Karnataka RERA Issues Rs 707 Crore Recovery Orders Amid Project Delays
In a setback for homebuyers in Karnataka, the state’s Real Estate Regulatory Authority (RERA) has issued recovery orders worth more than Rs 707 crore ($97 million) for delayed projects. The orders involve 257 projects and have been issued against builders or promoters who have failed to pay compensation or make refunds to affected homebuyers within the stipulated time.
Homebuyers left in limbo
One such buyer, Sudhakar Lakshmanaraja, 37, has been paying both rent and interest on loans for the past six years while waiting for possession of his flat in a project in Thanisandra. The project, which was promised for completion in 2019, is still incomplete. Lakshmanaraja, like many other affected homebuyers, has yet to receive any compensation or refund from the builder/promoter.
According to available data, as of August 31, 2024, only Rs 79 crore (11% of the total) has been recovered in 185 cases, leaving builders owing homebuyers more than Rs 627 crore in 1,354 cases. This raises concerns about the effectiveness of the recovery process and the lack of accountability on the part of builders.
Ineffectiveness of RERA’s recovery process
Homebuyers have raised concerns about the ineffectiveness of RERA’s recovery process. With the power to issue recovery orders, RERA places the responsibility of recovery on the district administration. However, there is no time limit for the district administration to recover the money owed by the builders. Moreover, many of these cases involve incomplete or undeveloped projects, making it even harder for the district administration to recover the funds.
To address these concerns, there have been suggestions for the appointment of a special revenue recovery officer within RERA who would be empowered to recover the money owed by builders. Several other state RERAs have already appointed such recovery officers, and homebuyers in Karnataka believe that this too would expedite the execution of RERA orders and ensure justice for homebuyers.
Stricter implementation of RERA necessary
Dhananjaya Padmanabhachar, sanchalak of the Karnataka Home Buyers’ Forum, emphasized the need for stricter implementation of RERA. He stated that RERA should guarantee that builders fulfill their obligations and deliver homes to buyers on time and with the expected quality and features. However, the varied implementation of RERA across different states, including Karnataka, has undermined the effectiveness of the law in protecting homebuyers.
Vikram Rai, president of the Bangalore Apartments Federation, echoed this sentiment and called for equal and strict implementation of RERA across all states. He asserted that RERA must ensure that compliance issues are rectified and builders are held accountable for their actions.
Hope for improvement
K-Rera chairperson Rakesh Singh assured that there would be perceptible improvements in the recovery process in the coming days. However, it remains to be seen how effective these improvements will be in delivering justice to the affected homebuyers.
The delays in project completion and the subsequent failure of builders to compensate homebuyers have highlighted the urgent need for stricter implementation of RERA. The appointment of a special revenue recovery officer within Karnataka RERA could be a step in the right direction, ensuring that homebuyers are not left in the lurch due to project delays and builder negligence.
