News: KRERA Orders Casa Grande to Pay Rs 4 Lakh for Early Demands-11-05-2026
The Karnataka Real Estate Regulatory Authority (KRERA) has held that homebuyers cannot be asked to pay in advance on unverified claims of construction progress, and has directed Bengaluru-based Casa Grande Garden City Builders Pvt Ltd to compensate a buyer for demands raised without architect or engineer certificates.
The developer must pay Rs 2 lakh for the mental agony caused to the complainant and another Rs 2 lakh for the premature demands. It has 60 days to comply, after which the compensation will carry interest at MCLR+2% from the 61st day until realisation.
The buyer’s case was that payments were to be collected strictly according to stage-wise progress backed by architect or engineer certificates. Instead, the developer sent several demand letters between April and August 2024 claiming completion of the basement, ground floor, first floor and third floor. The buyer paid Rs 69.66 lakh, of which around Rs 12 lakh was collected before the relevant stage had actually been reached, the authority found.
According to the complaint, the buyer visited the site once construction had reached the second floor and realised that the structure shown in earlier progress reports was not his unit. A project progress report of November 2024, he said, showed units No. 10, 11, 12, 13, 14 and 15, his own included, still at the basement stage, which proved the earlier reports and demands inaccurate. He alleged false demands, misrepresentation, cheating, unfair trade practice and breach of statutory obligations under RERA.
The developer’s position, as recorded in the order, was that payments made well ahead of the corresponding stages would be adjusted as upfront benefits, that it had thus extended a financial benefit for early payment, and that it had provided a detailed calculation along with actual site progress.
KRERA was not persuaded. It said the developer had not produced "a single iota of evidence" that demands followed stage-wise progress supported by certificates. Whenever a promoter raises a demand, it observed, allottees must be told the actual stage of the project, with site photographs and architect or engineer certificates. Without these, it was difficult to know the exact progress.
The authority added that no document had been produced to back the claim that the complainant received any financial benefit for paying early. It therefore held the buyer entitled to compensation.
A list of questions has been sent to the developer.
