Karnataka Real Estate Developers Owe Homebuyers Nearly ₹667 Crore in Refunds
The Karnataka Real Estate Regulatory Authority (KRERA) has managed to recover only ₹92 crore out of the total ₹667 crore owed by real estate developers to homebuyers in the state. Homebuyers are increasingly frustrated by the delays and financial struggle
Karnataka Real EstateKreraHomebuyersRefundsReal Estate Act 2016Real EstateJan 20, 2025
Despite the regulatory body's efforts, it has only managed to recover ₹92 crore, a mere 14% of the total amount due.
KRERA's document, accessed by HT.com, highlights that the total amount includes 1660 cases approved for recovery, amounting to ₹758.8 crore.
Out of these, only 233 cases, totaling ₹91.8 crore, have been successfully resolved.
According to the Real Estate (Regulation and Development) Act, 2016, if a builder fails to pay compensation or refund money to homebuyers, KRERA can issue a revenue recovery certificate (RRC) directing the state revenue department to recover the funds.
However, the actual recovery is the responsibility of the district administration.
The situation has worsened over the past year.
As of January 31, 2024, the state needed to recover over ₹486 crore from stuck projects.
By the end of December, this amount had surged by 37%, reaching nearly ₹667 crore.
Former KRERA Chairman Rakesh Singh has been consulting with stakeholders to expedite the recovery process, but significant challenges remain.
Legal experts attribute the slow recovery to the categorization of the money owed as revenue from land arrears.
'There is no time limit for the recovery of such money, and most projects are either mortgaged or difficult to auction,' explained Advocate Vittal BR, who practices at the Karnataka High Court.
This lack of a time limit and the complexity of the projects make it difficult to recover funds efficiently.
The delay has left homebuyers in a difficult position.
Dhananjaya Padmanabhachar, director at the Karnataka Homebuyers' Forum, expressed frustration, stating, 'It's unfortunate that developers do not adhere to KRERA orders.
This is causing financial struggles and raising questions about KRERA's authority.' Another homebuyer, Sudhakar Lakshmanaraja, awaiting recovery of ₹40 lakh, added, 'It is time for RERA to blacklist such defaulters and for the government to take decisive action to protect homebuyers' rights.'
The Karnataka Real Estate Regulatory Authority (KRERA) is a regulatory body established under the Real Estate (Regulation and Development) Act, 2016, to promote transparency, fairness, and accountability in the real estate sector.
KRERA aims to protect homebuyers' interests and ensure that developers adhere to the regulatory framework.
In response to the ongoing issues, homebuyers are exploring additional legal avenues.
Bengaluru homebuyers, in particular, are considering approaches to the Human Rights Commission to address delays in handing over flats.
The situation remains challenging, with the need for more stringent measures and efficient recovery processes to ensure that homebuyers receive their rightful refunds.
Frequently Asked Questions
What is the total amount real estate developers owe homebuyers in Karnataka?
Real estate developers in Karnataka owe homebuyers around ₹667 crore as refunds for delays in the delivery of apartments as of December 31, 2024.
How much has KRERA managed to recover so far?
KRERA has managed to recover only ₹92 crore out of the total ₹667 crore owed by real estate developers to homebuyers.
What is the role of KRERA in the recovery process?
KRERA can issue a revenue recovery certificate (RRC) directing the state revenue department to recover the funds from developers. However, the actual recovery is the responsibility of the district administration.
Why is the recovery process slow?
The recovery process is slow due to the categorization of the money owed as revenue from land arrears, the lack of a time limit for recovery, and the complexity of mortgaged or difficult-to-auction projects.
What actions are homebuyers taking to address the delays in refunds?
Homebuyers are exploring additional legal avenues, including approaches to the Human Rights Commission, to address delays in receiving their refunds.
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