KRERA Action Against Mysuru Developer: Key Highlights
- Karnataka Real Estate Regulatory Authority (KRERA) has pulled up the developer of Astrum Grandview Phase I in Mysuru for major statutory lapses.
- Completion Certificate Not Obtained: The developer failed to secure the mandatory Completion Certificate (CC), despite issuing possession letters between 2020–2022.
- 100% Property Tax Penalty on Buyers: Due to the absence of the CC, several flat owners were subjected to a 100% penalty in property tax assessments by local authorities.
- Amenities & Compliance Pending: Promised common amenities, Deed of Declaration, and formation of the Association of Allottees remain incomplete even after nearly nine years.
- Phased Development Argument Rejected: KRERA ruled that phased execution cannot override statutory obligations under the Real Estate (Regulation and Development) Act, 2016.
- Warning Under Section 63: The authority has directed immediate compliance and warned of regulatory action under Section 63 if the developer fails to submit a detailed action plan and obtain the CC.
The Karnataka Real Estate Regulatory Authority (KRERA) has reprimanded a Mysuru, based developer for not getting the Completion Certificate (CC), which is a regulatory requirement. Due to this oversight, several homebuyers have reportedly been subjected to a total property tax penalty of 100% by the local bodies.
The matter is about the residential project Astrum Grandview Phase I located at Mysuru, which is the brainchild of Astrum Value Home. The project came into existence in 2014. However, after almost nine years, the buyers claim that not only are various amenities promised to them still lacking but also the major statutory requirements have not been met.
Through the order, KRERA stated that the developer had only partially complied with the previous instructions issued in the dispute cases relating to the same project. The authority has ordered the promoter to get the completion certificate at once and to submit the latest compliance report in detail.
“The developer shall obtain the completion certificate from the competent authority and submit the same before this authority. The developer is directed to submit a detailed compliance report/action plan before this authority, clearly specifying the list of amenities and infrastructure works already completed and those remaining to be completed in the project,” the order said.
The regulator further instructed the developer to provide a clear and time-bound action plan detailing when each pending amenity, shared facility, and statutory compliance would be completed.
“The plea of phased development cannot be used as a tool to postpone compliance or deny legitimate rights of the allottees,” the authority observed in strong remarks against the justification offered by the promoter.
Buyers allege prolonged delays despite full payment
According to the order, homebuyers informed KRERA that they had paid the entire sale consideration, including advance maintenance charges, club membership fees, and a corpus deposit of ₹1 lakh per allottee. Possession letters were issued between 2020 and 2022, and several sale deeds were executed in favour of the complainants.
However, buyers alleged that despite possession and registration:
- The Completion Certificate has not been obtained
- The Deed of Declaration has not been executed
- The Association of Allottees has not been formed or handed over
- Several common amenities and infrastructure works remain incomplete
The order noted, “Possession letters were issued between 2020 and 2022, and several sale deeds were executed in favour of the complainants. However, despite such possession and registration, the Respondent has not completed the project in its entirety, not obtained the Completion Certificate / Completion Report, not executed the Deed of Declaration, not formed or handed over the Association of Allottees, and not completed the promised common amenities,” as pet HT.
One of the most serious consequences of the missing completion certificate has been financial. KRERA recorded that the absence of the CC has resulted in local authorities imposing a 100% penalty in property tax assessments for several flat owners.
“Due to non-obtaining of the Completion Certificate, several complainants have been subjected to a 100% penalty in property tax assessment by the local authorities,” the order said.
Deviations and phased development argument rejected
Homebuyers further alleged that the developer deviated from the sanctioned plan, carried out unauthorised alterations, carved out and sold additional plots without consent, and reduced the undivided share of land belonging to existing apartment owners.
In its findings, KRERA held that the developer had failed to complete the project and promised amenities within the stipulated timeline.
“However, even after the lapse of nearly nine years, the Respondent has admittedly not completed several common amenities and facilities promised under the Agreement for Sale, brochures and representations made at the time of booking,” the authority said.
The developer argued that Phase I and Phase II were independent and that amenities were being developed in stages. However, the regulator rejected this contention, noting that phased development cannot override statutory obligations under the Real Estate (Regulation and Development) Act, 2016.
“Section 11(4)(a) mandates that the promoter shall be responsible for all obligations until conveyance of common areas to the association. Section 17 mandates a statutory obligation on the promoter to execute the registered conveyance deed in favour of the association of allottees, and hand over common areas and common facilities within the prescribed time,” the order said.
The authority also noted that an earlier order had already directed the completion of amenities and formation of an association, but full compliance was still lacking.
“The records reveal that even after an earlier order passed by this authority directing completion of amenities and formation of an association, the developer has failed to fully comply,” it stated.
Warning of action under Section 63
KRERA has issued a warning that if the present directions are not complied with, further regulatory actions will be taken.
If the directions issued in this order are not complied with or the compliance report is not submitted, the Authority shall, without any further reference, initiate action under Section 63 of the Real Estate (Regulation and Development) Act, 2016, reads the order.
The matter is indicative of the concerns that continue to exist in relation to instances of delayed statutory compliance, lack of complete amenities, and the financial burden which, even after taking possession, the homebuyers have to bear. At the same time, it sends a strong message from KRERA that the developers cannot hide behind phased development to avoid fulfilling the obligations that the law lays out to them towards the beneficiaries/ allottees.
Image source- rera.karnataka.gov.in
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