Puravankara Subsidiary Penalized by KRERA for Delayed Apartment Handovers Amid Rising Home Loan Rates

None

In a significant development that resonates with the concerns of numerous homebuyers facing delays in property handovers, the Karnataka Real Estate Regulatory Authority (KRERA) has made a landmark decision against Provident Housing, a subsidiary of the esteemed Puravankara Ltd. The regulatory authority mandated Provident Housing to compensate for the delay in the handover of Provident Noera apartments in Yelahanka, north Bengaluru, marking a critical stance against unfulfilled delivery promises in the real estate sector.

The verdict, delivered on March highlights the plight of homebuyers like Dasari Naresh, who have been burdened with the financial strain of paying high-interest home loans amidst the Reserve Bank of India's static interest rates, currently paused at 6.50 percent. With home loan rates hovering between 8-15 percent across various banks as of March 2024, the financial impact on consumers has been profound.

Provident Housing has been found in violation of its commitments, having failed to hand over the apartments six years post-launch, contrary to their claims of a 2018 launch. The discrepancy has led KRERA to invoke Section 18 of the RERA Act, allowing Naresh to claim compensation for the undue delay. The order stipulates Provident Housing to pay delayed interest on the EMIs paid by Naresh at the rate of SBI MLCR plus an additional two percent from December 2023 until the handover, totaling Rs 7.7 lakh within a 60-day timeframe.

In response, Provident Housing attributed the delay to external bureaucratic hurdles, particularly the non-issuance of height clearance by the Government Flying Training School (GFTS) at Jakkur, which impeded the acquisition of the occupancy certificate. However, with the clearance issues now resolved and the occupancy certificate granted, Provident Housing aims to rectify the situation.

This ruling by KRERA not only underscores the regulatory body's commitment to protecting consumer rights but also signals a cautionary note to developers about the paramount importance of adhering to promised delivery timelines, especially in a market burdened by rising loan interest rates.