Landmark KRERA Decision for L&T Realty Project in Hebbal, Bengaluru

In a landmark decision, the Karnataka Real Estate Regulatory Authority (KRERA) has mandated L&T Realty to transfer the ownership of common areas and the pre-maintenance corpus to the Resident Welfare Association (RWA) for the L&T Realty Raintree Boulevard project in Hebbal, Bengaluru. This ruling aims to ensure that homebuyers receive their rightful ownership and maintenance funds, marking a significant step towards transparency and fairness in the real estate sector.

Concerns Over Developers Withholding Land Shares
Legal experts have raised concerns that the issue of developers withholding rightful land shares from homebuyers could escalate into a larger problem within Karnataka's real estate industry if not addressed promptly. They emphasized the critical nature of executing the conveyance deed according to Section 17 of the RERA Act, which facilitates the transfer of the undivided share of land to all homebuyers outlined in the sale deed.

Raintree Boulevard Project Under Scrutiny
The L&T Realty Raintree Boulevard project, sprawling over 25 acres and comprising 2,242 apartments, including luxury units priced over Rs 4 crore, has become a focal point of this directive. Advocates for the homebuyers, led by Suhail Ahmed, argued that under the RERA Act's Section 17, it is incumbent upon the developer to form an association post-project completion and transfer the common areas and the amassed pre-maintenance funds to this association.

Karnataka's Real Estate Authority Mandates L&T Realty to Transfer Control of Common Spaces and Maintenance Funds to Homeowners Association

KRERA's Authority and Compensation Role
Despite identifying a violation in the sanctioned plan by L&T Realty, including discrepancies in the clubhouse's size, KRERA acknowledged its lack of authority to mandate building demolition. Instead, the body highlighted its role in ordering compensation and stressed the need for expanded powers to enforce such directives fully.

The Importance of Conveyance Deed Execution
Upon project completion, developers are required to execute a conveyance deed to the allottees, transferring land titles including undivided shares of interest, thereby making each homebuyer a shareholder in the property. However, the persistent avoidance by developers to execute these deeds has been a significant concern, allowing them to retain land titles while still charging buyers.

State-Specific RERA Rules and Confusion
The real estate sector's governance varies by state, with each having its own set of RERA rules under the central RERA Act's umbrella. The lack of specific mention of conveyance in the KRERA Rules has led to confusion, prompting multiple communications with KRERA officials from concerned parties like Dhananjaya Padmanabhachar, the president of the Karnataka Home Buyers Forum. A recent RTI response has revealed KRERA's silence on issuing any circular regarding this matter, underscoring the need for clearer regulations.