Karnataka RERA issues SOP, software for faster recovery of pending dues

The Karnataka Real Estate Regulatory Authority (RERA-K) has issued a new Standard Operating Procedure (SOP) and is developing specialised software to improve the enforcement of its orders, a move expected to address the long-standing problem of poor recovery of dues owed to homebuyers. As per official data, only about 10% of the value of Revenue Recovery Certificates (RRCs) issued by the Authority has been recovered so far.

An RRC is a certificate issued to recover dues as arrears of land revenue, typically against builders who fail to comply with RERA orders. According to data available with RERA-K, a total of 2,556 RRCs worth ₹1,214.32 crore have been issued. Of these, 329 RRCs worth ₹123.84 crore have been recovered, leaving 2,227 RRCs worth ₹1,090.48 crore pending.

A circular issued by RERA-K on July 28 lays down a detailed SOP for revenue recovery, operationalising Section 40(2) of the RERA Act, 2016. This provision empowers RERA to enforce its orders “in the manner as if it were a decree or order made by the principal civil court of the original jurisdiction in a suit”. While this provision was already on the statute, it was rarely used, hampering enforcement of RERA orders.

The SOP outlines a step-by-step process to be followed in cases where a builder fails to comply with an order. After 60 days of passing an order, RERA-K will check compliance by communicating with both the builder and the homebuyer. If the builder has not fully complied, the homebuyer can file a petition on the RERA-K portal seeking enforcement of the RRC. The builder is then given two weeks to comply or file a response, followed by another two weeks for final compliance.

If the builder still does not comply, they will be directed to file an affidavit disclosing details of all movable and immovable assets, including bank accounts and other investments, within two weeks. The homebuyer will also be given an opportunity to submit details of the builder’s assets known to them. If there is still non-compliance, an RRC will be prepared and forwarded for attachment and auctioning of the properties, including bank accounts.

For non-monetary reliefs covered under Section 40(2) of the RERA Act, the Authority may either enforce the order directly as a civil court decree or transmit it to the Principal Civil Court having jurisdiction over the builder.

The State government has appointed Jayamadhava P., Special Deputy Commissioner, Bengaluru Urban District, as the officer in charge of implementing RRCs in Bengaluru, the district with the highest number of pending RRCs. Speaking about the ongoing efforts, he said, “We are streamlining the process of implementation of RRCs, including developing a dedicated software and a portal for the same. This will remove inordinate delays and ensure they are implemented within the 3.5 months’ time needed to implement any RRC, giving due time to the builders to respond and comply as per the rules. This will bring in more transparency and help the complainant homebuyer to also follow up on the process of implementation of RRCs.”

M.S. Shankar, general secretary of the Forum for People’s Collective Efforts, a homebuyers’ association, welcomed the operationalisation of Section 40(2), saying it will give more teeth to the Authority. “RRCs cannot remain passive requests sitting in administrative limbo. The Authority must routinely invoke its powers as a Principal Civil Court under Section 40(2) of RERA Act, 2016, to directly attach assets and compel compliance,” he said.

The new measures are expected to significantly improve the pace of recovery and provide much-needed relief to homebuyers who have been waiting for refunds and compensation from errant builders.