MC Exclusive: Karnataka clears confusion over registering resident welfare associations in Bengaluru

Karnataka housing department said that they have already received a clarification from the state legal department on registering RWAs under the Karnataka Apartment Ownership Act, 1972 (KAOA).

The Karnataka housing department has clarified that resident welfare associations (RWAs) in Bengaluru should be registered under the Karnataka Cooperative Societies Act, 1959 (KCSA), an official in the department told Moneycontrol.

The official also said that they have already received a clarification from the state legal department on registering RWAs under the Karnataka Apartment Ownership Act, 1972 (KAOA), which currently lacks a notified competent authority to address homebuyers' grievances.

"We are in the process of clarifying the competent authority with the cooperation department. We will also send a letter to all aggrieved homebuyers for the same issue," the official said.

Currently, the state has three acts for registering RWAs: KAOA, KCSA, and Karnataka Societies Registration Act, 1960 (KSRA). The Karnataka High Court has already held that RWAs cannot be registered under KSRA.
​Impact on homebuyers

According to Anil Kalgi, president of the Bangalore City Flat Owners' Welfare Association, more than 50 percent of associations in the state are "illegally" functioning under KAOA. Without a competent authority' to attend to homebuyers’ grievances in instances of alleged misappropriation of funds or other offences by the RWA, the association registration will not have a legal registration certificate, and it will not be a body corporate, a few of the homebuyers added.

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"And without a body corporate, Section 17 of the RERA Act, which speaks of transfer of land title to the association through execution of a conveyance deed is not possible," Dhananjaya Padmanabhachar, president of Karnataka Home Buyers Forum said.

In a right to information reply dated January 6, 2023, the legal department of the state government said, “Karnataka Societies Registration Act (KSRA) 1960 and KAOA 1972 does not allow registrations of the RWAs," Moneycontrol reported.

Thus rendered without legal registration, homebuyers have no forum for their grievances to be heard in cases of misappropriation of funds, for instance.

The posh Nikoo Homes apartment complex in north Bengaluru's Hebbal is a case in point. One homebuyer, who spoke on condition of anonymity, said, "Previously, we had found a major misappropriation of funds within our association that is registered under KAOA. However, when we approached the registrar and cooperation department, they said they cannot help as our association is not registered."

In the absence of a competent authority, homebuyers have started filing criminal cases against RWAs.

Prema Mistry, a resident of Prestige Tranquillity, a North Bengaluru project, recently lodged a first information report against the Prestige Tranquillity Apartment Owners Association (PTAOA) alleging criminal liabilities, including misappropriation of funds, environmental violation and unregistered association.

"PTAOA is registered under KAOA 1972 and is the only authorised body for maintaining the society. The state pollution control board team keeps visiting our facility and they seem to be satisfied with the quality. Thus again this allegation is baseless," the PTAOA team said, rebutting the charges.

However, this argument will not have legs once the state government makes it mandatory that RWAs be registered under KCSA.

Ongoing negotiations

Kalgi said that the state cannot form a new body corporate as it requires the intervention of the central government. "The legal department and cooperative societies are aware of the fact that the solution can be achieved by adding a chapter under the existing KCSA 1959," he said after meeting legal department officials.

This will enable the implementation of Section 17 of the Real Estate (Regulation and Development) Act and Section 11 of the Karnataka Ownership Flats Act which deals with conveyance, the actual transfer of title ownership.