Karnataka High Court Sets Deadline for RERA Order Compliance
Under the guidelines of the Karnataka Real Estate Regulatory Authority (RERA), homebuyers involved in Bengaluru projects experiencing delays of up to four years are awaiting reimbursement. Experts suggest the government should expedite the recovery process, pinpointing this as a critical issue.
The Karnataka High Court has mandated that the Karnataka government must recover funds paid by buyers of the Ozone Urbana project in Bengaluru within four months. This directive addresses the state government’s failure to comply with a Karnataka RERA order from 2022, which required them to recover these funds.
Homebuyers' Grievances
The high court order highlights that the delayed execution of the Karnataka RERA order is causing grievances for homebuyers. The order, which was uploaded last week, explicitly states, "The order shall be complied with within four months."
The Real Estate (Regulation and Development) Act of 2016 specifies that if a builder fails to deliver apartments to buyers, the regulatory body can instruct the revenue department to initiate recovery proceedings against the builder. Should the builder fail to reimburse or compensate homebuyers, the recovery department may commence action.
Legal experts indicate that once a Recovery Request (RR) order takes effect, the Deputy Commissioner’s (DC) office will collect funds from the developer as land revenue arrears.
Homebuyers, some of whom have invested crores of rupees, are facing difficulties due to what they perceive as sluggish recovery efforts by the state government.
Slow Recovery Progress
Based on available information, the revenue department has only managed to collect approximately ₹26 crore from builders across the state as refunds or compensation for overdue apartment deliveries. An outstanding amount of over ₹245 crore remains to be recovered.
According to Moneycontrol, the state government still needs to retrieve 114 orders issued by KRERA for the Ozone Urbana projects, which amount to over ₹50 crore.
"This project alone still has over ₹50 crore that needs to be recovered. Homebuyers who have been waiting since 2020 have approached the high court in the hope of receiving relief due to the delayed recovery process," stated Akash Banita, an advocate representing the homebuyers.
The Necessity for Alternative Solutions
Ani Kalagi, founder of the Bangalore City Flat Owners’ Association, who collaborates with the DC office, notes that a core issue is that the RRC orders are attaching projects that have already experienced delays and are being put up for auction. He states that because the majority of these projects are still in progress or involve title issues that are unresolved, the state government is experiencing difficulty in auctioning the properties in an effort to get the funds back.
Experts suggest that RERA has frequently acted suo moto in recovery cases in states like Maharashtra and Uttar Pradesh. In contrast, Karnataka has never enacted legislation of this nature since 2016.
Kalagi proposes that one viable solution involves identifying auctionable assets owned by builders and providing a list to the DC office and tahsildars for attachment. This method would enable the state government to auction these assets and recover the money more efficiently.
Dhananjaya Padmanabhachar, the president of the Karnataka Home Buyers Forum, asserts that the absence of a recovery timeline indicates a lack of adequate support for buyers from the state department. Specifically, he insists that the state government establish a deadline for the procedures of the revenue department and RERA.