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KRERA Upholds Homebuyers’ Right to Compensation for Construction Delays

KRERA

In a significant ruling, the Karnataka Real Estate Regulatory Authority (KRERA) has reinforced the rights of homebuyers, asserting that they are entitled to seek compensation for construction delays, regardless of the underlying causes. This decision came to light during a recent case involving a Bengaluru-based project, shedding light on the importance of protecting the interests of homebuyers.

The matter at hand pertained to the Alexandria project, located in Uttarahalli, Bengaluru, which faced construction interruptions due to a wall collapse in an adjacent building in 2017. Consequently, this unfortunate incident led to delays in the project’s completion.

KRERA’s ruling, dated September 11, favored the homebuyer, Supriya Shetty, who had invested Rs 1.35 crore for a flat with a promised handover date of June 2016. The authority ordered the developer, Menorah Realities, to pay Rs 83.04 lakh in interest for the delay period, calculated at a rate of 9 percent per annum. Furthermore, the developer was instructed to execute the sale deed and hand over possession within 60 days.

Menorah Realities contended that the project was never halted but experienced setbacks due to the collapse of an adjacent building’s wall, resulting from heavy rain. Despite sending multiple appeals to the local municipal corporation to lift the construction suspension, work could not proceed as planned.

Supriya Shetty, on the other hand, cited pending minor modifications she had requested in 2015, which were never addressed, and expressed dissatisfaction with the developer’s communication.

KRERA’s findings concurred with the homebuyer’s plight, noting that the project was not delivered within the agreed timeline. The MOU between the parties stipulated a revised handover date of December 2019, but the project still awaited an occupancy certificate in 2021.

Citing a Supreme Court judgment, KRERA emphasized that if developers fail to deliver possession within the stipulated timeframe, homebuyers have an unqualified right to seek refunds with interest under Sections 18 and 19 of the RERA Act.

In light of this, the developer was directed to compensate for the delay and interest, reaffirming KRERA’s commitment to safeguarding the rights of homebuyers and ensuring transparency and accountability in the real estate sector.

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