The Karnataka Real Estate Regulatory Authority (K-RERA) has issued orders to recover over ₹707 crore for homebuyers affected by delayed real estate projects. These recovery orders span 1,539 cases and involve 257 delayed projects across the state. However, 88% of the total amount remains unpaid, highlighting challenges in enforcing compensation for affected allottees. As of August 31, 2024, only ₹79.94 crore has been recovered in 185 cases, leaving more than ₹627.32 crore still outstanding.
Efforts to Expedite Recovery Process
K-RERA Chairman Rakesh Singh is actively working to expedite the recovery process. Recognizing the obstacles in collaborating with the state’s revenue department, Singh is engaging with stakeholders to create a strategy for faster enforcement of recovery orders.
“While revenue officials are making reasonable efforts, the process needs to be expedited and completed in a timely manner,” Singh stated. He suggested two possible approaches to improve the recovery rate: enhancing the current collaboration between K-RERA and the revenue department or creating a new structure within K-RERA for handling revenue recovery.
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One option is to streamline the current system, which relies on revenue officials to implement recovery orders. This approach might yield better results if effectively coordinated. The second option proposes establishing a dedicated recovery division within K-RERA, giving it the power to enforce orders directly, without relying on the revenue department.
Legal Framework for Recovery Orders
Under the Real Estate (Regulation and Development) Act, 2016 (RERA), authorities can issue Revenue Recovery Certificates (RRC) to compel developers to pay compensation or refunds to homebuyers. However, while K-RERA can issue these certificates, the responsibility for executing them rests with the district administration.
Dhananjaya Padmanabhachar, Sanchalak of the Karnataka Home Buyers Forum, expressed frustration with this two-department model. He emphasized the inefficiencies of the current setup, suggesting that the ideal solution would be to empower RERA with its own revenue recovery official who possesses the authority to enforce these orders directly, much like a District Commissioner.
“The current system requires coordination with both RERA and the revenue department, which can be cumbersome. A dedicated recovery officer within RERA would streamline the process and make enforcement more efficient,” Padmanabhachar said.
Challenges and the Path Forward
The significant amount still pending highlights the systemic issues in recovery enforcement. Many affected allottees have been waiting for years, often dealing with financial and emotional stress due to delayed or incomplete real estate projects. The establishment of an independent recovery wing within RERA could accelerate the recovery process, enhancing accountability and transparency for homebuyers.
As Rakesh Singh seeks a solution that ensures both efficient and swift grievance redressal, the future structure of K-RERA may evolve to meet these needs. While collaboration with the revenue department remains essential, a reformed approach could better serve Karnataka’s real estate market, providing homebuyers the confidence and protection they need.
