THIRUVANANTHAPURAM: Empowering home buyers, who invest money in units at the start or during various construction stages of a project, the Real Estate Regulatory Authority has asked builders to form an association of such allottees. The move will allow investors to collectively monitor the project’s progress.
Though a forum of such consumers has the backing of the Real Estate (Regulation and Development) Act, 2016, it is yet to gain traction here. “It is the promoter’s (builder) responsibility to facilitate the formation of an allottees’ association when over 50% of units in a project are either sold out or booked.
Only a small section of projects have such an association at present. Our feedback from realtors is that consumers are not showing interest in it,” said P H Kurian, chairman of Kerala-RERA, which has asked builders to comply with the law.
Kurian said the promoter will have to convene a meeting of allottees to help them form the body. “Association representatives can monitor the progress of the work and hold talks with the promoter if they require any changes. They can also take up violations of agreement by the promoter with K-RERA.
The association will benefit builders too as it would be a single point of contact with consumers,” he said. The association can be converted into owners’ association after completion of the project. M A Mehaboob, chairman of CREDAI-Kerala, says buyers are largely unaware of the association’s relevance. “They think an association is required only after completion of a project,” he said.
K-RERA for awareness among home buyers
M A Mehaboob said in most cases, a formation meeting could not be held for want of quorum. “Also, many would be non-resident Indians who would find it difficult to attend meetings. Buyers show interest only when a project faces problems like delay,” he said. K-RER A is devising programmes to create awareness among consumers on monitoring of projects.
“Consumers should always be cautious. RER A is offering a host of services to equip them. Declarations uploaded by promoters on our website would help them choose the right builder and closely monitor the project’s progress,” says P H Kurian. Information on projects registered with the regulator and promoters are available on rera. kerala.gov.in.
These include the audited balance sheet of the promoter of past three years. It would help a prospective buyer to check whether the builder is financially sound. All necessary approvals from government departments are also uploaded. The promoter also has to upload an annual account statement of the project audited by a chartered accountant and quarterly updates on the work’s progress. This allows consumer to know about the total amount collected for a project, actual spending and balance.
The provision is aimed at checking fund diversion. In instances of a violation of agreement, like delay in work, the association or a consumer can lodge a case with KRERA for a fee of Rs 1,000. K-RERA has also initiated penal action against promoters who have not shared their project’s account statement for 2020-21. The original deadline, September 2021, was extended due to the pandemic. Still, about 25% of around 600 registered projects have not filed it. Erring promoters will have to pay fine upto 5% of the project cost.
It’s builders’ duty