Karnataka Realtors to refund Buyers across Rs. 667 crore for Project Delays

As of December 31, 2024, real estate developers in Karnataka owe approximately Rs. 667 crore in refunds to home buyers due to delays in apartment delivery.

According to data from the Karnataka Real Estate Regulatory Authority (KRERA), 1,660 recovery cases amounting to Rs. 758.8 crore were approved, but only Rs. 91.8 crore (about 14%) was successfully recovered from 233 cases.

Under the Real Estate (Regulation and Development) Act, 2016, if a developer fails to compensate or refund homebuyers, KRERA can issue a Revenue Recovery Certificate (RRC) to the state revenue department to facilitate the recovery process.

However, enforcement falls under the jurisdiction of district administrations, which has slowed progress.

By January 31, 2024, Rs. 486 crore remained unrecovered from stalled real estate projects in Karnataka. This figure rose by 37% to Rs. 667 crore by December. The increase highlights the growing financial burden on homebuyers and the challenges of recovering funds from delayed projects.

Former KRERA Chairman Rakesh Singh, in an October statement, noted ongoing consultations with key stakeholders to formulate strategies that would accelerate recovery efforts. Legal experts point to systemic hurdles, including the classification of builder dues as land revenue arrears, which lack a specific time frame for collection.

According to Advocate Vittal BR of the Karnataka High Court, many delayed projects are either mortgaged or difficult to auction, making recovery through liquidation impractical. He emphasized that the lack of timely recovery mechanisms continues to hinder the process, leaving affected homebuyers waiting for justice. Efforts to streamline enforcement and improve financial accountability remain crucial for protecting consumer interests in the real estate sector.