Karnataka’s real estate sector is facing a significant crisis, with over 2,600 projects marked as ‘expired’ and more than 2,700 classified as ‘lapsed’ due to regulatory lapses and non-compliance by developers.
Understanding the Crisis
Out of 7,707 registered projects, 2,632 builders have defaulted, primarily by failing to deliver homes on time. Under the Real Estate (Regulation and Development) Act (RERA), a project is considered ‘expired’ when its registration period ends without an extension application, and ‘lapsed’ if it remains incomplete without renewal. In both scenarios, the registration becomes invalid, exposing builders to potential penalties and regulatory actions.
Impact on Homebuyers
The situation has left many homebuyers in distress, juggling between paying EMIs and rent. Despite RERA’s provisions, enforcement has been weak. Critics highlight K-RERA’s inefficiency, lack of a project closure policy, and poor enforcement, resulting in minimal recovery from errant builders.
Financial Implications
K-RERA has issued recovery orders totaling over ₹707 crore in 1,539 cases. However, only ₹79 crore—just 12%—has been recovered, leaving ₹627 crore outstanding. This slow recovery has left numerous homebuyers awaiting their rightful compensation.
Calls for Reform
Homebuyer advocacy groups are urging for stricter enforcement measures, including appointing dedicated revenue officers within K-RERA to expedite recoveries. There’s also a push for a clear project closure policy to ensure builders meet their commitments and complete registered projects.
Conclusion
The current crisis underscores the urgent need for robust enforcement of RERA provisions in Karnataka. Without decisive action, homebuyers will continue to bear the brunt of regulatory lapses and developer non-compliance.
Mr. Sunil
Phone/WhatsApp: +91 96322 13131
Email: info@starrbites.com
📰 Article Reference: Economics Time Realty