KRERA Orders Developer to Return Plot to Initial Homebuyer Despite Sale to New Owner

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    The Karnataka Real Estate Authority (KRERA) has made a decision requiring a developer to give back a plot, which was already sold to another buyer, to the original homebuyer after a delay of eight years.

    In this situation, the developer didn’t finalize the sale deed, so the homebuyer stopped paying the remaining amount owed. Then, the developer decided to cancel the agreement and sell the plot to someone else.

    However, KRERA directed the developer to return the plot to the first homebuyer because of their contractual commitments, as per the order issued on April 20.

    The project, Bella Palms in Belgaum, involves developing plots and is currently not registered under KRERA.

    The homebuyers, Col Sai Krishna and family, invested Rs 16 lakh in the plot developed by Vega Spaces in 2014. However, by 2017, when they had paid about Rs 9 lakh, the developer hadn’t finalized the sale deed despite multiple reminders.

    Krishna filed a complaint with KRERA requesting the execution of the sale deed and the transfer of the plot to them.

    However, the developer argued before the authority, stating that after acknowledging the initial payment, the homebuyer didn’t proceed to pay the remaining amount.

    “So, after waiting for three years, we considered the allotment canceled, and the homebuyer is entitled to a refund,” said Vega Space to KRERA.

    In 2020, the local planning authority, Belgaum Urban Development, approved a revised plan for the project, and the developer decided to sell all plots to other buyers.

    “The homebuyer didn’t pay the remaining amount before the new layout was formed, so the sale deed couldn’t be finalized. We are willing to refund the initial payment made by them,” added the developer.

    However, despite the developer’s readiness to refund the amount paid, KRERA observed that both parties entered into an allotment agreement in 2014.

    The company waited three years for the homebuyer to pay the remaining amount and then decided to sell the plots to others after the revised project plan was approved.

    Nevertheless, KRERA stated that the allotment letter is a crucial contractual obligation. “According to the agreement, the developer should hand over the plot by 2017. But the handover and the signing of the sale deed are still pending,” the authority said.

    Since the developer accepted a substantial amount from the homebuyer, they are obligated to execute the sale deed without increasing the plot prices, KRERA ordered.

    “The developer must register the project under KRERA as an ongoing one and also transfer the plot to the homebuyer after signing a sale deed,” it concluded.

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