The Karnataka Real Estate Regulatory Authority (KRERA) has held in an order dated June 23, 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 order was passed in a case pertaining to a Prestige Group project in south Bengaluru, where the homebuyer had booked an apartment at Prestige Bagmane Temple Park in March 2017.
Per the construction agreement, the developer was supposed to hand over the possession of the apartment by December 2018.
KRERA noted that the project completion certificate (CC) was issued by the architect in June 2017. However, due to an ongoing National Green Tribunal (NGT) order on lake buffer zone encroachment, the OC was issued in June 2019 , delayed for almost two years since the completion of the project.
Due to financial pressure, the homebuyers accepted possession in December 2018, before the OC was issued.
The homebuyer then moved the KRERA seeking compensation for the delay in issuing the OC, from the promised hand-over date till when the OC was actually received.
KRERA finding
KRERA noted that the CC was issued by the architect within the promised deadline.
"After receiving the CC, the respondent had applied for OC in 2017. However, the ongoing NGT case, which reached the Supreme Court later, delayed the issuing of the OC. The developer was not a party to the litigation," the order said.
However, the developer had given possession and hence the homebuyers were not entitled to compensation, the order added.
Homebuyers, be aware
According to advocate Vittal BR, the matter of the OC is still contentious in Karnataka with several forums passing diverse orders on the issue.
For example, in March Moneycontrol had reported that the National Consumer Disputes Redressal Commission (NCDRC) had clarified in a case related to a Bengaluru project that actual possession will be considered on the date the occupancy certificate (OC) is issued, even if homebuyers had moved into the apartments prior to that.
In another order in May, KRERA had said that execution of the sales deed and handing over possession to homebuyers does not mean that the project is complete, unless and until the CC and OC are obtained.
Shilpa Rani, an advocate who represented the homebuyers in the case, added that legal possession should only be offered after the OC is obtained. Otherwise, the homebuyers should move in at their own risk.
Experts say several homebuyers in Bengaluru have already moved in without the OC due to financial constraints.
"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, added.
Another homebuyer, who has moved in without the OC in another project, said problems such as proper electricity, water, and the lack of a sewage treatment plant (STP) continue to persist. "Most importantly, we are not able to hold anyone accountable because the local municipal body says they have not issued an OC," he added.
In such cases of delayed possession, Vittal added, the homebuyers should approach either RERA or the consumer forum, before accepting possession from the developers.
Moneycontrol had sent a list of questions to the developer, but the company declined to comment.
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