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In a concerning development for Karnataka's real estate sector, over 2,600 projects have been officially marked as 'expired' due to developers failing to seek registration extensions. Additionally, more than 2,700 projects have lapsed, having their registrations invalidated because of non-completion. Out of 7,707 registered projects, 2,632 builders defaulted, primarily by not delivering homes on time. Builders are mandated to submit quarterly updates on project status, expenditures, and funds collected, with penalties for non-compliance reaching up to 10% of the project cost. However, enforcement has been weak, with the Karnataka Real Estate Regulatory Authority (K-RERA) recovering only INR 91 crore out of the INR 758 crore ordered refunds to homebuyers.
Karnataka's real estate sector is facing a significant crisis as the Karnataka Real Estate Regulatory Authority (K-RERA) reports over 2,600 projects have expired, and more than 2,700 have lapsed. An 'expired' status indicates that a project's registration period has ended without the builder applying for an extension, while a 'lapsed' status means the project remains incomplete without a granted renewal. Out of 7,707 registered projects, 2,632 builders have defaulted, primarily due to failing to deliver homes on time. Advertisement
Under RERA regulations, builders are required to declare the completion date at the agreement stage and provide quarterly updates on project status, expenditures, and funds collected. Non-compliance can lead to penalties up to 10% of the project cost, and authorities have the power to attach promoters' assets to recover penalties and compensate buyers.
Homebuyers are bearing the brunt of these delays, often juggling EMIs and rent payments. Critics like Dhananjaya Padmanabhachar, convener of the Karnataka Home Buyers' Forum, have highlighted K-RERA's inefficiency, lack of a project closure policy, and poor enforcement, resulting in minimal recovery from errant builders. Despite the RERA legislation's strong framework, poor execution has left consumers seeking justice through alternate legal avenues.
Further compounding the issue, K-RERA has managed to recover only INR 91 crore out of the INR 758 crore ordered refunds to homebuyers for delayed or incomplete projects. This slow recovery has left many homebuyers, who are still awaiting their rightful compensation, running between the offices of Deputy Commissioners and Tehsildars for relief.
The lack of a clear project closure policy, inadequate enforcement of penalties, and poor recovery of dues from defaulting builders have eroded trust in the system. For meaningful change, K-RERA must adopt stricter enforcement measures, establish clear guidelines for project closures, and ensure timely redressal of homebuyer grievances. Only then can confidence be restored in Karnataka's real estate sector.
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