The notification regarding permanent approval from Real Estate Regulatory Authority, Karnataka (RERA-K) had created uncertainty among 542 ongoing projects in Bengaluru.
The notification dated 1st April, 2018 mandated that builders should get permanent approval before advertising projects, entering into agreements and accepting advance money from customers.
Since the Real Estate Regulatory Authority Act came into effect on July 10, 2017, the authority had adopted a process of issuing a provisional approval number to applicants, allowing them to do business. The authority has processed 2,056 applications, of which 1,466 have been approved. As many as 385 projects are under consideration, 157 are under query and 52 have been rejected. All these were operational on the basis of provisional approval and in many of them, more than half the work has been completed. With permanent approval becoming compulsory, these projects have virtually been rendered illegal.
Due to the notification equivocation, hundreds of the ongoing projects are in abeyance. The biggest issue is that builders have collected money from customers and invested it in projects.
P Sunil Kumar, secretary of RERA-K, clarified that builders are at fault as they were not supposed to take money from customers and do business based on the provisional approval number given to them. Section 3 of the RERA Act clearly says no promoter shall advertise, market or sell the product until the project is permanently approved. The provisional approval number is an acknowledgement of sorts and has no legitimacy.
According to Section 3 of the RERA Act, the application is deemed approved if authorities fail to process it within 30 days. Kapil Mohan, Chairman of RERA-K mentioned that the notification comes into effect prospectively and the builders have to get permanent registration for projects from 1st April, 2018 and ongoing projects with provisional approval can continue business.
Courtesy/By: Bhupendra Yadav
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16 Apr 2018
