A builder in Bengaluru has been asked to register one of its projects with the real estate regulator, which said it cannot claim exemption on this count merely because homes were handed over to buyers before laws came into force.
The Karnataka Real Estate Regulatory Authority (KRERA) held that projects completed before enactment of the Real Estate (Regulation and Development) Act in the state will be considered “ongoing” unless they have obtained a completion certificate (CC) and an occupancy certificate (OC) from the local authorities.
The regulator’s order came on a complaint filed by a homebuyer of the Shilpitha Splendour project alleging that the builder, Maithri Developers, did not obtain the CC and OC after completing construction of the project in 2013.
“Not being able to furnish documents like the completion certificate and occupancy certificate, the developer has failed to prove that the project was completed in 2013,” KRERA said in the order dated May 12.
Several developers in the city are said to have deemed a project complete and handed over apartments to homebuyers after executing a sale deed.
The case
Buyers of apartments in Shilpitha Splendour in Mahadevapura in north Bengaluru said despite several follow-ups since 2013, the developer failed to obtain the CC and OC from Bruhat Bengaluru Mahanagara Palike (BBMP), the local municipal authority. The resident welfare association filed a case before the state consumer forum in 2018, which is ongoing.
“The residents are under constant threats that the project lacks the no-objection certificates,” KRERA noted.
Maithri Developers said the complaint was not maintainable because the project did not come under the purview of the state RERA Act notified in June 2017.
“Since the project is not an ongoing one and was completed before KRERA was established, the complaint is liable to be rejected,” the developer told KRERA.
The court found that the developer failed to submit the OC, CC and clearance certificates from BBMP and the state pollution control board to prove the project was completed in the same year as the execution of the sale deeds.
“Mere execution of sales deed and handing over possession to homebuyers is not sufficient and does not mean that the project is complete,” the regulator said, adding that this establishes that the project is “ongoing” and needs to be registered under the state regulatory authority.
The court ordered the developer the obtain the required documents from the competent authority and register the project under the regulator.
Responses to questions sent to Maithri Developers are awaited.
The problem at large
Legal experts said a CC is issued after an architect certifies a project as complete. Many times, certificates are withheld due to deviations from approved plans.
"Several homebuyers in Bengaluru move into apartments without valid OC or CC,” said Vittal BR, an advocate who has fought consumer cases on similar issues. “Builders capitalise on the situation of the homebuyers who cannot stay in a rented house and pay the EMI for the apartments.”
According to a survey by the BBMP last year, about 200,000 buildings in Bengaluru have deviated from sanctioned plans. In 2021, another BBMP survey revealed that more than 85 percent of new buildings constructed in 2020 and 2021 had violated building bylaws.
Data from BBMP showed that it issued 86 OCs in 2019-20. In 2022-23, it issued 54 certificates for commercial and residential buildings.
"After the handover of possession, the developers need to execute a conveyance deed to transfer the undivided share of interest of common areas to the RWA. Only then can they apply for OC and CC," said Dhananjaya Padmanabhachar, convenor of the Karnataka Home Buyers Forum.
The conveyance deed and OC are among documents required to apply for completion of a project, according to information on the KRERA website.
Without an OC, homebuyers cannot get water and sewage connections or fire safety clearances for a building.
"Homebuyers who move in without OC will face several challenges as the local planning authority will always say they did not give clearance for occupancy. In such cases, they will have to move the courts for relief," Vittal added.
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