From flood compensation to parking rules: Karnataka RERA’s top five game-changing orders for Bengaluru in 2023

Lakhs of homebuyers walk a treacherous path from booking a house to moving in, one that runs through several government offices, tribunals and courts. However, some KRERA orders have already changed the landscape of Bengaluru real estate.

Among the several orders passed by Karnataka Real Estate Regulatory Authority (KRERA) in 2023, many left an unprecedented impact on the real estate sector in the city. Here are the top 5 KRERA orders that impacted the real estate sector in Bengaluru.

KRERA orders developer to pay flood compensation

In July, KRERA passed an order that flooding in an apartment complex cannot be considered an "act of God" and ordered the builder to pay Rs 1 lakh to homebuyers in the project as compensation.

This comes at a time when Bengaluru continues to make the headlines for massive flooding across the city. Despite all the technological aids and scientific studies, it all boils down to two old culprits – urbanisation and encroachments.

Homebuyers cannot claim interest after signing the cancellation deed, receiving a refund

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In another major order, KRERA noted that as per the deed of cancellation, the amount refunded to the homebuyer was towards a full and final settlement between the parties.

Thus as per the deed of cancellation, the homebuyers and the developer agreed that all rights, liabilities and interest with respect to the property would be considered to have been settled. Accordingly, KRERA said the developer refunded the principal amount as a final settlement, which the homebuyer accepted.

"Thus his claim for delayed interest is hit by the doctrine of estoppel and cannot be considered," the regulator said. Estoppel is the principle that prevents one person from contradicting an action or statement from the past.

Developer cannot claim pending dues, delay interest from buyers without valid documents

Lakhs of homebuyers walk a treacherous path from booking a house to moving in, one that runs through several government offices, tribunals and courts. As many as 500,000 homes worth Rs 4.48 lakh crore are stuck across seven micro markets in the country, according to reports.

In a major relief to the homebuyers, KRERA has held that developers cannot claim delay interest from homebuyers for non-payment of dues until they have furnished valid documents like building plans and project clearances.
Passing an order in favour of a homebuyer, the Authority found that most of the documents provided by the developer, including the Bengaluru Development Authority (BDA) modification plan and elevation plan, were either expired or invalid.

Thus it prevented the developer from collecting delayed interest for non-payment of dues until handing over of the documents.

Minimum parking regulations

With the real estate sector in Bengaluru expanding gradually, vehicle parking became a major challenge in Bengaluru. Developers started cutting down on parking spaces, to be able to sell more space.

However, KRERA intervened and set down a precedent that the minimum parking space provided for allottees should not be less than 18 square metres (3m X 6m), in accordance with the local municipal bylaws in Bengaluru.

Homebuyers taking possession without OC not entitled to compensation

While a project is delayed, often homebuyers, under the burden of financial stress, move into the project even without an occupancy certificate (OC).
However, KRERA has already made it clear that homebuyers who have accepted possession before the occupancy certificate (OC) has been issued will not be entitled to compensation in case of delayed possession.

"The Bruhat Bengaluru Mahanagara Palike Act clearly mentions that possession should be taken only after the OC is obtained. In cases where homebuyers take possession without the OC, not only the developers but also the homebuyers are violating the contractual agreement signed between them. In such cases, developers will always capitalise on the situation," Anil Kalgi, president of the Bangalore City Flat Owners' Welfare Association, said.