In a groundbreaking decision, the Karnataka Real Estate Regulatory Authority (KRERA) has taken a rare stand by holding both a real estate developer and an agent responsible for refund delays in refunding the booking amount to a customer in a Bengaluru-based project.
The Case: The homebuyer, Ranjeeva Ranjan, had booked an apartment in Damden Vivo, a project developed by Damden Properties and brokered by Square Yards Pvt Ltd. The booking amount of Rs 98,256 was to be refunded in case of a rejection of the housing loan application, as per the agreement clauses.
Ranjan, facing delays in the refund despite a canceled booking in January 2019, sought relief from KRERA.
KRERA’s Order: KRERA, in its order dated January 17, stated that both the developer and the real estate agent are liable to return the booking amount within 60 days of the order. The decision emphasizes the joint responsibility of the developer and agent in ensuring the refund.
Developer’s Defense: The developer argued that, as per the agreement between the company and Square Yards, the booking amount is debited into an Escrow Account. The developer clarified that the amount cannot be solely operated by him, as the agent also has a share in the Escrow Account.
KRERA’s Verdict: Contrary to the developer’s stance, KRERA analyzed the documents and concluded that the issue was not due to delay but rather the homebuyer’s request for a withdrawal of the invested money. The joint holding of the Escrow Account by the developer and agent led KRERA to hold both parties responsible for the refund.
Implications and Expert Opinions: Legal experts see this KRERA decision as a precedent, underscoring the accountability of real estate agents in homebuying transactions. Bengaluru’s booming real estate market and the increasing role of real estate agencies necessitate shared responsibility and accountability.
Advocate Amit Anand emphasized, “This order certainly lays a precedent as KRERA clearly wants to put the responsibility of home selling not just on developers but also on agents. It makes sure that the homebuyers are not misled in terms of their investments in real estate.”
Conclusion: KRERA’s decisive stance in holding both the developer and the real estate agent accountable emphasizes the importance of transparency, accountability, and ethical practices in real estate transactions.
