Karnataka became the 14th state to pass the Real Estate (Regulation and Development) Act 2016 or RERA, on Wednesday. The customer-centric Act aims at protecting the right of homebuyers and usher transparency in the fast growing real estate sector.
Karnataka was one of the first few states to notify the draft rules after the Central Government’s RERA Act came into force on 1st May 2016. However, it dragged the approval of the final rules and missed the central government deadline to pass the Real Estate Regulatory Authority and the Real Estate Appellate Tribunal by 1st May 2017.
There has been a lot of questioning and speculation regarding the delay in passing the RERA Act by the Siddaramaiah-led Congress government.
On-going projects to be excluded
As per an official directive issued on 6th July 2017, the state government of Karnataka has stated that all on-going real estate projects in the state will be exempted from RERA Act 2016. This is subject to the fact that the sale deed has been executed or around 60% of the real estate project has been completed. According to T.B. Jayachandra, the rules have been formulated after detailed study of policies implemented under this law and each in other states like Gujarat and Rajasthan. The Minister stated that all builders have to treat guidance value as base price to estimate project cost.
A clear picture can be drawn once the state issues a Gazette notification in the next 3-4 days.
The BJP government has earlier threatened the state government to launch an agitation demanding the implementation of RERA 2017 if the government fails to pass the act by July 10. Suresh Kumar, the Bharatiya Janata Party (BJP) leader and former law minister took to Twitter on Wednesday to express his opinion. “RERA Karnataka Rules approved by the state cabinet at last. But yet to know whether the rules are not watered down,” he tweeted.