The Karnataka Real Estate Regulatory Authority (KRERA) has taken an important step in addressing an issue with a housing project near Bengaluru. KRERA has ordered the developer, Shree Senior Homes, of a senior living project named Sharadindu State III, to transfer a corpus fund of Rs 62.26 lakh to the Resident Welfare Association (RWA) of the project. This directive follows the RWA's request for relief due to the developer's failure to transfer the corpus fund, despite maintaining the project since 2016. The decision highlights KRERA's commitment to protecting the rights and interests of homebuyers and RWAs in real estate developments.
The Karnataka Real Estate Regulatory Authority (KRERA) has taken a significant step in addressing a housing project issue near Bengaluru. In a recent decision, KRERA has ordered the developer, Shree Senior Homes, of a senior living project named Sharadindu State III, to transfer a corpus fund of Rs 62.26 lakh to the Resident Welfare Association (RWA) of the project.
This directive comes after the RWA, registered under the Karnataka Apartment Ownership Act (KAOA) in 2022, sought relief from KRERA due to the developer's failure to transfer the corpus fund, despite maintaining the project and providing services since 2016. The developer had charged Rs 4.5 per sq ft and also demanded 35 percent of expenses incurred between 2015 and 2022 as maintenance charges and services.
The developer argued that the complaint was unsustainable since the homebuyers belonged to Phase 1 and obtained an occupancy certificate (OC) before the RERA Act took effect. Thus Phases 1 and 2 would be exempted from KRERA's jurisdiction.
KRERA pointed out that the masterplan from 2012 and the commencement certificate did not specify phase-wise development, and the developer had not conveyed an undivided share of common areas to the RWA. The developer has also not uploaded commencement certificates and approvals for each phase on the KRERA website. Thus, after carefully considering the case, the authority concluded that the entire project should be treated as ongoing, rather than being developed in phases.
Furthermore, certain amenities, vital for senior living, remained incomplete. Several amenities like an emergency push button/intercom, swimming pool, and a hobby room catering to senior living have not been provided yet.
KRERA emphasized that the purpose of collecting the corpus fund was to transfer it to the RWA upon project completion. The developer's argument that Phases I and II were completed before KRERA's establishment did not justify withholding the fund. Therefore, KRERA ordered the developer to transfer the entire corpus fund within 60 days of the order and complete the pending amenities within two months.
Additionally, KRERA clarified that an RWA registered under the Karnataka Societies Registration Act (KSRA) and KAOA could not be considered the registered body for collecting maintenance in a housing project. It cited previous Karnataka High Court orders preventing RWAs from registering under KSRA. In the case of stalled, abandoned, or delayed projects, allottees were required to be the registered entity to avail legal rights, as per KAOA.
This decision by KRERA underscores its commitment to ensuring transparency, fairness, and accountability in real estate developments, particularly in cases where developers fail to fulfil their obligations. It serves as a significant precedent for the protection of the rights and interests of homebuyers and RWAs in India.
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