The Telangana state government notified the RERA registration rules for the state, in which separate processes will be applied for project registrations and agents.
The state has also expressed its interest in constituting a regulatory authority, which will have the responsibility of monitoring RERA registrations, as well as buyer-seller disputes, in line with the central rules that have been notified by other states.
The fee structure announced by the Telangana government for projects under RERA is as follows –
- Rs 5 per sq.m for residential projects where the proposed development area is less than 1,000 sq.m.
- A maximum of Rs 5 Lacs, or Rs 10 per sq.m, where the land area of the residential project exceeds 1,000 sq.m.
- Rs 10 per sq.m for mixed developments (residential and commercial projects), where the land area is not exceeding 1,000 sq.m.
- Rs 15 per sq.m, with a capping of Rs.7 lacs on the total fees, where the land area of mixed development is more than 1,000 sq.m.
- Rs 20 per sq.m for purely commercial projects, where the land area is not exceeding 1,000 sq.m.
- A maximum of Rs.10 lacs, or Rs.25 per sq.m, where the land area for commercial project development exceeds 1,000 sq.m.
- For plotted development projects, the fee will be Rs.5 per sq.m, but shall not be more than an amount of Rs.2 Lacs.
A Slight Relief for Real Estate Developers in Telangana
Additionally, while the Central Act specifies that all projects which have not received completion certificate until May 1, 2017, should come under the ambit of RERA, the Telangana government has altered the stipulation and notified that projects that have started after January 1, 2017, will only fall under the purview of RERA.
The state government is also reviewing the requests made by the Telangana Builders Federation (TBF) to cut government stamp duties and exempt the mortgage clause so that the real estate sector in the state of Telangana gets some breathing space to get through a major reform like RERA.
“Now, since Real Estate Regulatory Authority (RERA) has come into force and there is no scope for the deviation by builders, we want the government to exempt the buildings from the mortgage which are registered under RERA. This will help us by freeing up 10 percent of our cash flows,” TBF president C Prabhakara Rao said.
With the existence of RERA becoming a reality in Telangana, it is mandatory for all infrastructure companies, real estate developers, and brokers to get themselves registered with the Real Estate Regulatory Authority.
Moreover, builders will have to periodically declare necessary details about the project, such as project expenditure, bookings received, the amount collected, delivery timeline, current status, etc.
RERA will also require the developers to deposit an amount equivalent to 70 percent of the money collected from homebuyers in an escrow account, which will be utilized by the regulatory authority to complete a project in case the developer is unable to do so.
The RERA Act, promising to transform the real estate landscape, will allow homebuyers to move to the regulator if there is a delay, a non-compliance, or a violation of the agreement made with the developer.
All this, combined together, is expected to infuse more accountability and transparency in the real estate sector of Hyderabad and the state of Telangana in general.