Think Your Builder's Job Ends At Possession? K-RERA Says Otherwise

When Bengaluru resident Yoganandan Jagannathan collected the keys to his apartment in 2017, he believed the hardest part of buying a home was finally behind him. Like most homebuyers, he expected that life would now settle into a routine inside a fully functional housing society.

Instead, years later, he found himself making repeated requests for basic facilities that, according to him, had been promised but never fully delivered.

The diesel generator (DG) power backup stopped working. Some common amenities remained unfinished. The builder, he alleged, had also failed to transfer key assets and maintenance-related documents to the residents' association.

After nearly nine years of living in the project and seeing little progress, Jagannathan knocked on the doors of the Karnataka Real Estate Regulatory Authority (K-RERA).

In a ruling that could resonate with thousands of apartment owners across the country, K-RERA has made it clear that a builder's job does not end with handing over the keys. If promised amenities are incomplete or common assets have not been transferred to residents, the developer can still be held accountable under the Real Estate (Regulation and Development) Act, 2016.

Jagannathan had purchased a flat in New Haven Bengaluru Phase I, a large residential project developed by Smart Value Homes (Peenya Project) Pvt. Ltd. and Tata Value Homes Ltd., for around Rs 40 lakh. He took possession of the apartment in February 2017. The township comprises nearly 1,800 apartments, with around 1,300 homes already sold.

According to his complaint, moving into the apartment did not mean the project was truly complete. He told the Authority that several promised facilities remained unavailable, the DG power backup had been discontinued, and the developer had not transferred the land records, utility meters, corpus fund and maintenance accounts to the apartment owners' association, leaving residents without full control over their own housing society.

Seeking relief, Jagannathan asked the Authority to direct the builder to restore the DG power supply, complete all pending amenities, hand over the common assets to the residents' association and refund certain maintenance-related charges.

After examining the case, K-RERA partly allowed the complaint.

The Authority directed the developer to restore the DG power supply to the complainant's apartment and complete all the amenities promised under the sale agreement. It also ordered the builder to transfer, within 90 days, the land khata, BESCOM electricity meters, water meters, corpus fund, escrow account balance and maintenance accounts to the authorised association of allottees.

However, the Authority rejected the complainant's claims seeking refunds of maintenance charges, municipal taxes and certain other monetary reliefs.

The order underlines an important principle of the RERA law: possession is not the same as completion. A developer cannot simply hand over apartments and walk away. The promises made in the brochure and sale agreement - whether they relate to essential services, common facilities or the eventual transfer of the project to the residents - must also be honoured.

For many homebuyers, especially those living in large housing projects where promised amenities continue to remain unfinished years after possession, the ruling offers reassurance that accepting the keys does not mean surrendering their legal rights. Under RERA, a home is considered complete not just when people move in, but when the builder delivers what was promised.

Speaking about the case, Shrusti Shah, Associate Partner, King Stubb & Kasiva, Advocates and Attorneys, said that the Karnataka RERA's order in Yoganandan Jagannathan v. Smart Value Homes (Peenya Project) Private Limited & Anr. marks a significant reaffirmation of the promoter's continuing obligations under the RERA Act. It has been laid down by the Authority that the responsibilities of the developer do not terminate upon the handing over of possession. Completion of amenities as promised needs to be carried out, and common areas, project assets, statutory connections, and funds collected from homebuyers need to be transferred to the Association of Allottees at the earliest.

“By recognising corpus and maintenance funds as amounts held in a fiduciary capacity rather than resources that can be retained or diverted by the promoter, the order strengthens financial accountability and enhances the rights of resident associations. The ruling is likely to serve as an important precedent for future RERA disputes by reinforcing that compliance under RERA is measured not merely by delivery of apartments, but by the fulfilment of all statutory and contractual commitments owed to homebuyers,” she added.