The Karnataka Real Estate Regulatory Authority has delivered an important ruling stating that landowners and developers share equal responsibility under the RERA Act, and both are deemed promoters jointly liable for project obligations and compliance.
The ruling came in a dispute related to the Maangalya Park Avenue housing project in Bengaluru, where the authority dismissed a complaint filed by landowner BS Susheela Ramamurthy against the developer over project delays and alleged financial mismanagement.
K-RERA Rejects Complaint as Not Maintainable
In its order, K-RERA observed that the complainant herself qualified as a promoter under Section 2(zk) of the Real Estate (Regulation and Development) Act, 2016 because she had contributed land for the housing project.
The authority ruled:
Landowners involved in project development cannot seek relief against developers under RERA as if they are separate from the project
The complaint was therefore dismissed as not maintainable.
K-RERA stated:
“Both shall be deemed promoters and jointly liable for the functions and responsibilities specified under Section 2(zk) of the RERA Act.”
What the Dispute Was About
The complaint concerned alleged:
- Delay in project completion
- Misuse of funds collected from homebuyers
- Incomplete development work despite substantial collections
The landowner claimed that the project, initially launched by Pioneer Developers and later transferred to Maangalya Ventures Private Limited, remained incomplete even after the developer:
Collected money from buyers
Borrowed nearly ₹22 crore for construction
However, K-RERA held that since the landowner herself formed part of the promoter structure, she could not invoke RERA provisions against the developer in the same manner as a homebuyer.
Understanding Section 2(zk) of RERA
Under Section 2(zk), a promoter includes:
- A person constructing apartments for sale
- A person developing land into a real estate project
- Any assignee involved in project execution
This definition is broad and includes:
Builders, developers, landowners participating in development agreements
Therefore, where a landowner contributes land for development and shares project benefits, the law treats them as a co-promoter.
Significance of the Judgment
The ruling is important because it clarifies:
Landowners cannot distance themselves from project liabilities
RERA responsibilities are shared equally between developers and landowners
Internal disputes between co-promoters cannot be treated as buyer grievances under RERA
The judgment also reinforces accountability in joint development projects, which are common in urban real estate markets.
Homebuyers’ Forum Welcomes the Decision
Reacting to the order, Dhananjaya Padmanabhachar, Sanchalak of the Karnataka Home Buyers Forum, welcomed the ruling.
He stated that:
The order clearly establishes that landowners have equal obligations under RERA and cannot misuse the law in disputes with builders
Impact on Real Estate Sector
The ruling is expected to have a major impact on:
Joint development agreements (JDAs)
Landowner-builder partnerships
Dispute resolution in delayed projects
It sends a strong message that all entities involved in project promotion and development must remain accountable to buyers and regulatory norms.
Conclusion
The K-RERA order reinforces the principle that shared profits mean shared responsibility. By treating landowners and developers as equal promoters, the authority has clarified the legal position under RERA and strengthened accountability in the real estate sector.
The judgment may also discourage attempts by co-promoters to shift blame solely onto developers in cases involving delays or financial disputes.
