In a significant ruling, the Karnataka Real Estate Regulatory Authority (KRERA) has ordered a Bengaluru-based developer to refund the entire amount of Rs 34.7 lakh to a homebuyer due to the developer’s failure to deliver possession within 12 months. This decision comes amidst a backdrop of widespread project delays in Bengaluru, highlighting the regulatory body’s commitment to protecting homebuyers’ interests.
The homebuyers, Dhimosh Mangadan and Jipsy Simon, entered into a sale agreement with GVG Infrastructure Pvt Ltd in August 2018 for a project named Mulberry Mist in Bengaluru’s Varthur area. The developer promised to hand over the project by August 2019 but failed to meet the deadline. Frustrated by the delay, the homebuyers approached KRERA for relief.
According to the KRERA order dated July 10, the developer had received a substantial advance of Rs 23.2 lakh but failed to comply with the terms of the agreement. The project remained far from completion, prompting the authority to rule in favor of the homebuyers.
KRERA’s Decision
KRERA ordered GVG Infrastructure Pvt Ltd to refund the entire amount of Rs 34.7 lakh to the homebuyers, along with a delayed interest of Rs 11.5 lakh. The developer was given two months to initiate the refund and cancel the agreement signed with the homebuyers.
Widespread Delays in Bengaluru
Bengaluru is grappling with a significant number of delayed projects. According to an analysis by real estate consultancy Anarock, over 26,030 units valued at more than Rs 28,072 crore are running behind schedule in the city. Some projects are delayed by over 4-5 years, highlighting the severity of the issue.
National Scenario
The problem of delayed projects is not limited to Bengaluru. Across seven major micro markets in the country, approximately 5 lakh homes worth Rs 4.48 lakh crore are stuck. The National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) together account for 77 percent of such projects. Pune has a 9 percent share, while Kolkata accounts for 5 percent. The southern metros of Bengaluru, Chennai, and Hyderabad together account for the remaining 9 percent.
Empowering Homebuyers
Previously, former KRERA Chairman Kishore Chandra had suggested that homebuyers could approach the authority to take over and complete delayed projects themselves. This approach empowers homebuyers and ensures that their investments are protected despite developer delays.
Conclusion
The KRERA ruling sets a strong precedent for protecting homebuyers’ rights and ensuring that developers adhere to their commitments. As Bengaluru and other cities grapple with widespread project delays, such regulatory interventions are crucial for maintaining trust and transparency in the real estate sector.