How a Registration Error is Preventing Conveyance of Land Titles to Homebuyers in Karnataka

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The Karnataka government has clarified that resident welfare associations cannot be registered under the Karnataka Apartment Ownership Act (KAOA), 1972.

In a Right to Information (RTI) reply dated January 6, 2023 accessed by Moneycontrol, the legal department of the state government said, “Karnataka Societies Registration Act (KSRA) 1960 and KAOA 1972 does not allow registrations of the RWAs.”

The document further points to Section 3(d), 6(6), 7, 24 and said, “It only mentions the structure, functioning and rights of the association. But nowhere does it mention registration of the association.”

Thus, in the view of the law department, there is no scope for registration of associations under KAOA or KSRA, it added.

Advocate Vittal BR, who practises at the high court, said, “The KAOA is only meant for making immovable assets as apartments heritable and transferable properties. Even a writ petition is pending at the high court challenging the grounds for registering RWAs under the 1972 Act.”

Problems with KAOA

This comes at a time when several developers in the state are pushing associations to be registered under KAOA, 1972.

Anil Kalgi, president of the Bangalore City Flat Owners’ Welfare Association (BCFOWA), said only about 16 RWAs have been registered under the Karnataka Co-operative Societies Act (KCSA), 1959, which is the correct Act for registration of associations.

In December 2022, a reply from the state government to the Registrar of Cooperative Societies (RCS) had clarified that RWAs can be registered under the KCSA, 1959, for the maintenance of common areas.

After about 40 years of enactment, the government has not notified rules for the competent authority under KAOA.

“Most developers will try to take advantage of the grey area and seek to register associations under the 1972 Act. However, in such cases, the homebuyers cannot approach the sub-registrar’s office in case of grievances with the association,” said Kalgi.

Shanthi (name changed on request), a former banker, had resigned as the president of a KAOA-registered RWA in a prominent Bengaluru housing project after several discrepancies.

“Initially, the developer had communicated that the association had to be registered under KAOA. Additionally, though the association said the bylaws have been registered, in reality, it was an unregistered document,” she said.

Dhananjaya Padmanabhachar, president of the Karnataka Homebuyers Forum, added that if associations are registered under KCSA, 1959, homebuyers can demand conveyance of the land title. “However, developers in Bengaluru are not executing the conveyance deed as mandated by the Karnataka Real Estate Regulatory Authority (KRERA). However, under KAOA, 1972 there are no legal grounds to challenge the same,” he added.

Sources at KRERA confirmed that most developers in the state have not executed the conveyance deed. “We are working on this matter and trying to talk to the developers,” a senior official told Moneycontrol.

Lack of awareness among homebuyers

Vittal said that a lack of awareness among the homebuyers has led to the lacuna.

Kalgi added that it is not under the jurisdiction of KRERA to ensure under which Act the RWAs are being registered.

“Now that we know both KAOA and KSRA do not allow registration of RWAs, homebuyers need to approach developers to register their RWA under KCSA, 1959,” he added.

Most importantly, said Vittal, RWAs should be registered under KCSA, 1959 so that the land title is conveyed to the association. “Otherwise, 30-40 years later, during redevelopment or demolition, anybody can come and claim the land,” he added.

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