Monday, July 22, 2024

Key KRERA Decisions Shaping Bengaluru’s Real Estate Landscape in 2023

Karnataka Real Estate Regulatory Authority (KRERA) issued several impactful orders in 2023, significantly influencing the real estate landscape in Bengaluru. Here are the top five game-changing decisions:

  1. Flood Compensation Mandate:
    In a groundbreaking move, KRERA ruled in July that flooding within an apartment complex could not be deemed an “act of God.” Consequently, a developer was directed to compensate homebuyers in the affected project with Rs 1 lakh, challenging the notion that natural disasters absolve builders of responsibility. This decision comes amid recurring flooding issues in Bengaluru, primarily attributed to urbanization and encroachments.
  2. Cancellation Deed and Interest Claims:
    KRERA addressed the issue of interest claims by homebuyers after signing cancellation deeds and receiving refunds. Emphasizing the finality of the settlement outlined in the cancellation deed, the regulatory body stated that such agreements preclude subsequent claims for delayed interest. Employing the doctrine of estoppel, KRERA asserted that parties cannot contradict previously agreed-upon terms.
  3. Valid Documentation Requirement for Developer Claims:
    In a relief for homebuyers, KRERA ruled that developers cannot demand delay interest for non-payment of dues without providing valid documents such as building plans and project clearances. The decision was prompted by the revelation that many documents submitted by developers, including the Bengaluru Development Authority (BDA) modification plan and elevation plan, were either expired or invalid. This order protects homebuyers from unjustified claims by ensuring the legitimacy of supporting documents.
  4. Minimum Parking Regulations:
    Addressing the growing parking challenges accompanying Bengaluru’s real estate expansion, KRERA set a precedent by stipulating that developers must provide a minimum parking space of 18 square meters (3m x 6m) per allottee. This move countered the trend of developers reducing parking spaces to maximize saleable space, aligning with local municipal bylaws in Bengaluru.
  5. Occupancy Certificate (OC) and Compensation Eligibility:
    KRERA clarified that homebuyers accepting possession before obtaining the Occupancy Certificate (OC) would not be entitled to compensation in cases of delayed possession. Citing the Bruhat Bengaluru Mahanagara Palike Act, which mandates possession only after obtaining OC, KRERA highlighted the contractual violation by both developers and homebuyers in such instances. This decision aims to discourage premature possession, preventing developers from exploiting situations arising from the absence of OC.

These KRERA orders collectively mark a significant regulatory stance aimed at safeguarding the rights and interests of homebuyers in Bengaluru’s real estate market.

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