Homebuyers in Karnataka are facing significant challenges due to the lack of a clear project closure policy and definitive property ownership laws. They argue that merely obtaining an Occupancy Certificate (OC) does not indicate project completion and are urging the Karnataka Real Estate Regulatory Authority (KRERA) to follow the Odisha RERA model by introducing a comprehensive project closure framework.
Additionally, homebuyers have called on the government to replace the Karnataka Apartment Ownership Act (KAOA) with a more structured and updated law that clearly defines the rights and responsibilities of apartment owners and associations. However, the process has been delayed, leaving many buyers in legal limbo.
Homebuyers Demand KRERA to Follow Odisha RERA’s Project Closure Model
A recent Right to Information (RTI) response confirms that Karnataka RERA is considering a project closure policy. Homebuyers had formally requested KRERA to adopt a model similar to the one implemented by Odisha RERA in July 2024.
According to homebuyers, obtaining an OC does not mark the end of the project. Builders must:
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Facilitate the formation of a Residents’ Association
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Transfer title deeds and land records to the association
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Execute the conveyance deed for common areas
However, KRERA has yet to release official project closure guidelines to ensure that developers fulfill their obligations before a project is considered complete.
Odisha RERA’s Project Closure Guidelines: A Model for Karnataka?
Homebuyers have cited Odisha RERA’s project closure policy as an ideal framework for Karnataka. Under Odisha’s July 2024 notification, developers must submit several key documents to the regulatory authority before a project can be officially closed:
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Completion Certificate (CC) – Issued by the Competent Authority for plotted developments.
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Occupancy Certificate (OC) – Required for apartment and housing projects.
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Formation of the Association of Allottees – Ensuring that buyers have a legal entity representing their interests.
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Transfer of Common Areas – A legally registered deed transferring the project’s common areas and facilities to the Association.
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Transfer of Corpus Fund – Evidence that the developer has transferred the maintenance fund to the Association.
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Five-Year Security Fund Retention – As per Section 14(3) of the RERA Act, 70% of the project funds held in the designated RERA account will remain secured for five years to cover any structural defect rectifications.
These requirements ensure that homebuyers receive their legal ownership rights and that developers are held accountable for project completion beyond just obtaining an OC.
Issues with Conveyance of Land and Formation of RWAs in Karnataka
Section 17 of the RERA Act mandates that once a project is completed as per the approved plan, the developer must execute a conveyance deed, transferring the land and common areas to the Association of Allottees.
However, homebuyers claim that not a single project under KRERA has followed this rule. Developers in Karnataka often retain ownership of the land, even after selling apartments, continuing to charge residents for the same property while avoiding legal transfer.
Lack of Clarity in Karnataka’s Laws for Registering RWAs
Another critical issue is the lack of clarity on the governing law for Resident Welfare Association (RWA) registrations in Karnataka.
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The Karnataka High Court has ruled that the Karnataka Societies Registration Act (KSRA), 1960 cannot be used for RWA registration.
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Homebuyers are now uncertain whether to follow the Karnataka Apartment Ownership Act (KAOA), 1972 or the Karnataka Co-operative Societies Act (KCSA), 1959.
Legal experts argue that the state government must issue a clear notification specifying the correct legislation for RWA registrations to prevent confusion and legal disputes.
Conclusion: Urgent Need for Project Closure and Ownership Reforms
Homebuyers in Karnataka continue to struggle due to the absence of a project closure framework and unclear apartment ownership laws. The Odisha RERA model provides a well-defined process that ensures projects are fully completed before being declared closed, protecting buyers’ rights and financial interests.
To address these concerns, the Karnataka government must:
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Introduce a Project Closure Policy similar to Odisha RERA, ensuring that projects are truly complete before closure.
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Mandate Transfer of Common Areas and Titles to Resident Welfare Associations.
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Clarify the Governing Law for RWAs to enable proper legal registration and management.
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Strengthen KRERA’s Implementation of Section 17 of the RERA Act to prevent developers from avoiding land conveyance obligations.
Without these reforms, homebuyers will continue to face uncertainty and legal complications in securing their property rights in Karnataka.
