In a significant step to protect homebuyers and ensure accountability in the real estate sector, the Karnataka Real Estate Regulatory Authority (K-RERA) has proposed the formation of a dedicated Recovery Cell within the Revenue Department to expedite the recovery of over ₹650 crore in pending dues from builders who have violated RERA norms.
Rising Concerns Over Enforcement
The proposal follows widespread criticism that K-RERA has struggled to enforce its own orders against errant builders who have delayed possession, defaulted on obligations, or flouted other regulatory requirements. Although K-RERA has issued hundreds of Revenue Recovery Certificates (RRCs) against such developers, many builders have evaded compliance, leaving thousands of homebuyers in financial and emotional distress.
Abysmal Recovery Rates So Far
Currently, responsibility for enforcing RRCs lies with district collectors and tahsildars. However, these officials are burdened with a variety of other government duties, including:
-
Conducting elections
-
Managing census activities
-
Organizing national events
This overloaded administrative machinery has resulted in minimal action on RERA recoveries. According to official data:
-
Only 62 out of 565 RRC cases have led to successful recoveries
-
These have fetched a mere ₹18.7 crore so far
-
A staggering ₹347.44 crore remains pending in 594 unresolved cases
Builders Leading in Dues
Among defaulters, 10 major builders account for nearly ₹347 crore in unpaid penalties. Topping the list is Ozone Urbana Infra Developers Pvt. Ltd., with:
-
₹201 crore pending across 229 RRCs
-
Only ₹7.53 crore recovered to date
Such significant pending amounts underline the systemic challenge of holding large developers accountable under current enforcement mechanisms.
A Dedicated Recovery Cell: The Way Forward
To tackle this backlog, K-RERA has proposed a dedicated Recovery Cell:
-
To function within the Revenue Department
-
Focus exclusively on executing RERA orders and recovering dues from non-compliant builders
-
Expedite compensation payouts to affected homebuyers
The idea received strong backing from the Forum for People’s Collective Efforts (FPCE), a leading citizen rights group advocating for rigorous RERA implementation. Welcoming the proposal, M.S. Shankar, National General Secretary of FPCE, stated:
“We commend the decision to consider setting up a dedicated Recovery Cell to handle builder defaults under RERA. If implemented, Karnataka will become the second state in the country to have such a system.”
Expected Impact
Officials believe the dedicated cell will:
-
Ensure quicker enforcement of K-RERA’s compensation and penalty orders
-
Reduce fraudulent practices by errant builders
-
Offer long-overdue relief to homebuyers, many of whom have been waiting years for justice
The formal proposal has now been submitted to the state government, and discussions are underway to operationalize the cell in the coming months. If approved, Karnataka’s initiative could serve as a model for other states grappling with similar enforcement challenges under the Real Estate (Regulation and Development) Act, 2016.
This proactive step underscores Karnataka’s commitment to restoring faith in the real estate sector and ensuring that developers are held accountable for their obligations to homebuyers.
