Karnataka RERA flags unregistered housing association; asks developer to transfer corpus fund

The RWA Sharadindu Senior Commune Owners Association has been registered under KAOA 1972 in 2022.

The Karnataka Real Estate Regulatory Authority (KRERA) has ordered the developer of a senior living project near Bengaluru to transfer the entire corpus fund of Rs 62.26 lakh to the Resident Welfare Association (RWA).

Additionally, the Authority has refused to consider an RWA registered under the Karnataka Societies Registration Act (KSRA), 1960, and the Karnataka Apartment Ownership Act (KAOA), 1972, to be the registered body for collecting maintenance of a housing project.

"The RWA Sharadindu Senior Commune Owners Association has been registered under KAOA 1972 in 2022. The Act stipulates that the promoter enables the formation of an association or cooperative society. Previous Karnataka High Court orders have prevented RWAs from being registered under KSRA 1960. In stalled, abandoned, or delayed projects, the allottees are required to be the registered entity to avail legal rights," the order dated October 10 said.

In this case, the RWA has approached the Authority for relief in the transfer of the entire corpus and found that the developer has failed to adhere to it.

The case

Related stories

Souptik Datta

Sub Editor|Moneycontrol

• 
  If illegal floors can't be razed, demolish the building, says Karnataka High Court
• 
  Karnataka RERA asks Ozone Group to repay homebuyer's home loan, clears all liabilities on buyer
• 
  India turns 2nd fastest-growing data center market in Asia-Pacific with 28% growth in capacity

In this case, the senior living township Sharadindu State III, located close to Mandya near Bengaluru, is being developed by Shree Senior Homes.

According to the facts presented, the developer maintained the project and provided services from 2016 until the formation of the RWA in 2022.

"The developer has charged Rs 4.5 per sq ft but also demanded 35 percent of the expenses between 2015 and 2022 in maintenance charges and services. Additionally, to date, the corpus fund has not been transferred to the RWA," they told KRERA.

The developer, on the other hand, claimed that the complaint is unsustainable as the homebuyers are from Phase 1 of the project and obtained an occupancy certificate (OC) before the RERA Act came into play and thus do not fall under the purview of the Authority. The RERA registration for the project is for Phase III only, it said.

KRERA order

After going through the facts in the case, KRERA concluded that the entire project should be termed ongoing instead of being developed in phases.

"The masterplan obtained in 2012 and the commencement certificate do not define the units to be developed phase-wise. The developer has not conveyed an undivided share of the common areas to the RWA. Hence, it shows that the complete project is an ongoing one," the Authority said.

Additionally, it added that several amenities like an emergency push button/intercom, swimming pool, and a hobby room catering to senior living have not been provided yet." The developer has also not uploaded commencement certificates and approvals for each phase on the KRERA website.

The Authority said that the purpose of collecting the corpus fund is to transfer it to the RWA after the completion of the project.

"The developer cannot withhold the fund just because Phases I and II were completed before KRERA came into place. Thus, the developer is ordered to transfer the entire corpus fund within 60 days of the order," the KRERA order said.

The Authority also directed the developer to complete the pending amenities within two months of the order.