Karnataka real estate developers owe homebuyers approximately ₹667 crore in refunds due to delayed apartment deliveries, according to data from the Karnataka Real Estate Regulatory Authority (KRERA). As of December 31, 2024, the authority has been able to recover only about ₹92 crore out of the total ₹667 crore owed across 1,400 cases, highlighting the challenges in addressing these delays.
KRERA's report reveals that out of the 1,660 cases filed for recovery, amounting to ₹758.8 crore, only 233 cases have resulted in successful recoveries, totaling ₹91.8 crore, approximately 14% of the total amount. The Real Estate (Regulation and Development) Act, 2016 allows KRERA to issue a revenue recovery certificate (RRC) to the state revenue department, directing it to recover the funds from builders. However, despite this authority, it is the district administration that handles the actual recovery process.
Challenges in Recovery Process
As of January 31, 2024, Karnataka had ₹486 crore pending recovery from delayed projects. However, by the end of December, this amount had increased by 37%, reaching ₹667 crore. Former KRERA Chairman Rakesh Singh had earlier indicated efforts to expedite the recovery process, consulting with stakeholders to develop an efficient strategy.
Legal experts attribute the delays to the categorization of the funds as land arrears revenue, which often complicates the collection process. "There is no set time limit for recovery in these cases. Most projects are either mortgaged or undergoing auction, which makes it difficult to recover the funds," said Advocate Vittal BR, practicing at the Karnataka High Court.
Impact on Homebuyers
Homebuyers in Bengaluru are feeling the strain, with many expressing frustration over the sluggish recovery process. Dhananjaya Padmanabhachar, director of the Karnataka Homebuyers' Forum, criticized the developers for not adhering to KRERA’s orders, which is causing further financial strain for homebuyers. "It raises questions about KRERA's authority," he remarked.
Sudhakar Lakshmanaraja, another homebuyer awaiting recovery of ₹40 lakh from a delayed project, stated that despite pending refunds, builders continue executing other projects. "It's time for RERA to blacklist such defaulters, and for the government to take decisive action to protect homebuyers' rights," he urged.
The ongoing delays and challenges in recovering refunds continue to pose significant issues for homebuyers, underscoring the need for stronger enforcement and timely actions from regulatory bodies.
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