Completion certificate issued by architect not valid: KRERA

In June 2022, a KRERA team inspected the site and found several inadequate amenities. The order did not specify which of them were deficient.

The Karnataka real estate regulator has held that a project will be deemed complete only if the competent authority issues a completion certificate.

Even if a project was completed before the Real Estate (Regulation and Development) Act was passed, a completion certificate issued by an architect is not valid proof of completion, the Karnataka Real Estate Regulatory Authority (KRERA) said on July 6 while passing an order in the matter of the Urbana Serene senior living project in Bengaluru, developed by the Ozone Group.

"We have consulted our legal advisors and we will be challenging the order," the developer said in a reply to the queries sent by Moneycontrol.

Advocates said the judgment sets a precedent in cases where developers deemed a project complete in Bengaluru with certification from architects.

The case

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Advocate Suryanarayana, who represented the homebuyers, said most owners of the Urbana Serene project are above 70 years of age.

According to documents submitted to KRERA, the project obtained a completion certificate from an architect in April 2017 and the occupancy certificate was issued by the local town planning authority in batches in April and August that year.

In June 2022, a KRERA team inspected the site and found several inadequate amenities. The order did not specify which of them were deficient.

Additionally, the developer told the regulator that the project was beyond the scope of KRERA registration because the occupation certificate and completion certificate were obtained before RERA was enacted. However, the resident welfare association filed a complaint alleging that the project was "ongoing."

Homebuyers' claims

Suryanarayana claimed that without forming the RWA to manage and maintain the project, the developer handed over control and management/maintenance of the Serene Urbana project to Columbia Pacific Communities (CPC).

"A corpus fund of about Rs 3.62 crore still remains with CPC. Today, seniors live without any fire clearance and faulty lifts. Even the sewage treatment plant is incomplete," he added.

The homebuyers also claimed that when the occupation certificate was obtained for 360 apartments in six blocks, construction in some blocks was not complete. Additionally, the occupation certificate does not indicate details about the Serene Urbana project, they said.

"Section 2 of the RERA Act makes it clear that the competent authority to issue the completion certificate is the town planning authority (in this case, the Kannamangala Gram Panchayat) and not the architect," the homebuyers claimed before KRERA.

"CPC will extend support and cooperate with the stakeholders. Since we are only service providers to the community and inherited a previously existing service contract, we have sought the intervention of the Karnataka High Court," Mohit Nirula, CEO of CPC, told Moneycontrol.

However, with regard to faulty STP and fire clearances, it is incorrect, Ozone Group added.

KRERA findings

KRERA noted that the completion certificate was issued by an independent architect and not the competent authority.

It also said sections of Form II and Form V of the completion certificate, as mandated by the Karnataka Panchayat Raj Act, were incomplete. KRERA referred to a Supreme Court judgment of 2017 and noted that incomplete forms can be termed as fraudulent and also intentional.

"Serene Urbana is not an ordinary apartment complex. It is a retirement home designed with special infrastructure and amenities for senior citizens. Hence, the stated incomplete development makes a greater difference for residents," KRERA said.

Serene Urbana is declared an ongoing project and the respondents are directed to register it under KRERA within two weeks, the regulator ordered.
Advocates said several developers had cited the Karnataka High Court’s decision in Provident Housing vs Karnataka Real Estate Authority of 2022, which said a project would be considered complete if a partial occupation certificate was obtained before RERA came into effect.

"However, in our case, we have clearly mentioned that the circumstances for the senior living project are different from the project mentioned in the HC order," Suryanarayana added.