K-RERA Pushes for Government Intervention to Block Sale of Unregistered Plots

By Staff Reporter

The Kerala Real Estate Regulatory Authority (K-RERA) has recently made a recommendation to the government, urging them to intervene and prevent the sale of development plots that are not registered with K-RERA. If approved, this move could pose significant hurdles for individuals attempting to sell such plots. K-RERA has formally written to the chief secretary, requesting a directive to the registration department that would prohibit the registration of sales deeds for unregistered plots.

According to existing laws, any development project exceeding 500 sq m of land or featuring more than eight apartments, villas, or plots necessitates mandatory registration. However, numerous real estate developers have been circumventing this requirement, arguing that registration is only necessary if a project meets both criteria. In response, K-RERA has clarified that each criterion is independent, warning of potential penalties for those found in violation.

Citing the example of Tamil Nadu, where a similar directive was issued to sub-registrars resulting in increased compliance, the letter highlights the potential benefits of implementing this recommendation. The government is currently deliberating on the matter, and if approved, this rule would substantially enhance compliance levels within the real estate sector.

Additionally, the proposed directive would bolster the government’s revenue from stamp duty and registration fees. Sales deeds typically record actual sales transactions, enabling sub-registrars to determine whether a real estate project requires RERA registration by examining details such as property extent and accessibility.

K-RERA Chairman P H Kurian explained that the recommendation was prompted by customer complaints regarding bookings made in unregistered projects. Furthermore, numerous violations were identified through social media advertisements, leading to proactive measures by K-RERA. Kurian expressed hope that the clarification would foster greater compliance, providing enhanced protection for buyers under the provisions of the Kerala Real Estate (Regulation and Development) Rules, 2018. Similar clarifications were previously issued in Delhi and Rajasthan.

Offenders found in non-compliance could face penalties of up to 10% of the project cost. K-RERA is actively collaborating with local self-governments to identify and address violations. Local self-government secretaries have been instructed to report projects lacking K-RERA registration and the mandatory permit from local self-governments. It is worth noting that all real estate projects, regardless of their size, require permits from the local self-government.

By urging the government to intervene, K-RERA seeks to ensure that unregistered plots are not sold, fostering greater transparency and accountability within the real estate market. If implemented, this initiative would provide a significant boost to the sector’s overall compliance and enhance consumer protection in Kerala.