The Karnataka Real Estate Regulatory Authority (K-RERA) has directed a developer to constitute and register an association of allottees before the competent authority within 60 days, in accordance with applicable law. The authority also directed the developer to fulfil its statutory obligations concerning the transfer of common areas and the corresponding rights and title to the association of allottees.
The order was passed following a complaint filed by Swetha Rangaswamy, a flat purchaser in a project developed by Eco Life Developers. The complainant alleged that despite the completion of the apartments and the handing over of possession to the allottees, the developer had failed to facilitate the registration of the association and transfer the common areas in accordance with the provisions of the Real Estate (Regulation and Development) Act, 2016.
Flat Purchaser Approaches K-RERA Over Non-Registration of Association
Swetha Rangaswamy approached K-RERA after she and other apartment owners allegedly faced difficulties in obtaining the necessary assistance from the developer for constituting and registering their association.
According to the complaint, the allottees had been waiting for the respondents to facilitate the formation and registration of an association before the competent authority. They also sought the transfer of the common areas and the corresponding rights and title in favour of the association, in accordance with the applicable legal provisions.
The complainant contended that although the apartments had been completed and possession had been handed over, the respondents had allegedly failed to fulfil these statutory obligations.
The issue raised an important question concerning the responsibilities of developers after handing over possession of apartments to homebuyers, particularly with respect to the formal establishment of an association and the transfer of common areas.
Developer Allegedly Failed to Provide Registration Certificate
The complainant further alleged that when the allottees requested documentary proof of the association’s registration, the respondents claimed that an association had already been registered under the Karnataka Apartment Ownership Act, 1972.
However, according to the complaint, the respondents failed to furnish a Certificate of Registration issued by the competent authority to substantiate their claim.
The absence of the requested documentary proof reportedly left the apartment owners uncertain about the formal registration status of their association and the completion of the relevant legal formalities.
K-RERA Invokes Sections 11(4)(f) and 17 of RERA Act, 2016
In its order, K-RERA directed the respondents to fulfil their statutory obligations under Sections 11(4)(f) and 17 of the Real Estate (Regulation and Development) Act, 2016.
Section 11(4)(f) addresses the promoter’s obligation to assist in the formation of an association or society of allottees, as applicable under local laws, and to comply with the relevant legal requirements.
Section 17 deals with the transfer of title and the conveyance of the promoter’s right, title and interest in the building and land to the association of allottees or the competent authority, as applicable. It also addresses the handover of necessary documents and plans in accordance with the statutory framework.
By directing compliance with these provisions, K-RERA emphasised the need for the developer to complete the outstanding statutory formalities concerning the association and the transfer of common areas.
Developer Directed to Complete Formalities Within 60 Days
K-RERA directed the developer to constitute and register the association of allottees before the competent authority within 60 days, in accordance with applicable law.
The respondents were also directed to take the necessary steps within their statutory obligations to complete any outstanding formalities.
Further, the authority directed the respondents to execute the requisite conveyance or other transfer documents relating to the common areas and the undivided proportionate title in favour of the association of allottees or the competent authority, as applicable.
The directions seek to ensure that the legal and administrative formalities relating to the association and the transfer of common areas are completed in accordance with the applicable statutory framework.
Implications for Homebuyers and Apartment Associations
The K-RERA order highlights the importance of completing statutory formalities even after possession of apartments has been handed over to purchasers.
For homebuyers, the formation and registration of an association provide a formal framework for collectively managing the affairs of the apartment complex, subject to the applicable law. The transfer of common areas and the corresponding rights and title is also important for establishing the association’s legal position and facilitating the management of shared facilities.
The ruling serves as a reminder that handing over possession of individual apartments does not, by itself, establish that all statutory obligations relating to the association and the transfer of common areas have been completed.
Developers must comply with the applicable legal requirements concerning the formation of the association, registration before the competent authority and execution of the necessary transfer documents.
For apartment owners facing similar difficulties, maintaining written records of communications with the developer and seeking documentary proof of registration and transfer formalities may help clarify the status of the association and the outstanding obligations.
Conclusion
The K-RERA order reinforces the importance of compliance with the statutory responsibilities of promoters under the RERA Act, 2016. By directing the developer to register the association of allottees within 60 days and complete the requisite transfer formalities, the authority has highlighted the need to protect the collective interests of apartment owners and ensure compliance with applicable law.
