In a significant ruling, the Karnataka Real Estate Regulatory Authority (K-RERA) court has granted authorization to home buyers to assume the responsibilities of actual promoters in a residential project comprising 65 apartments on Sarjapur Road. Moreover, the court has given them the green signal to utilize the funds generated from the sale of 10 apartments that they are currently constructing within the project premises. This landmark decision empowers home buyers to actively participate in the project's development and take charge of its completion, marking a positive step towards ensuring transparency and accountability in the real estate sector.
On Monday, July 17, a full bench, consisting of Chairman HC Kishore Chandra, Neelamani N Raju, and Gurijala Ravindranadha Reddy, delivered a favorable verdict in support of the Vivansaa Aurigaa Apartment Owners Cooperative Society Limited. The home buyers had taken legal action against the original promoter, Vijicon Properties, and 21 other entities, including private and public sector banks, following the abandonment of their residential project by the builder. The court's decision now upholds the rights of the home buyers and holds the involved parties accountable for the project's incomplete status. This ruling sets a crucial precedent for safeguarding the interests of homebuyers and seeking justice in situations where real estate projects face abandonment or lack of completion by developers.
The legal representation for the home buyers in the case was provided by Pradeep Kumar PK & Associates. According to Advocate Pradeep Kumar, who spoke with TNIE (The New Indian Express), the agreement with the buyers, dated June 30, 2016, stipulated that the project should have been delivered by July 2017. The buyers were only required to make an initial payment of 10 percent for the project, and the EMI payments were scheduled to begin after the houses were handed over. Each 2 BHK house was priced at over Rs 40 lakh at that time.
Due to a lack of funds, the promoter faced financial difficulties, resulting in the project being abandoned from March 2020 until December 2022. Advocate Pradeep Kumar explained that only 50% of the project had been completed before the abandonment. The banks had provided funding under the subvention scheme, wherein the loans taken by buyers were directly credited to the builder. However, the builder had utilized all the funds to cover the pre-EMI period of the buyers and had no remaining funds to complete the project. This financial situation led to the unfortunate halt of the project's progress for almost three years.
The situation took a turn for the worse when the banks began pressuring the buyers to repay their loans. This issue was particularly concerning for many buyers who were NRIs (Non-Resident Indians). The banks went as far as issuing orders to attach their properties in cities like Delhi, Gurgaon, and others. Faced with this distressing situation, the home buyers sought protection and relief, leading them to approach K-RERA (Karnataka Real Estate Regulatory Authority). Advocate Pradeep Kumar praised K-RERA for playing a crucial role in coming to the rescue of the buyers and providing them with much-needed support and assistance during this challenging time.
Following the guidance of RERA (Real Estate Regulatory Authority), a cooperative society was established, comprising 30 home buyers who had either paid their entire amount or were consistently making timely EMI payments. Together, they pooled more than Rs 9 lakh, and subsequently, the sanction plan was modified after approaching the relevant civic authorities. The objective was to secure the necessary approvals to proceed with the project. Advocate Pradeep Kumar stated that upon the successful sale of the ten completed flats, the cooperative society would have sufficient funds to carry out the project's completion, providing a ray of hope for the long-awaited resolution of the situation.
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