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The Kerala government is planning to introduce a slew of measures to streamline the real estate sector. The steps include setting up of a real estate authority, online registration facility for developers and amendments to the Coastal Regulation Zone (CRZ) Act. The Minister said the government is giving its final touches to the Real Estate Authority Bill and a draft of the proposed Bill would be available in the public domain within a month’s time. The state government is keen to infuse the much-needed order into the real estate sector. In connection with this, we will soon bring out a draft of the Real Estate Authority Bill within a month’s time.
The Bill will be finalized after consultation with all stakeholders in the sector. The bill will be along the lines of the Real Estate Authority Bill introduced by the Central government. The government also plans to roll out measures to combat unprofessionalism and graft in the sector by introducing online registration facility for builders and property developers. The graft involved in getting clearances from the authorities concerned to construct a building is enormous and this in fact leads to an escalation of the project cost. The new system will do away with these illegal practices and make the process transparent.
The form should be filled in the proper format and submitted and the clearance for the building construction will be given on or before thirty days’ time. The new system will come into effect from June 1. The government has started a training facility to the officials concerned to introduce them to the new facility. The state cannot afford to stick to the CRZ norms due to the acute scarcity of land in the state. Out of the entire land in the state, only 30% is available for development, thanks to the topography of the state. Therefore, it is literally not pragmatic to adhere to the CRZ norms. The Government has already approached the Central government seeking exemptions from the CRZ norms.
The amendments to the Kerala Municipal Building Rules have given the much-needed impetus to the builders and the property developers. Kerala state has one of the highest population density and very low land availability. This creates enormous pressure and demand for the land available for development.
All Rental Agreements to be registered
In future, all rental agreements need to be registered so that all such financial transaction will be transparent and state government can get additional revenues. With this, government can also get a statistics about the income being generated from such shopping complexes and based on this income, Landlord has to pay building taxes in future. Even if the rental period need to be registered as per the new act.
Registration Fees / Stamp Duty
Based on the new rental act, Landlord need to pay 2% of the annual rent as registration fees along with 7.5% as stamp duty.
Validity of Rental Agreement
The greatest advantage of this new rental act is that a person can enter into an agreement with the Landlord for unlimited period which can be legalized. This will mutually benefit both the parties as the existing laws allow only for a period 11 months and the same need to be renewed upon its expiry.
As per new rental act, Landlord has the right to increase the rent once in three years to a maximum of 20%. With this the Landlord make sure that he / she can increase the rent by 20% after three years whereas the Tenant makes sure that there is no rent increase for the next three years.
Tenant Details to be provided to the Police
Landlord has to provide all details about the Tenant in writing to the nearest Police Station failing which fine may be imposed on the Landlord.
Rules for Vacating the premises
The new rental act clearly protects the interest of both Landlord and Tenant. Unlike earlier, neither the Landlord can ask the Tenant to vacate the flat on his own wish nor can the Tenant stick on the premises on his / her own wish. The Landlord can ask the Tenant to vacate the flat provided
The cabinet has amended a bill to regulate the real estate sector, protect home buyers and curb undeclared “black money” in property markets that costs the exchequer thousands of crores in lost taxable income.
The new rules apply to residential and commercial developments. Both residential and commercial projects come under regulator’s jurisdiction.
The bill makes it mandatory for all projects and brokers to be registered with a real estate regulator who will oversee transactions and settle disputes. Regulator has to clear cases within 60 Days.
The decision by Prime Minister NarendraModi’s government to amend the bill, which was submitted by the previous government in 2013 but not passed by the Rajya Sabha, aims to boost investor confidence and stamp out illegal practices.
During recent years, sluggish economic growth and delays in getting approvals stalled several real estate projects, leaving buyers waiting for their homes and developers holding high debt. It will lead to more transparency in Indian real estate market.
Vendors in the real estate market often demand part payment in black money, making many ordinary people party to corruption and excluding some of the emerging middle class from the market.