Homebuyers hit, K-RERA extends project deadline by 3 more months

Even as homebuyers are struggling to pay both house rent and loan EMIs due to job loss and pay cuts following the Covid-19 pandemic, real estate regulator Karnataka Real Estate Regulatory Authority (KRERA) has given realtors three more months to complete their projects by invoking ‘Force Majeure’ (an act of God) Clause.

The extension would apply to all RERA-registered projects expiring on or after March 15. Earlier, in May this year, the Union government had announced a six-month extension to developers as they were facing labour shortage due to migration triggered by the lockdown.

“In all, we have given a nine-month extension to developers on the state government’s advisory. This is applicable to real estate projects registered with RERA,” M R Kamble, chairman, KRERA told DH.

In a notification issued on December 18, KRERA said: “In view of the Covid-19 pandemic not abating, as per government of India’s instructions contained in advisory dated May 13 and 28 and communication of the government of Karnataka, the authority has decided to further extend the validity of K-RERA registered projects for which completion date expires on or after March 15, 2020, by another three months.”

This is done by invoking ‘Force Majeure’ Clause, the notification said.

However, there is no relief for homebuyers. “This would add to the burden of rent, EMI, loss of compensation, delay and additional interest for home buyers. Builders would get a free hand to delay the project by three more months without any liability of penalty, interest or compensation as envisaged under RERA,” said M S Shankar, general secretary, Forum for People’s Collective Efforts, a non-profit organisation fighting for the rights of homebuyers.

“This is a welcome move by RERA as we are still facing labour shortage. About 80% of workers are back to work. We have communicated to our customers that the projects may be delayed beyond the earlier schedules,” Rajendra Joshi, CEO-Residential, Brigade Enterprises said.