Karnataka Real Estate Regulatory Authority (KRERA) has held that developers will be responsible for maintaining the common areas till the time an association of allottees has been formed and the occupancy certificate (OC) is obtained.
KRERA passed the interim order in connection with a project, Sobha City Casa Paradiso 4, where only one out of the 17 blocks is registered under KRERA, homebuyers claim.
"The developer is liable for the maintenance of the common areas and civic facilities in the project till the formation of resident welfare association (RWA) and OC has been obtained," KRERA said while passing the order on May 2.
On failure of the builder to obtain an OC and formation of RWA, the homebuyers are entitled to receive information from the developer regarding the advance maintenance charges collected by the company, it said.
In January, the local municipal body Bruhat Bengaluru Mahanagara Palike (BBMP) cancelled about 2,000 OCs following an allegation that the builder had provided fake no-objection certificates (NOCs).
Homebuyers' long wait
KRERA noted that the developer had promised to complete the project by December 2018. However, the project does not have an association of allottees today, and also the OC has not been received.
Ankit Ray (name changed), one of the homebuyers, has paid Rs 2 crore for an apartment in the project. "I was supposed to move in during 2018. However, I decided to wait till the OC was obtained. I took possession only in 2020 after the OC was issued," he added.
However, KRERA noted that, in January 2023, BBMP revoked OCs issued in 2018, 2019, and 2020 on the ground that NOCs and state fire clearance certificates were fake.
"This is the first interim order since our complaint in 2019. About 260 homebuyers in the project have paid Rs 2 lakh each in advance maintenance. And today, we continue to stay without any clearance, unsure about the future," Ray added.
The homebuyers moved KRERA seeking directions for the developer to maintain the project at its cost and not to charge allottees at a later date after the OC has been obtained.
The order also said it is the developer's responsibility to provide for and maintain the essential services till an association is formed and the maintenance of the project is taken over by it. The sale deed executed by the developer mentioned the formation of an association and asked the homebuyers to pay maintenance charges for common areas and each block.
On failure to complete its duties, the homebuyers are entitled to receive from the developer details of the bank accounts related to the advance maintenance charges collected and spent.
"To maintain the complaint, the developer is directed to make available accounts in respect of the advance maintenance charges claimed and spent within 15 days of the order," KRERA said.
However, homebuyers claim that the developer has not made the accounts available almost 20 days after the order.
"We have filed an appeal challenging the interim order on May 19, 2023. The next date of hearing is scheduled on May 30. It may also be noted that Sobha Limited has handed over the maintenance of Casa Paradiso 3 and 4 on March 31, 2021. Thereafter, their corpus was finally handed over on February 24, 2023," the company spokesperson said.
Advocate Vittal BR said that in most of the residential projects in Bengaluru, homebuyers have moved in without an OC. "Last year, Karnataka Electricity Regulatory Commission amended the conditions of supply of electricity. Today, it can be supplied to a project without OC, and most developers make use of this situation," he added.
However, he also pointed out that Section 11 of the Central RERA Act says that the promoter is liable to maintain the project at a reliable cost, including water, electricity, and maintenance charges until the conveyance of the title of the land is made to the association.
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