BENGALURU: The Karnataka Real Estate Regulatory Authority (K-RERA) has begun issuing show-cause notices to builders implementing over 1,000 building projects in the state for not submitting their annual audit reports to it, a mandatory requirement. The largest number of projects are in Bengaluru.
Highly placed K-RERA sources told TNIE, “We began issuing notices in February and over 500 notices have already been dispatched. The remaining will be completed by the end of this month. Developers have failed to furnish the audit reports for 2022-2023 despite the lapse of a full year. Builders have been given a month’s time to respond as to why they cannot be penalised for the lapse.”
The penalty amount is yet to be finalised for the present batch of notices issued. “We are waiting to hear the explanation from the developers. Certain categories are exempted from submitting these audit reports – projects which have been closed or Occupancy Certificates have been obtained or the Project has been stalled due to litigation,” a source said.
For a similar lapse during the financial year 2021-2022, Show Cause notices were issued to 440 projects and the penalty levied was 0.5% of the total project cost. “Notices ordering them to pay penalty have been issued in January 2024,” he said.
Pending penalty Rs 486 crore
Data from K-RERA reveals that a total of Rs 486.66 crore levied as penalties by it since 2018 is yet to be recovered from 140 builders in 1110 cases (a single project may be be involved in multiple cases). “Builders have paid up in a few cases. The biggest violators are in Bengaluru Urban with over 100 non-paying developers based in the City,” said another official.
The job of recovering the dues lies with the Deputy Commissioners and the Tahsildars in every district and this is laid down clearly under sections 25 and 40 (A) of the RERA Act, he explained. Asked about the poor percentage of recoveries made so far, another senior official said, “We have held multiple rounds of discussions with the Income Tax, the BBMP and other administrative bodies. They asked us to identify the assets of such builders and we are regularly updating them on it. The DCs and the Tahsildars need to play a pro-active role in recovering the penalties levied on builders,” he stressed.