A host of regulatory changes have dramatically altered the scenario in the real estate sector in the state
The year 2019 has been one of regulatory upheaval for the real estate sector in the country. This has been particularly true for Kerala. A host of regulatory changes such as the new building codes, the setting up of the Real Estate Regulatory Authority, GST, and Coastal Regulation Zone rules have kept builders on their toes.
THE NEW BUILDING CODE
The state government has notified the Kerala panchayat building rules and Kerala municipality building rules 2019. The new rules supersede the existing ones that were notified two decades earlier in 1999.
The new rules come in the wake of the Rebuild Kerala initiative launched by the state government after the floods that submerged vast tracts of land in the state. The post-disaster need analysis (PDNA) report prepared after the 2018 floods by the state government with help from experts from the UN and EU had called for updating the building rules to deal with the natural hazards faced by the state.
The new rules make some significant changes that will have a big impact on the real estate sector in the state.
Distance from notified roads
Earlier the rules allowed residential buildings with a total built-up area between 8000 sq m and 18000 sq m to be constructed adjacent to 6m wide roads. The new rules stipulate that such buildings can be constructed only if the plot abuts a road that is at least 7m wide.
For buildings with built-up area more than 24000 sq m(18000 sq m for hotels and resorts), access roads with at least 10 m width are required. This will reduce the availability of land for big projects, as most of the roads in Kerala are less than 7 m wide. An increase in prices of land and a corresponding increase in apartment prices may follow.
Height of the building
The rules specify that the maximum height of the building shall not exceed twice the sum of the width of the street abutting the plot and the distance from the building to the abutting street.
The new rule will make even buildings with five floors and under 16 metres figure in the high-rise category. This change will affect low-cost housing formats that follow the principle of “one floor parking and four floor apartments” on small land parcels.
Built-up area vs Carpet area
The new rules do away with the concept of carpet area (actual usable area in any building) and use the built-up area in its place. All the amenities that were to be provided was earlier based on the carpet area. Now, these have been linked to the built-up area.
While existing rules mandate off-street parking space for different occupancies proportionate to the carpet area, the new rules calculate parking requirement based on the built-up area. Further, the parking area provided inside the building shall not be considered while calculating the built-up area.
Another important change is that the car parking area has been included while calculating the Floor Space Index (FSI). This will in effect reduce the FSI as the area used for providing parking space will use up the FSI. Consequently, an area that could accommodate 100 flats earlier can now have just 70 flats. Hence the builders fear that the new rules might lead to a 30 per cent increase in the price of apartments.
All permits will be processed through the intelligent building plan management system. The system runs based on the KMBR 1999, and the significant changes made in the revised rules, have to be updated in the system. In the interim, processing the applications might be held up. Many applicants might have to submit revised drawings in accordance with the new rules.
Frequent violations in the approved building plan was a major issue that the state faced. To curb violations and deviations from the original plan, a Post-Occupancy Audit is being introduced as part of the new rules. The Secretary of urban local bodies may carry out an audit within two years of issue of occupancy certificate. Residential buildings up to two storeys and commercial buildings up to 50sq m are exempted from this rule.
The permission of the Secretary is needed for digging new wells. No leech pit, soak pit, refuse pit, earth closet or septic tank is allowed within a distance of 7.5 m radius from any existing well. Rainwater harvesting(RWH) has been made compulsory for all buildings irrespective of their size. For houses, a 25litre RWH system has to be built for every sq m of covered area, while a 50litre RWH system is needed for commercial buildings.
The rules also make solar energy installations compulsory for apartment houses or residential flats with a total built-up area exceeding 500 sq. metres(400 sq metre for single- family residential buildings). The solar photovoltaic system should generate at least 5% of the connected load of the building. The occupancy certificate will be issued only once the solar PV system is installed. The designers should make sure that the buildings have an open area which receives direct sunlight for hosting the system.
The rules also make planting trees mandatory. The owner or occupants of buildings with plot area exceeding 450 sq m other than a single-family residential building are required to plant a minimum of one tree per 450 sq.m of plot area.
Kerala-RERA gets going
The Kerala Real Estate Regulatory Authority (KRERA) is set to begin registration of real estate projects on 1st January 2020. The Authority has been constituted under the Real Estate (Regulation and Development) Act, to ensure transparency in the real estate sector and protect consumer interests.
All new real estate projects, and ongoing projects which haven’t yet received the occupancy certificate, have to be registered with the KRERA. The developers should register the projects online, along with the registration documents, clearances received and the offers given to customers. The registration fee for different projects has also been specified. Only registered projects will be allowed to launch or advertise the projects and violators could be fined 10% of the project cost.
Both buyers and sellers could register complaints with the RERA through the website to enforce the contractual obligations. An adjudicating officer will hear the compensation claims. Appeals could be filed with the Real Estate Appellate Tribunal and then at the High Court.
GST in real estate
The GST Council, in its meeting held on February 24, 2019, slashed tax rates for under-construction flats in the affordable category to 1%. The GST rate on other categories was reduced to 5%, effective April 1, 2019. Earlier, GST was levied at 12 per cent with input tax credit on payments made for under-construction property or ready-to-move-in flats, where the completion certificate was not issued at the time of sale.
The GST Council also approved a transition plan which allows builders to choose between the old tax rates and the new ones for under-construction residential projects.
