BENGALURU: The Karnataka Real Estate Regulatory Authority (Rera) is set to implement a project closure policy, making it the second state in India to do so, following Odisha.
The purpose of this policy is to enhance transparency and accountability in builders’ submissions while safeguarding homebuyers. It mandates that projects can only be closed after all statutory and service-related compliance is verified. Until now, the authority has only recorded self-declared project completions from promoters without any verification, even since its establishment in 2016.
K-Rera chairman Rakesh Singh informed TOI that the new policy aims to ensure clear communication and accountability from builders to homebuyers. “It will pressure builders to ensure the accuracy of their claims, reassuring homebuyers that their promises have been honored. Odisha has implemented a similar mechanism, but it has yet to be adopted elsewhere in the country. We’ve conducted preliminary exercises and expect to finalize the policy within the next week or ten days,” he stated.
Singh believes that this system will benefit both builders and buyers.
According to Karnataka Rera data as of October, there were 1,080 applications for project completion certificates or extensions, out of which 886 were approved, 69 rejected, and 125 were still under review, while 2,746 projects had passed their completion deadlines.
Homebuyers assert that this new policy will prevent promoters from declaring projects complete without verification. Only those who have settled all dues and complied with court or authority orders will be permitted to initiate new projects. By strengthening compliance checks and tying payments to full project completion, the policy is designed to mitigate fraud and delays, ensuring that builders honor their commitments.
The Karnataka Home Buyers Forum had previously expressed to Rera on August 30 last year the necessity of implementing this policy for greater transparency. Forum convenor Dhananjaya Padmanabhachar remarked, “This indicates a significant neglect of duty by the authority in the state, raising concerns about potential corruption and a powerful promotional lobby. In my own experience, the promoter declared my apartment project as complete, yet it remains unfinished. Rera was later compelled to instruct the promoter in September to finalize land and flat khatas, transfer title deeds, and allocate the corpus fund to the housing association. This new policy will streamline these processes.”
MS Shankar, general secretary of the Forum for People’s Collective Efforts, emphasized, “Such a measure ensures automatic compliance, simplifies recovery for homebuyers, and curbs repeated violations. Builders should not demand full payment until projects are completed—75% should be paid upon obtaining an occupancy certificate, with the remaining 25% only payable after acquiring a completion certificate. This would provide a strong financial incentive for completion while ensuring official verification before final approvals, safeguarding buyers from living in incomplete developments.”
Srinivasa Rao Talla, secretary of the Bengaluru City Flat Owners Welfare Association (BCFOWA), added, “The project closure policy rightly mandates that builders secure all statutory clearances—OC, PCB, BESCOM, BWSSB—before claiming project completion.”
