Bengaluru: Karnataka's real estate regulator is not facing a shortage of funds, but it is increasingly losing control over its own regulatory corpus. While the Karnataka Real Estate Regulatory Authority (K-Rera) continues to generate steady revenue through project and agent registrations, penalties, and various fees, its ability to independently decide how these funds are utilised has gradually diminished. Control over the regulator's dedicated fund has increasingly shifted to the state government, raising concerns about K-Rera's operational autonomy.
The K-Rera Regulatory Fund—a dedicated account mandated under the Real Estate (Regulation and Development) Act, 2016—is meant to ensure the authority's financial self-sufficiency. The fund was designed to allow the regulator to independently hire staff, process complaints, and manage day-to-day operations without relying on state budget allocations.
However, this structure has effectively been altered over time. The shift began on March 30, 2019, when the government took over Rera receipts of around Rs 44 crore, classifying them under a 'revision fund'. From April 2019, all collections under the Rera framework began flowing into state-controlled accounts, with expenditure for the authority later released through annual budgetary allocations.
Under Section 75 of the Act, the authority was originally expected to function through a dedicated, self-managed Regulatory Fund. Officials and internal communications point out that subsequent finance department instructions in 2021 further formalised the arrangement by moving balances into non-interest-bearing reserve accounts and routing all expenditure through the state budget head. This, officials argue, has effectively 'removed direct operational control' over its own funds—shifting K-Rera from a self-sustaining regulator to a budget-dependent body.
The impact is visible on the ground: delayed recruitment, slower legal and expert consultations, mounting complaint backlogs, and constraints in strengthening basic infrastructure. The authority has shot off letters between March 2021 and July 2022, but officials say there has been no resolution.
The matter reached the high court in 2021, where concerns were raised over the handling of the regulatory fund. The court directed the government to 'retrace and fall in line with other neighbouring states so that autonomy to the authority would emerge,' underscoring the need to restore financial independence. Despite the order, officials say the budgetary system continues, with the state government funding salaries, maintenance, and operations. As of March 2026, K-Rera has collected Rs 85 crore in regulatory revenue.
In a fresh communication to the chief secretary, the authority has again sought urgent restoration of control over the regulatory fund, stating that the current framework limits its ability to function as an independent quasi-judicial regulator. TOI's calls and messages were not answered by state government officials, whereas Rera chairman Rakesh Singh was unavailable for comments.
What Are the Bottlenecks?
The authority has flagged multiple operational bottlenecks—from staffing shortages to pending administrative approvals—that it says are affecting its efficiency.
Consultant hiring powers under scrutiny
K-Rera has pointed out restrictions on hiring external experts in legal, technical, and financial domains. Earlier, the authority could engage consultants based on operational needs. However, after a government communication in February 2024, such appointments now require prior state approval, leading to delays in complaint resolution and impacting the mandated 60-day disposal timeline.
Fee revision proposal pending since 2022
The authority has raised concerns over stagnant registration fees under the 2017 Rules despite a sharp rise in workload and compliance responsibilities. A proposal for revision, submitted on August 24, 2022, is still awaiting approval. Officials say the current fee structure is inadequate to meet rising administrative and technology costs.
Outsourced staff pay and fiscal circular dispute
K-Rera has sought exemption from a December 2023 finance department circular restricting outsourced wages to minimum levels without prior approval. The authority argues that since it functions on self-generated regulatory fees and penalties—not state budget funds—it should have flexibility in remuneration to retain skilled manpower. Since inception, K-Rera has imposed penalties of about Rs 225 crore, including nearly Rs 40 crore in 2023–24 alone.
Staffing, certification and vehicles still unresolved
The authority says the revised Cadre and Recruitment Rules, resubmitted in August 2022 after incorporating government feedback, are still awaiting approval—stalling permanent recruitment. A revised project registration certificate format (Form-C), cleared internally in December 2022, also remains pending formal amendment. Of 81 sanctioned permanent posts, only six officers are currently on deputation, with the rest vacant. On the vehicle front, the government has approved only one of four requested vehicles, citing non-fulfilment of disposal criteria for existing ones.
