In a significant decision aimed at protecting the interests of apartment owners, the Karnataka Real Estate Regulatory Authority (K-RERA) has directed a builder to transfer key project assets, including the land khata, BESCOM electricity meters, water meters, corpus fund, balance escrow account, and maintenance accounts, to the duly authorised Association of Allottees within 90 days.
The order was passed while hearing a complaint filed by Yoganandan Jagannathan, a flat owner, against Smart Value Homes (Peenya Project) Private Limited and Tata Value Homes Ltd.
The ruling reinforces the responsibilities of developers towards homebuyers and highlights the importance of handing over project management and common assets to residents’ associations after completion of the project.
Complaint Filed Over Pending Amenities and Utility Issues
The complainant approached K-RERA alleging that the developer had failed to fulfil several commitments made at the time of purchase, including the provision of Cauvery water supply to the residential complex.
According to the complaint:
- The promoters had assured buyers that every apartment would receive Cauvery water connection.
- Even after more than six years from the date of purchase, no Cauvery water supply had been provided.
- The required infrastructure, including dedicated pipelines and overhead storage tanks, had not been installed.
- Deposits collected from flat owners towards Cauvery water connection remained unutilised.
The complainant also sought refund of ₹14,895, allegedly collected as a deposit for Cauvery water connection, along with 18% annual interest from October 18, 2017.
K-RERA Directs Transfer of Key Project Assets
After considering the matter, K-RERA directed the respondents to transfer several critical project-related assets and records to the authorised Association of Allottees within 90 days.
The assets to be transferred include:
- Land khata
- BESCOM electricity meters
- Water meters
- Corpus fund
- Balance amount lying in the escrow account
- Maintenance accounts and related financial records
The order aims to ensure that the residents’ association gains complete control over the administration and management of the housing project.
Developer Directed to Restore DG Power Supply
Apart from asset transfer, K-RERA also directed the builder to:
- Restore the diesel generator (DG) power supply to the complainant’s apartment.
- Complete all assured amenities in accordance with the terms and conditions contained in the agreements executed with homebuyers.
The authority emphasised that developers are obligated to honour commitments made during the sale process.
Residents Alleged Failure to Provide Promised Cauvery Water Supply
One of the major issues raised in the complaint related to the absence of the promised Cauvery water connection.
The complainant argued that although the builder had collected deposits from apartment purchasers for obtaining Cauvery water supply, no effective infrastructure had been created.
According to the allegations:
- Only two pipelines existed in the project.
- One pipeline supplied borewell water.
- The second supplied treated water for toilet use.
- No exclusive pipeline or storage facility for Cauvery water had been established.
As a result, residents continued to depend on alternative water sources despite paying connection charges.
Builder Claimed Association Already Managing the Project
In response, the developers informed K-RERA that the residents’ association had already been registered under both:
- The Karnataka Apartment Ownership Act, 1972, and
- The Karnataka Societies Registration Act, 1960.
The respondents contended that:
- Elections had been conducted fairly.
- The association had already taken over maintenance and facility management.
- The builder’s responsibility was limited to paying maintenance charges for unsold units.
- The dispute regarding DG power supply was between the association and the complainant and did not involve the promoter.
However, K-RERA proceeded to issue directions concerning restoration of services and transfer of project assets.
Significance of the K-RERA Order
The order is being viewed as an important step towards strengthening the rights of apartment owners and ensuring transparency in project handover.
By directing transfer of the khata, utility connections, corpus fund, escrow balance and maintenance records, K-RERA has reinforced the principle that developers must hand over control of completed projects to legally constituted associations.
The decision also highlights that promised amenities and infrastructure cannot remain incomplete indefinitely after possession has been granted.
Homebuyers’ Forum Welcomes the Decision
The order has been welcomed by Dhananjaya Padmanabhachar, Convenor of the Karnataka Home Buyers Forum.
According to him, the ruling represents one of the landmark decisions aimed at protecting the property and land rights of homebuyers in Karnataka.
The decision is expected to encourage greater accountability among developers and provide stronger legal backing for apartment owners seeking transfer of common assets and completion of promised facilities.
Conclusion
The K-RERA order against Smart Value Homes (Peenya Project) Private Limited and Tata Value Homes Ltd. underscores the regulator’s commitment to safeguarding homebuyers’ interests. By directing the transfer of essential project assets, restoration of utility services and completion of promised amenities, the authority has reaffirmed that developers remain accountable for fulfilling contractual obligations.
The ruling also serves as a reminder that apartment owners’ associations are entitled to receive control over common infrastructure and financial resources necessary for effective management of residential communities.
