Karnataka Real Estate Regulatory Authority (KRERA) has ordered Provident Housing, a subsidiary of Puravankara Ltd, to pay delayed interest on the home loan EMI component paid by the homebuyer after failing to handover the Provident Noera apartment six years since its launch.
Passing the order on March 14, the authority noted that this often becomes a burden on the homebuyers of delayed projects, especially in this case where the developer continued to extend delivery dates with "fake promises."
This comes at a time when homebuyers continue to pay high home loan interest rates, following the Reserve Bank of India’s (RBI) pause in rate hikes at 6.50 percent. Currently, home loan rates vary between 8-15 percent in various banks as of March 2024.
The order
The project, located in north Bengaluru's bustling real estate hotspot, Yelahanka, has 2BHK apartments ranging between 890 - 920 sq ft.
While the homebuyer claims that the project was launched more than seven years back, the developer website claims the date of launch to be 2018.
According to submissions made to the authority, the homebuyer, Dasari Naresh, signed the sale agreement in 2019 with a handover date of 2023.
"Due to a delay in the handover date, the homebuyer has been paying EMI with interest to the bank, thus suffering a financial loss," the order pointed out.
Despite several requests to the developer, the homebuyer claimed that Provident Housing continued to extend the date for delivery of the apartments.
Citing Section 18 of the RERA Act — which allows the homebuyer to claim compensation in case of delay in project completion — KRERA said the developer is liable to pay a delayed interest on the EMIs paid by Naresh.
"The developer has to pay delayed interest at the rate of SBI MLCR with an additional two percent from December 2023 till handover of the apartment, amounting to Rs 7.7 lakh within 60 days," KRERA ordered.
"The order was passed based on the homebuyer's opinion by the KRERA. The project was completed before time, but the occupancy certificate could not be procured because of the non-availability of the system for issuing height clearance by the Government Flying Training School (GFTS) at Jakkur. As developers, we have done the best we could do. Sometimes, the system takes time. Now the clearance issue is resolved and the project has been granted OC," a spokesperson for Provident Housing said.
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