CRZ Rules – A sea change
CRZ-I has been divided into CRZ-IA(ecologically sensitive areas) and CRZ-IB (intertidal zone). Eco-tourism activities, public utilities such as roads on stilts and pipelines are allowed in CRZ-IA while activities such as land reclamation and bunding for ports, defence and roads are allowed in CRZ- IB.
The freeze on Floor Space Index in CRZ-II has been removed. FSI as per prevalent town and country planning regulations prevailing as on the date of the notification will be allowed in CRZ- II. This allows taller buildings to be constructed in developed areas.
CRZ-III zone has been divided into two. Areas with a population density more than 2161 per sq km fall under CRZ- IIIA while the rest falls under CRZ- IIIB. The No Development Zone (NDZ) for CRZ-III A has been reduced from 200 metres to 50 meters from the High Tide Line (HTL). Temporary tourism facilities such as shacks, toilets or washrooms, change rooms, shower panels and walkways constructed using interlocking paver blocks shall be permissible in the NDZ and beaches in the CRZ-III areas.
Obtaining CRZ clearances have also been made easier. Clearances for projects in CRZ-II and III will now be issued at the State level. CRZ clearance by the Central government will be needed only for projects which are located in the CRZ-I (Ecologically Sensitive Areas) and CRZ IV (area covered between Low Tide Line and 12 Nautical Miles seaward).
The norms also specify a No Development Zone of 20 meters for islands.
Centre approves Kerala’s semi high-speed-rail project
The Central government has given in-principle approval to the Thiruvananthapuram-Kasaragod semi-high speed rail (SHSR) corridor project.
Named Silver Line, SHSR once operational will cut travel time between Thiruvananthapuram and Kasaragod from 12 hours to 4 hours. The semi high-speed rail will run on a new alignment. Trains on the track, which passes through 11 of the 14 districts in the state will run at 200 km per hour. The trains will have 10 stops.
The Rs 66,000 crore project is a joint venture between the Kerala government and the Ministry of Railways. Kerala Rail Development Corporation (KRDCL), is the implementing agency for the 540-km double-line project which is expected to be completed by 2024.
World’s largest single-building airport terminal opens in China
Daxing, Beijing’s new International Airport, which houses a terminal spanning 7.5 million sq ft, was opened for traffic in September 2019. Built at a cost of $11 billion, the airport with its runways and annexes covers 18 square miles.
Designed by the late British architect Zaha Hadid, the airport resembles a giant starfish from above. Six curved spokes spread out from a central hub that spans four levels, with the domestic and international terminals being stacked on top of each other. The core is supported by eight giant C-shaped pillars, each with a 350-foot wide skylight at the top.
The innovative design – the maximum distance from the core to the furthest gate in each wing is just 1,970 feet – makes the terminal gates easily accessible. The airport also uses the latest technology such as self check-in kiosks, biometric scanners, and smart security checks to reduce congestion and enhance security.
The airport located 46km away from downtown Beijing, is slated to handle 300 takeoffs and landings an hour in its initial stages alone. 45 million passengers are expected to pass through it by 2021.
The existing airport in Beijing – Beijing Capital International Airport – is the world’s second busiest after Hartsfield–Jackson Atlanta International Airport. The new airport was built to ease the pressure on the existing airport.
ASK THE EXPERT
When we purchased TMT steel bars recently, we noticed a six-digit number code marked in the rebar. What does the number denote?
(Mrs. Anna Varghese Kurian, Thrissur)
With increasing emphasis on quality, traceability of TMT steel has become very important. Identifying the manufacturer of every bar of TMT steel is needed to address quality issues.
Tags are attached to the TMT steel bundle to aid this process. But tags are often lost during transportation and identifying the manufacturer becomes a problem. To overcome this issue and ensure better traceability of the product, it has been decided to stamp the following details on the TMT steel bars;
- a) brand name of manufacturer
- b) grade of TMT
- c) a six-digit identification number
The location of the manufacturer determines the first two digits of the identification number. The last four digits of the licence number allotted to the manufacturer, make up the remaining four digits.
For example, the six-digit identification number on a TMT steel rebar that Metrolla Steels manufactures would be “644256” – 64 being the code for the state of Kerala and 4256 the last four digits of the licence number allotted to Metrolla Steels. The ‘METCON TMT’ brand name, the ISI mark and the steel grade(Fe 415) will also be present on every metre of the Metcon TMT steel rebar. You could see these details stamped on the TMT steel rebar that you purchased.
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Conquering peaks with inner strength
Ms Arunima Sinha is an example of what people can achieve by overcoming challenges using their inner strength. Ms Arunima was a member of the national volleyball team when she was thrown off a moving train for resisting a burglary attempt in 2011. She lost one of her legs in the incident and was hospitalised for four months.
While on her hospital bed, she decided to take up mountaineering. Arunima contacted Bachendri Pal, the first Indian woman to climb Mount Everest and started training under her. She achieved her dream of climbing the Everest in two years in 2013. She also went on to scale Mount Kilimanjaro in Africa, Elbrus in Europe, Kosciusko in Australia, Aconcagua in Argentina and Carstensz Pyramid in Indonesia. Recently she became the first female amputee to climb Mount Vinson, the highest peak in Antarctica.
Ms Arunima was conferred the Padma Shri and the Tenzin Norgay National adventure award in 2015. She was also conferred with the honorary doctorate by the University of Strathclyde, UK.