KRERA Issues Strict Warning to Mysuru Developer for Non-Compliance

The Karnataka Real Estate Regulatory Authority (KRERA) has reprimanded a Mysuru-based developer for significant statutory lapses in the Astrum Grandview Phase I project. The developer, Astrum Value Home, has been criticized for failing to obtain the mandatory Completion Certificate (CC), leading to severe consequences for homebuyers.

The project, which began in 2014, has been plagued by numerous issues. Despite issuing possession letters between 2020 and 2022, the developer has not secured the essential CC. This oversight has resulted in several flat owners being subjected to a 100% penalty in property tax assessments by local authorities.

KRERA has highlighted that the developer has only partially complied with previous instructions related to the project. The authority has now ordered the developer to immediately obtain the completion certificate and submit a detailed compliance report. This report should clearly specify the list of amenities and infrastructure works that have been completed and those that remain pending.

The regulator has also instructed the developer to provide a clear and time-bound action plan detailing when each pending amenity, shared facility, and statutory compliance will be completed. KRERA emphasized that the plea of phased development cannot be used as a tool to postpone compliance or deny the legitimate rights of the allottees.

Buyers have alleged prolonged delays despite making full payments. They have informed KRERA that they have paid the entire sale consideration, including advance maintenance charges, club membership fees, and a corpus deposit of ₹1 lakh per allottee. Despite receiving possession letters and registering the properties, buyers claim that the developer has not completed the project in its entirety, failed to obtain the Completion Certificate, execute the Deed of Declaration, form or hand over the Association of Allottees, and complete the promised common amenities.

One of the most serious consequences of the missing completion certificate has been financial. KRERA recorded that the absence of the CC has resulted in local authorities imposing a 100% penalty in property tax assessments for several flat owners.

Homebuyers further alleged that the developer deviated from the sanctioned plan, carried out unauthorized alterations, carved out and sold additional plots without consent, and reduced the undivided share of land belonging to existing apartment owners. KRERA found that the developer had failed to complete the project and promised amenities within the stipulated timeline.

The developer argued that Phase I and Phase II were independent and that amenities were being developed in stages. However, KRERA rejected this argument, noting that phased development cannot override statutory obligations under the Real Estate (Regulation and Development) Act, 2016. The authority cited specific sections of the Act that mandate the promoter to be responsible for all obligations until the conveyance of common areas to the association and to execute the registered conveyance deed in favor of the association of allottees.

KRERA has issued a warning that if the present directions are not complied with, further regulatory actions will be taken. If the directions issued in this order are not followed or the compliance report is not submitted, the authority will initiate action under Section 63 of the Real Estate (Regulation and Development) Act, 2016.

The matter highlights the ongoing concerns regarding delayed statutory compliance, lack of complete amenities, and the financial burden that homebuyers bear even after taking possession. It also sends a strong message from KRERA that developers cannot use phased development as an excuse to avoid fulfilling their legal obligations to beneficiaries and allottees.