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Shriram Properties for providing misleading information to buyer

In this case the developer's subsidiary sold an apartment to the buyer worth Rs 1.2 crore claiming that the Highrise would have 27 floors with RERA approval. However, the project had only 20 floors. The Karnataka Real Estate Regulatory Authority (KRERA) has ordered Suvilas Properties, a wholly-owned subsidiary of Bengaluru-based listed real estate player Shriram Properties Ltd (SPL), to refund the entire booking amount after it provided wrong information to the buyer before the sale. In this case, the developer sold an apartment to the buyer worth Rs 1.2 crore claiming that the highrise would have 27 floors with RERA approval, however, the project had only 20 floors.

Passing the order on April 17, KRERA asked the developer to refund the booking amount of Rs 50,000 with interest. The project is part of the stressed project acquired by Shriram Properties in 2022, Moneycontrol reported.


The case

The project ‘The Poem’ is located close to Yeshvanthpur Hobli in north Bengaluru. It is an ongoing project with the RERA registration valid till 2026. After reserving the flat with the booking amount, the homebuyer, Amitkumar Kuhikar, was shocked to see on the RERA website that the project has only 20 floors.


When contacted, the developer told him that the project would be getting RERA approval for the same, however, could not provide a timeline. Thus on March 23, the homebuyer approached the developer for cancellation of the booking and refund of the amount paid.


"There are no misrepresentation or misselling of the Project beyond the approved Plan. The project (The Poem by Shriram) is currently approved for G+19 floors and all our sales promotion is for G+19 floors only. The company has built certain provisions in the customer agreements for additional floors, as it is working towards securing approvals for the additional area. These enabling provisions in the agreement is intended towards obtaining customer consent for higher floors in case plan approval comes through in future," a company spokesperson said. The order

The Authority noted that the developer had provided wrong information about the number of floors and RERA approval.


Despite several reminders through email, the developer has not refunded the money invested by the homebuyer. "The complaint is not of delay, but about the homebuyer seeking a voluntary refund," the authority added.


Thus it ordered the developer to refund the complete amount with interest. Currently, the project The Poem has two more complaints registered at the authority regarding the issue of refund of booking amounts of Rs 50,000 and Rs 1 lakh respectively last year.


In one other case in September last year, the developer had taken almost 10 percent, or Rs 9 lakh, of the total apartment cost, yet failed to register the sale agreement as required under the RERA Act, leading to KRERA ordering SPL to refund the entire amount with interest.


In November 2022, SPL acquired 100 percent equity of Suvilas Realities Private Ltd, through its wholly-owned subsidiary Shriprop Builders Private Ltd, Moneycontrol had reported. The acquisition helped the SPL to secure two delayed projects in Bengaluru allowing it to develop 0.65 million square feet with potential revenue of Rs 400 crore. Source: https://www.moneycontrol.com/news/business/real-estate/krera-pulls-up-shriram-properties-for-providing-misleading-information-to-buyer-12675761.html


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