Developers are bound to show land documents before purchase, says Karnataka authority

In January 2020, the buyer decided to move KRERA, seeking a refund of the money he paid to the developer.

The Karnataka Real Estate Regulatory Authority (KRERA) has held that developers are liable to provide documents proving their land title to homebuyers before executing a sale deed.

The ruling came on a case related to a luxury project in eastern Bengaluru's IT corridor of Sarjapura.

Having paid Rs 2 lakh for booking an apartment, the homebuyer decided to hold back on the purchase decision after developer RD Buildtech and Developers Pvt. Ltd declined to share the land title documents.

In January 2020, the buyer decided to move KRERA, seeking a refund of the money he paid to the developer.

"The promoter has the duty under the law to make the documents available to the homebuyers before the purchase," the KRERA order dated May 12 said.

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The case

KRERA noted that the developer had assured the homebuyer that the land title was free of any litigation. Additionally, the developer had asked the homebuyer to pay the booking amount before the company could be sent the documents.

After the initial payment, the developer sent several documents to the homebuyer, but left out several pertaining to the land title.

When the homebuyer considered holding off the decision to purchase the apartment, the developer declined to reimburse the booking amount.

KRERA finding

The authority noted that both the homebuyer and the developer had not signed the sale agreement.

Despite repeated reminders and legal notices, the developer failed to refund the money to the homebuyer.

"When a homebuyer decided to purchase an apartment, he has to take all precautions before the investment. It is his responsibility also to verify the authenticity of the land parcel," the order said.

The claim of the homebuyer cannot be challenged in this case, the order added.

"The developer is redirected to refund the booking amount and cancel the booking within 60 days," it concluded.

Lawyers say several plots in Bengaluru are embroiled in litigation issues that delay projects over months or years. And in several cases, the developers only show their land titles after the sale agreement is executed.

"Thus largely, this order will ensure that homebuyers can verify the land parcels before they sign the sale agreement," one advocate said.