Karnataka real estate developers owe homebuyers around ₹667 crore in refunds for delayed projects
KRERA has said that it could only recover around ₹92 crore out of the total of ₹667 crore that real estate developers owe buyers across almost 1400 cases
Karnataka real estate developers owe homebuyers around ₹667 crore as refund for delays in delivery of apartments as of December 31, 2024, a Karnataka Real Estate Regulatory Authority (KRERA) document accessed by HT.com shows.
The document mentioned that out of a total of 1660 cases filed for recovery and approved by KRERA (totalling ₹758.8 crore), the regulatory body could recover the homebuyers' money in 233 cases. This totals to about ₹91.8 crore, about 14% of the total number of recovery orders passed by KRERA.
According to the Real Estate (Regulation and Development) Act, 2016, if a builder fails to pay compensation or refund money to homebuyers, the regulatory body can issue a revenue recovery certificate (RRC) directing the state revenue department (revenue) to recover the money from the builders.
It should be noted that while the real estate regulatory authority is empowered to issue a revenue recovery order, it is the district administration that can retrieve the money.
Also Read: Karnataka RERA issues recovery orders of more than ₹707 crore; 88% amount still pending
No time limit for recovery of homebuyers' money
As of January 31, 2024, Karnataka had to recover over ₹486 crore from the state's stuck projects. However, the amount to be recovered increased by 37% to almost ₹667 crore at the end of December.
In October, former KRERA Chairman Rakesh Singh had told HT.com that he is consulting with relevant stakeholders to devise an effective strategy within the regulatory authority to expedite the recovery process.
Legal experts say the delay in recoveries is due to the money to be collected from builders being categorised as revenue from land arrears.
"There is no time limit for recovery of money in such cases. Most of the projects are either mortgaged or auctioning a delayed project to recover the money, which is often not feasible," Advocate Vittal BR, who practices at Karnataka High Court, said.
Homebuyers left in a lurch
Bengaluru homebuyers said the sluggish recovery from KRERA has left them in a lurch.
"It's unfortunate that the promoters do not adhere to the KRERA orders. It's impacting home buyers' financial struggles and raising questions on KRERA's authority," Dhananjaya Padmanabhachar, director at Karnataka Homebuyers' Forum, said.
Another homebuyer who is also awaiting recovery of his money invested in a delayed project said that despite a pending ₹40 lakh in his case, builders in the state are still allowed to execute other projects.
"It is time for RERA to blacklist such defaulters and for the government to take decisive action to protect homebuyers' rights," Sudhakar Lakshmanaraja added.
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