violations.

Allottees’ Association - The promoter shall facilitate the formation of a Registered Allottees’ Association once 50% of the units are booked. Once the project is completed the promoter shall transfer all the common areas to the Registered Association. The Registered Association shall take care of the maintenance and management of the common areas in the future.

Transparency Measures of K-RERA

Land Details, Project plans, layout, specifications, NOCs, and project progress are available for public search through the K-RERA web portal.
Allottees have the right to receive copies of all documents, while the association can receive originals of all documents and plans, including those of common areas.
The promoter of a Real Estate project must deposit 70% of the amounts realized from the allottees from time to time. Once this is done, an annual report on the statement of accounts in Form No. 5 must be prepared, certified, and signed by a Chartered Accountant in practice. The promoter must then upload this report to the allotted webpage on the website of the Authority on or before 31st October every year until the project is completed. This report is available to the public through the web portal.
Every project promotion or advertisement shall contain a Quick Response (QR) code and the registration number and website address of K-RERA. The scanning of the QR code leads to the web page of the project.