Home buyers flock to Real Estate Regulatory Authority

THIRUVANANTHAPURAM: Complaints against builders, mainly pertaining to delayed completion of projects, galore at the newly- formed Real Estate Regulatory Authority, even as it could not initiate stringent action owing to the delay in framing rules. In the last couple of months, over 60 complaints were received by the authority, which is based here. "Ninety-nine percent of the complaints pertained to delayed completion of projects," said authority chairman S. Ajayakumar. Since the rules for the functioning of the authority were yet to be framed, it was unable to initiate any strict action or impose penalties against the errant builders. "We are now inviting the complainants and the builders concerned and trying to reach a settlement," said Mr. Ajayakumar.

Many customers, who had paid over Rs . 50 lakh, have been waiting for years for the completion of the projects. Owing to the delay in the court proceedings, many depend on extended deadlines promised by the builders. A couple of complaints pertained to projects of Samson and Sons Builders, whose promoters, including Dhanya Mary Varghese, were recently held by the police on cheating charges. A representative of the firm had appeared for initial rounds of conciliatory talks, but later he did not come. "The customers send complaints to the authority though it is yet to get statutory powers. This reveals the crisis in the sector," said Mr. Ajayakumar, who was a former chief town planner. It is estimated that at present about 1,000 projects, including apartments and villas, are ongoing in the state and an equal number of new projects are on the anvil.

Both customers and genuine builders are also looking forward to the legal empowerment of the authority. Once it becomes effective, many fictitious builders would not be able to fleece the customers and the genuine builders would get more credibility. "It seems many builders are trying to push projects before the authority gets statutory powers," said Mr V.K. Sankarankutty, president, Apartment Owners' Apex Association. The authority will register all the builders and the new projects making the builders more accountable. The Confederation of Real Estate Developers' Associations of India (CREDAI) also welcomed the authority. "At present many errant players in the field are causing damage to the entire sector. Once the authority enforces stringent regulations, only genuine players will remain in the field and this would even enhance the credentials of the genuine players," said CREDAI secretary general Mr. S N Reghuchandran Nair. About 200 builders in the state are members of CREDAI. The confederation has its own grievance cell to consider the complaints of customers. "In case the builders do not adhere to the cell's directive, we issue a letter to the customers, which would help them approach the consumer forum," he said.

Central Act to give more teeth to body

The state government may implement the central real estate regulatory law which contains many stringent provisions than the state law. According to state government sources, the Kerala Real Estate (Regulation and Development) Act - 2016 may be repealed soon and the Real Estate (Regulation and Development) Central Act will be enforced in the state. "We are in the process of repealing the state Act," said a local self-government department official. Compared to the state Act, the central law brings even smaller projects under the purview of the Real Estate Regulatory Authority. While the Kerala Act says that projects with an area of above 1000 square metres would come under the purview of the authority, in the central Act the area is only 500 square metres.

Similarly, under the state Act, only projects with 12 units or more will come under the purview of the authority, whereas in the central Act it is eight units. The state Act covers projects launched after the notification of the rules, but even ongoing projects would come under the purview of the central Act. In both the state and central Acts, imprisonment is warranted only to sellers, whereas in the central Act even buyers may get a maximum jail term of three years for default in payments of charges to the builders. The Real Estate Regulatory Authority had prepared draft rules on the basis of the state and central Acts and submitted them to the government.

Meanwhile, the Confederation of Real Estate Developers' Associations of India is apprehensive over bringing the ongoing projects under the purview of the Act. "It would not be practical for the authority to check the complaints of ongoing projects too considering the number projects," said CREDAI secretary general Mr. S.N. Reghuchandran Nair. He also suggested that other stakeholders in the sector like local bodies, fire safety department, KSEB and KWA should also be brought under the Act. "Many projects are held up due to the failure of these agencies to give various clearances. Hence they also need to be made accountable," said Mr. Nair.