Karnataka RERA Introduces Project Closure Policy to Enhance Transparency and Protect Homebuyers

Bengaluru: The Karnataka Real Estate Regulatory Authority (RERA) is preparing to introduce a project closure policy, becoming only the second state after Odisha to do so. The policy aims to bring transparency and accountability to builders' submissions and protect homebuyers by ensuring projects are closed only after verifying all statutory and service-related compliances.

So far, the authority has merely recorded promoters' self-declared completions without verification, even though it came into power back in 2016. K-RERA chairman Rakesh Singh told TOI that the idea behind the new policy is to ensure transparency in the builders' submissions and to protect homebuyers.

'It will create pressure on the builder to ensure accuracy and will also convey to the homebuyer that what was promised has been fulfilled. This kind of mechanism is done in Odisha, but nowhere else in the country. We have done a small exercise on this and thought we should be through in the next week or 10 days,' he said. Singh said the system will benefit both the builder and the buyer.

As per Karnataka RERA data as of October, there were 1,080 applications for project completion certificates or extension, out of which 886 were approved, 69 rejected, and 125 were under process, while 2,746 projects had their completion dates expired.

Homebuyers say the new policy will ensure that promoters cannot declare projects as completed without verification and that only those who have cleared all dues and complied with orders from courts or authorities can launch new projects. By tightening compliance checks and linking payments to full project completion, the policy aims to protect homebuyers from fraud and delays while compelling builders to fulfill their commitments.

Karnataka Home Buyers Forum had written to RERA on August 30 last year, requesting it to implement the project closure policy for better transparency. Forum convenor Dhananjaya Padmanabhachar said: 'This is a big dereliction of duty of authority in the state. And we suspect huge corruption and the big lobby of promoters. In my apartment project, the promoter declared completion, but the project remains unfinished.'

RERA later ordered the promoter in September to obtain land and flat khatas, hand over title deeds, and transfer the corpus fund to the association. The new policy will help in skipping all these processes.

MS Shankar, general secretary of the Forum for People's Collective Efforts, said: 'Such a measure will ensure automatic compliance with orders, make recovery for homebuyers easier, and stop repeat violations. Likewise, builders should not be allowed to collect 100% payment without completing projects — they should receive only 75% upon obtaining an occupancy certificate, with the remaining 25% payable only after securing a completion certificate. This will create a strong financial incentive to complete projects, ensure official verification before final approvals, and protect buyers from living in unfinished developments.'

Srinivasa Rao Talla, secretary, Bengaluru City Flat Owners Welfare Association (BCFOWA) said: 'The project closure policy rightly insists that builders secure all statutory clearances — OC, PCB, BESCOM, BWSSB — before claiming completion.'

Following a request from RERA to enforce its notices, the director general and inspector general of police (DG&IGP) directed all police stations to act on notices issued by the real estate regulator. The measure followed discussions between the chief secretary and RERA officials.