In one of the first such rulings, Karnataka RERA has ordered a developer to hand over the possession of common areas to the homebuyers' association in a south Bengaluru project.
In this case, the developer Mahendra Homes Pvt Ltd obtained the occupancy certificate and completed the project. However, KRERA pointed out in its order dated May 16 that according to the RERA Act, the developer should transfer the possession to the association.
The authority noted that as per section 17 of the RERA Act, the developer must hand over actual possession of the common amenities and other titles to the association of the allottees within three months of obtaining OC.
"The Act clearly states that the respondent must maintain the common areas until it is handed over to the association. Thus, the developer is ordered to hand over the possession of common areas within two months of the order date," KRERA said.
Moneycontrol has earlier reported a lack of clear state guidelines on the conveyance of properties had left several owners in a lurch. Experts say Karnataka developers fail to convey the common areas to the homebuyers -- thus retaining ownership in the property even after being sold.
The case
The authority noted that most of the allottees had moved into their apartments in Mahendra Aarna located in Anekal by 2019, however, the developer had failed to form an association.
Thus the homebuyers accused the developer of charging unreasonable maintenance costs, including threats of disconnecting essential services like electricity in case the homebuyers defaulted on the fines levied.
Among the other allegations against the developer in the project, homebuyers said the developer is providing electricity through a commercial line — without applying for a residential connection.
However, the developer contended that it had already completed the project and obtained the occupancy certificate. "They have formed an association of allottees according to the state real estate laws by executing the deed of declaration (DoD) in 2023," the order mentioned.
A DoD is a legal document used in the transfer of ownership of property from one person to another.
The order
The authority mentioned that the DoD has been executed so that the association is formed, according to the laws. However, a KRERA inspection in January 2024 found that several amenities remain incomplete — including a multi-purpose hall, eight borewells, lifts and car parking.
Additionally, the developer has not provided the individual Bangalore Electricity Supply Company Limited meters to each apartment as promised. Thus it ordered the developer to complete the promised amenities and provide the electricity meters.
A problem at large
While real estate experts in Bengaluru applauded the order for handing over possession of common areas to the association, they flagged several issues affecting homebuyers.
Dhananjaya Padmanabhachar, director, Karnataka Home Buyers Forum, said, “Today in Karnataka after the registration of the DoD, the builder exits the project without executing the registered conveyance deed. As the DoD mentions the undivided share of land, homebuyers are left under the impression that the land title has been transferred to them and they are the owners.”
Thus, without a conveyance of common areas, the land records at the land revenue department continue to reflect the names of the previous landowner, Moneycontrol had reported.
Additionally, Padmanabhachar pointed out, "The state government has 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. Unlike, the authority order in this case."
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