Although the deadline was extended, real estate developers have completed a mere 51 of the 424 apartment projects, leaving thousands of homebuyers in the lurch, and prompting a stern reaction from Karnataka Real Estate Regulatory Authority (K-RERA).
However, while K-RERA plans to act against defaulting developers, realtors say hurdles caused by the pandemic was the reason for projects lying incomplete and want deadlines pushed back by another six months.
K-RERA had extended the deadline for apartment projects that were supposed to be completed in April or later to September 30 as a relief measure to bolster the sector which was badly affected by the pandemic.
While data shows only a few projects have been completed within the extended deadline, KRERA officials said they will wait till the end of the month to assess the situation before cracking down on defaulting developers.
“Developers must face legal consequences if they are found to have failed to deliver flats to customers within the extended deadline. We will issue notices to them,” said HC Kishore Chandra, chairman, K-RERA.
Rules state if a builder fails to deliver a flat within the date mentioned in the sale agreement, then he must pay 9% interest on the value of the flat for the delayed period besides compensation fixed by K-RERA.
This is the third deadline extension developers were given after Covid-19 hit in March 2020. Based on the Centre’s directive, K-RERA first extended the deadline by six months from March 15, 2020 and subsequently extended it by another three months.
In all, 525 of 4,378 approved projects were unfinished within the stipulated time, while deadlines for 241 projects were extended for general reasons unrelated to Covid. While 284 applications seeking extension are still under process, the completion date has expired for 976 projects.
“This is a sorry state of affairs,” said MS Shankar, general secretary of Forum for People’s Collective Efforts. “Customers are in distress with no support forthcoming from the government. K-RERA should be proactive in enforcing rules and ensure justice for homebuyers.”
He said homebuyers must now wait longer for possession but must continue repaying home loans, while the government’s generosity is limited to developers. But developers argue that the extended deadline did not really benefit the sector since it was not uniformly applied to all projects.
“The K-RERA circular said any project that was due to be completed by April 1, 2020 gets extension up to September 30, 2020. This means the extension differs from project to project. For example, a project that was due for completion on September 29, 2020 would get an extension of only one day,” said Bhaskar Nagendrappa, president, CREDAIBengaluru, while demanding a uniform six-month extension.
But homebuyers say the extension was unwarranted as, unlike the first wave, there were no curbs on construction activity during the second Covid wave. But developers counter that saying business was severely hit because of the ferocity of infections and the higher fatality rate.