Karnataka RERA Affirms Homebuyers’ Right to Compensation for Construction Delays

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    Bengaluru, Karnataka – In a recent ruling, the Karnataka Real Estate Regulatory Authority (KRERA) has underscored that homebuyers have the right to claim compensation for construction delays, irrespective of the reasons for the interruption. The decision came in the context of a Bengaluru-based project, where the developer asserted that construction was never stalled but merely halted under municipal orders due to a wall collapse in an adjacent building.

    The construction halt pertained to the Alexandria project, located in Uttarahalli, southwest Bengaluru, after a wall collapse incident in the neighboring building in 2017, causing further delays in the project timeline.

    In a significant win for the homebuyer, Supriya Shetty, KRERA’s September 11th order decreed, “The developer, Menorah Realities, is directed to pay Rs 83.04 lakh towards interest for the delay period at a rate of 9 percent per annum. Additionally, the developer is to execute the sale deed and hand over possession within 60 days.”

    Shetty had initially paid Rs 1.35 crore to secure a flat in the Alexandria project, which had a promised handover date of June 2016. The ongoing delay prompted her to approach KRERA, seeking project completion, compensation for the delays, and financial losses incurred.

    The developer, Menorah Realities, countered these claims by denying any wrongdoing and asserting that the project was never halted intentionally. They attributed the construction halt to the wall collapse incident caused by heavy rain, which prompted the local municipal corporation to suspend construction pending a thorough investigation into the adjoining project. The developer claimed to have sent multiple requests to the corporation to lift the construction suspension.

    Shetty, on the other hand, argued that in 2015, she had requested a minor modification in the kitchen, which did not entail structural changes. However, this request remained pending, and without any communication from the developer, the project came to a complete halt. When construction eventually resumed, the requested modification had not been implemented, yet the developer demanded an additional Rs 70,000 for it.

    KRERA’s findings concurred that, regardless of the circumstances, the project was not delivered to the homebuyer within the stipulated timeframe. According to the memorandum of understanding (MOU) signed between the parties following the construction halt, the revised handover date was December 2019. The project received a clearance certificate from the Karnataka Fire Department in 2019 and applied for an occupancy certificate in 2021, which remains pending to date.

    Citing a 2021 Supreme Court judgment in Newtech Promoters and Developers Pvt Ltd vs. Uttar Pradesh government, KRERA emphasized that if a developer fails to provide possession of the apartment within the agreed-upon timeline, the allottee has an unequivocal right to seek a refund with interest under Section 18 and 19 of the RERA Act.

    “The developer, having failed to deliver the apartment, is directed to pay delayed compensation with interest and hand over possession,” the KRERA order concluded.

    Also read: Suraksha Group’s Plan for Jaypee Infratech Projects Approved by Yamuna Expressway Authority

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