Karnataka's Real Estate Regulatory Authority (RERA) has issued a significant ruling, ordering a developer to hand over the possession of common areas to the homeowners' association in a south Bengaluru project. The developer, Mahendra Homes Pvt Ltd, had obtained the occupancy certificate and completed the project, but failed to form an association as mandated by the RERA Act. The authority found that the developer charged unreasonable maintenance costs and threatened to disconnect essential services. Despite the execution of a Deed of Declaration, the developer did not complete several promised amenities and failed to provide individual electricity meters. RERA has now ordered the developer to complete the pending work and transfer the common areas to the association, addressing the persistent issues affecting homeowners in the state.
Karnataka's Real Estate Regulatory Authority (RERA) has issued a significant ruling, ordering a developer to hand over the possession of common areas to the homeowners' association in a south Bengaluru project.
In this case, the developer, Mahendra Homes Pvt Ltd, had obtained the occupancy certificate and completed the project. However, KRERA's order dated May 16 highlighted that as per the RERA Act, the developer should transfer the possession of common amenities to the association.
The authority noted that Section 17 of the RERA Act mandates the developer to hand over the actual possession of the common areas and other titles to the association of the allottees within three months of obtaining the occupancy certificate.
The lack of clear state guidelines on the conveyance of properties has often left several homeowners in a difficult situation. Experts say that Karnataka developers frequently fail to convey the common areas to the Homeowners, retaining ownership even after the properties have been sold.
In this case, the authority found that while most of the allottees had moved into their apartments in the Mahendra Aarna project by 2019, the developer had failed to form an association. As a result, the Homeowners accused the developer of charging unreasonable maintenance costs and even threatening to disconnect essential services like electricity if they defaulted on the fines levied.
The developer, however, contended that it had already completed the project, obtained the occupancy certificate, and formed an association of allottees by executing the deed of declaration (DoD) in 2023. A DoD is a legal document used in the transfer of property ownership.
Despite the DoD execution, a KRERA inspection in January 2024 revealed that several promised amenities, including a multi-purpose hall, eight borewells, lifts, and car parking, remained incomplete. Additionally, the developer had not provided the residential Bangalore Electricity Supply Company Limited meters to each apartment as promised. It still uses a commercial electricity connection.
Thus, KRERA has ordered the developer to complete the promised amenities and provide the electricity meters.
Real estate experts in Bengaluru welcomed the KRERA order for handing over the possession of common areas to the association. However, they also highlighted persistent issues affecting homeowners, such as the lack of conveyance of common areas, even after the registration of the DoD. This leaves the land records at the land revenue department still reflecting the names of the previous landowners, contrary to the homeowners' understanding of being the owners. The state government had also submitted its response in public interest litigation to the Karnataka High Court, dated 2021, that registration of the DoD does not amount to the registration of the association.
In conclusion, the RERA order in this case highlights the ongoing challenges faced by homeowners in Karnataka, where developers often fail to convey the common areas to the association, even after the properties have been sold. Despite the legal provisions, the lack of clear state guidelines has left many homeowners in a difficult situation, with the land records still reflecting the previous landowner's name, contrary to their understanding of ownership. This ruling underscores the need for stronger enforcement of RERA regulations and greater transparency in the real estate sector to protect the rights and interests of homeowners in the state.
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