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Bengaluru real estate: Can buyers claim compensation from developers for delayed handover of resale villas?
KRERA orders developer to execute sale deed, pay ₹70 lakh for delayed Bengaluru villa handover; says resale-related halt not valid grounds for delay
The Karnataka Real Estate Regulatory Authority (KRERA) directed a developer to execute the sale deed and pay nearly ₹70 lakh as compensation to homebuyers for a two-year delay in handing over a luxury villa in north Bengaluru. The authority held that the promoter bears sole responsibility for completing the project within the stipulated timeline, rejecting the developer’s argument that ownership transfers and non-payment of the final instalment caused the delay.
The promoter was expected to deliver the villa in 2023. The original buyer had purchased the property for ₹3.21 crore in July 2014 and later sold it to the present complainants for ₹4.77 crore eight years later. However, despite more than a decade since the initial purchase and multiple deadline extensions, the project remained incomplete, prompting the buyers to approach KRERA last year seeking relief.
KRERA has directed Total Environment to pay delayed compensation to homebuyers for its ‘After the Rain Phase 1’ project, for the delay in possession from May 2023 to July 2025.
“The developer is hereby directed to pay delay period interest on the consideration amount of ₹3.3 crore calculated at the rate of SBI MCLR+2% from May 2023 till July 2025 (offer of possession) of the Villa/Unit No.0114 (Villa No.84 as per BDA sanctioned Building plan) will be calculated likewise and paid to the Complainants,” the order said.
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The case
In this case, the complaint relates to a villa in the ‘After the Rain Phase 1’ project, with a saleable area of 3,090 sq ft and a carpet area of 2,475 sq ft. The original owners entered into a sale-and-construction agreement with the developer on July 2, 2014. They paid a substantial amount, over ₹3.21 crore, towards the property under the agreed terms and timelines, the documents showed.
Later, the villa was transferred to the current complainants through an assignment deed executed in October 2022 with the developer’s consent.
“The complainants contend that the developer repeatedly revised and postponed the possession timelines as September 2023-December 2023, March 2024, June 2024, and by November 2024, issued false assurances that are false, arbitrary, and indicative of deficiency in service and breach of contractual obligations regarding completion, represented that the unit/villa was nearing completion or ready for possession,” it said.
However, the construction remained incomplete as of January 2025, according to photographic evidence, the buyers told KRERA. As per the agreement and assignment terms, the developer was required to complete construction, obtain the Occupancy Certificate (OC), and hand over possession by May 31, 2023, they said.
In response, the developer told KRERA that the delay was due to the ownership transfer process and the homebuyers’ failure to pay the final instalment. It also said the completion timeline was extended due to customisation work requested by the buyers and maintained that the project was largely complete, with only ‘minor works’ pending.
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Halt in construction due to resale cannot be grounds for delay, KRERA said
In its order, KRERA noted that even eight years after the initial sale agreement, the project had still not been delivered to the new homebuyers following the villa's reassignment.
“The developer has sought to attribute the delay to the resale of the Unit/Villa by the original allottees, the assignment process and the alleged non-cooperation of the Complainants. The developer’s contention that construction was halted due to resale cannot be accepted as a valid ground for delay, as the promoter is required to ensure continuity of construction irrespective of a change in allottees,” the order said.
“It is a settled position that the obligation of the promoter is to complete the project within the agreed timeline and transfer or assignment of the Unit/Villa does not absolve the promoter of such obligation,” the order said.
The authority found that the delay was mainly the developer’s responsibility, though the complainants also contributed slightly by failing to pay the remaining balance on time.
KRERA ordered the developer to pay the buyers delayed compensation for two years and to hand over physical possession of the villa to the complainants upon receipt of the balance sale consideration.
A list of questions has been sent to the developer. The story will be updated once a response is received.
