Receipt of OC alone does not mark project completion: Bengaluru homebuyers urge KRERA to adopt project closure policy
Bengaluru homebuyers are pressing for a project closure policy, arguing that a occupancy certificate is insufficient for confirming project completion
Bengaluru homebuyers say they are facing challenges due to the lack of a clear project closure policy and definitive ownership laws. They contend that merely obtaining an occupancy certificate (OC) does not signify project completion and have urged Karnataka RERA to follow Odisha RERA’s example by notifying project closure norms.
Additionally, they are calling on the government to expedite the replacement of the Karnataka Apartment Ownership Act (KAOA) with a more comprehensive law, which has been delayed.
A Right to Information (RTI) response accessed by HT.com, dated March 3, 2025, revealed that RERA Karnataka is actively considering a project closure policy. Homebuyers had approached KRERA last year, urging it to adopt a model similar to Odisha RERA’s.
Even after receiving the occupancy certificate, the builder remains obligated to facilitate the formation of the residents’ association, transfer the title deeds and land records to the association, and initiate the conveyance deeds. "Obtaining an OC does not mark the end of the project," said homebuyers.
"Karnataka RERA has yet to release project closure guidelines to ensure promoters complete their projects. In August 2024, the Karnataka Home Buyers Forum submitted a request to the RERA chairman and secretary, citing Odisha RERA's project closure policy as a reference. However, even after seven months, the application remains pending. The authority recently responded, stating that the matter is still under discussion," Dhananjaya Padmanabhachar, director of Karnataka Home Buyers Forum, told HT.com.
Bengaluru homebuyers urge KRERA to adopt project closure policy similar to Odisha's
Homebuyers said the Odisha RERA notification, dated July 2024, outlines the key documents that promoters must submit to the RERA Authority before a project can be declared complete.
These include a Completion Certificate for plotted developments issued by the Competent Authority and an Occupancy Certificate for apartment and housing projects. Additionally, promoters must ensure the formation of an Association of Allottees and provide an undertaking that all sanctioned layout plans and common areas have been handed over to the association. They must also submit a copy of the deed transferring the project's common areas and facilities, along with proof of transferring any Corpus Fund to the association for maintenance purposes, it showed.
The notification further states that once a project is fully completed, the funds in the designated 70% RERA account will be retained as security for five years to cover any structural defect rectifications, as per Section 14(3) of the RERA Act.
"Only after fulfilling these requirements will the project be officially declared closed in Odisha. Not a single project registered under RERA in Karnataka has transferred the common area title to the registered Association of Allottees, as required under Section 17 of the RERA Act. We urge the Karnataka RERA to establish a similar Project Closure Policy and issue a public notification," Padmanabhachar added.
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This is what legal experts have to say
According to Section 17 of the RERA Act, once a project is completed according to the approved plan, the developer must execute a conveyance deed transferring the land to the allottees.
Lawyer Abhilash Naik explains that when a buyer purchases an apartment, the builder must transfer the undivided share of land to a resident welfare association, making each homebuyer a shareholder.
However, advocates point out that developers in Karnataka often evade this legal requirement, retaining land ownership while still charging buyers for it.
In Karnataka, the state government is also yet to specify the governing law for registering Resident Welfare Associations (RWAs). The Karnataka High Court has ruled out the Karnataka Societies Registration Act (KSCA) 1960 as an option, leaving homebuyers uncertain whether to follow the Karnataka Apartment Ownership Act, 1972 (KAOA) or the Karnataka Co-operative Societies Act, 1959 (KCSA), said advocate Akash Bantia.
He emphasized the need for the state government to notify the competent authority and clarify the correct Act for RWA registrations.
