The Karnataka Real Estate Regulatory Authority (KRERA) has ordered a developer to return a plot to the initial homebuyer, reversing its earlier sale to a second buyer after an eight-year delay in delivering the property. The case is regarding a plotted development by Vega Spaces called Bella Palms in Belgaum. The homebuyer had invested INR 16 lakh in 2014 but the sale deed was not signed despite him paying INR 9 lakh by 2017. After submitting a revised plan, the developer cancelled the previous allotment and sold all the plots to a third party. However, KRERA ruled in favour of the initial homebuyer, citing the contractual agreement and substantial initial payment received by the developer.
The Karnataka Real Estate Regulatory Authority (KRERA) has ordered a developer to return a plot to the initial homebuyer, reversing its earlier sale to a second buyer after an eight-year delay in delivering the property.
In this case, when the developer failed to sign the sale deed, the homebuyer stopped paying the pending amount. Then the developer decided to cancel the agreement and sell it to another buyer. However, KRERA ordered the developer to return the plot to the initial homebuyer due to contractual obligations.
Col Sai Krishna invested INR 16 lakh in 2014 for a plotted development called Bella Palms in Belgaum by Vega Spaces. However, despite paying INR 9 lakh by 2017, the sale deed was not signed.
The project, Bella Palms in Belgaum, is a plotted development and is currently unregistered under KRERA.
Krishna filed a complaint at KRERA demanding the sale deed be executed and the plot be handed over to them. However, the developer contested the case before the authority saying that after acknowledging the first payment, the homebuyer did not come forward to pay the remaining amount.
Vega Spaces argued it cancelled the allotment in 2017 as Krishna did not pay the remaining amount. In 2020, when the local authority approved a revised plan, Vega Spaces sold all plots, including Krishna's, to third parties.
While Vega Spaces offered to refund the amount paid, KRERA noted the 2014 allotment agreement was a contractual obligation. The developer waited three years before selling the plot to others.
KRERA ruled the sale deed must be signed and the plot handed over to Krishna without any price increase, as substantial payment had been received. The developer was also directed to register the project with KRERA as ongoing and complete the transaction with the initial homebuyer.
The order highlights the importance of honouring contractual agreements and protects the rights of initial homebuyers. It sets an important precedent for real estate developers to comply with regulatory timelines, avoid arbitrary cancellation of allotments, and prioritize project completion over resale of units. By upholding the sanctity of commitments made to buyers, KRERA aims to foster greater transparency and accountability in real estate transactions.
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