Homebuyers are owed around ₹667 crore in refunds by Karnataka real estate developers for projects that were delayed

By Bricksnwall | 2025-01-20

According to KRERA, it could only recoup only 92 crore of the 667 crore that real estate developers owe purchasers in nearly 1400 cases.

As of December 31, 2024, Karnataka real estate developers owe homebuyers around ₹667 crore in refunds for apartment delivery delays, according to a document obtained by HT.com from the Karnataka Real Estate Regulatory Authority (KRERA).

According to the paper, KRERA was able to recover the homebuyers' money in 233 of the 1660 instances that were filed for recovery and authorized, totaling ₹758.8 crore. This amounts to roughly ₹91.8 crore, or 14% of all recovery orders issued by KRERA.

The Real Estate (Regulation and Development) Act of 2016 states that a regulatory authority may issue a revenue recovery certificate (RRC) instructing the state revenue department (revenue) to collect money from builders who fail to compensate or reimburse homebuyers.

It should be mentioned that although the district administration has the jurisdiction to collect the money, the real estate regulating body has the ability to issue a revenue recovery order.

There is no deadline for recovering homebuyers' funds.

Karnataka needed to collect more than ₹486 crore from its stalled projects as of January 31, 2024. By the end of December, however, the sum to be recovered had risen by 37% to about ₹667 crore.

Rakesh Singh, the former chairman of KRERA, told HT.com in October that he is working with pertinent parties to develop a workable plan inside the regulatory body to speed up the recovery process.

According to legal experts, the reason for the delay in recovery is that the money owed to builders is classified as revenue from land arrears.

"In certain situations, there is no time limit on money recovery. Advocate Vittal BR, who works at the Karnataka High Court, stated that the majority of projects are either mortgaged or auctioned off a delayed project to recoup the funds, which is frequently impractical.

Homebuyers were caught off guard.

Homebuyers in Bengaluru claimed they were left in a lurch by the slow recovery from KRERA.

"The promoters' disregard for the KRERA orders is regrettable. It's affecting the financial difficulties of homebuyers and casting doubt on KRERA's jurisdiction," stated Dhananjaya Padmanabhachar, director of the Karnataka Homebuyers' Forum.

According to another consumer who is also waiting to get his money back from a project that was delayed, builders in the state are still permitted to work on other projects even though he still owes ₹40 lakh.

The government must move swiftly to safeguard the rights of homebuyers and put such defaulters on RERA's blacklist," Sudhakar Lakshmanaraja continued.

Source: Hindustan Times