Karnataka RERA Orders Casa Grande To Pay Interest For Delay Over Changing Clubhouse Without Homebuyers' Consent

The Karnataka Real Estate Regulatory Authority (KRERA) has recently held that Casa Grande Garden City Builders Pvt. Ltd. made an attempt to change the location of a promised clubhouse without the consent of homebuyers and was liable for delay in handing over possession, directing it to pay interest to Arpan Sarkar and Priya Sarkar.

Chairman Rakesh Singh observed, “The Respondent in this case has made an attempt to change the location of the clubhouse without the consent of allottees. There are dispute as to the location of the clubhouse. The BBMP plan indicates that the clubhouse is in the south east corner of the project. However, the proposed clubhouse site is allegedly situated on BDA land that was encroached upon by the builder or land owner. It is also reported in the spot inspection dated 08.08.2025.”

The case arose after the homebuyers booked a flat in the project Casagrand Orlena for about 1.06 crore and paid over Rs. 10.65 lakh upfront. Possession was promised by August 21, 2024 with a three-month grace period. The buyers said they paid as agreed, but the project remained incomplete.

They argued that the builder attempted to change the clubhouse location without their consent. They said key amenities were linked to the clubhouse and influenced their purchase. They relied on a site inspection that flagged issues with the approved plan and the proposed location.

The builder said only the clubhouse required modification. It claimed it had applied for approval and denied any breach. It said the timeline was an outer limit and subject to extension for justifiable cause.

The Authority rejected this defence. It found that no revised approvals were obtained and pending works were incomplete. It held that changes to sanctioned plans require prior consent of buyers, and this was not taken.

Referring to the Supreme Court's ruling, the Authority noted that a homebuyer can either withdraw from the project and seek a refund with interest and compensation or choose to stay in the project and claim interest for every month of delay in handing over possession.

It also observed, “Mere executions of documents such as Booking Form, Sale Agreements are not sufficient without being completion and hand over of the project by providing all amenities or facilities as agreed.”

The Authority directed the builder to pay Rs. 11.95 lakh as interest within 60 days. It also ordered continued payment of interest from December 19, 2025 till possession is handed over. The builder was further directed to complete the project and share revised plans and documents relating to the clubhouse land with the buyers.

For Complainants: Advocate Mohd. Eshaluddin and Rajesh