Conned Owners & Buyers Unite to Fight Flat Builders, Who Abused KAOA Laws & Duped Buyers  

Conned Owners & Buyers Unite to Fight Flat Builders, Who Abused KAOA Laws & Duped Buyers


Conned Owners & Buyers Unite to Fight Flat Builders, Who Abused Karnataka Apartments Ownership Act 1972 (KAOA ) Laws and also Duped Buyers by not completing or handing over the apartments/flats as promised.

Mangaluru : Owning a apartment/flat is every one’s dream come true – but once they move into the flats they are left in surprises, like many of the facilities and amenities mentioned prior to buying the flat by the builder are missing- and many cases a few of the builders in Mangaluru City don’t even follow the Karnataka Apartments Ownership Act 1972 (KAOA ) Laws, and some other builders who have taken money in advance towards the flats either abscond or don’t complete or handover the flats as promised. This report by Team Mangalorean is unsolicited advice for all folks intending to buy an apartment/flat or are owners but facing problems with the builders since they have violated KAOA Act 1972.

Lately, the Smart City-Mangaluru has witnessed incredible growth in its real estate over the past few years having earned the distinction to house some of the best realty developers. However, the real estate revolution in the city is increasingly being marred by a rush of complaints and grievances from buyers against several property developers. There are complaints against almost every builder today because of their attitude of considering buyers as return-hungry investors who only care about the latest price of their property and not the performance of the builder.

The complaints are mainly related to possession of the property, extra demand of money, buildings not matching with the approved plan, maintenance-related issues, occupation certificates, builders have not followed the KAOA Act, completion certificate, bad construction quality, norms ignored by builders and non-availability of electric infrastructure among other issues. Major reasons for the buyers feeling betrayed and cheated is that the entire process of agreement signing while buying a flat in the national capital region (NCR) is a bit unclear. The builders usually sell the units to brokers who will only give you partial/superficial information like the number of units, apartments, etc initially until you sign the agreement.

They will not usually give information about the approval status and 70 – 80 percent of the people are not really aware of the right process. In nine out of 10 cases buyers while signing the documents tend to overlook certain aspects, go with the agreement and later feel betrayed when the builder violates various aspects. The builder /buyer agreement is almost always in favour of the builder and there is no regulatory body or efficient system to protect the rights of the buyer. As the defaults generally benefit the builder, they have no hesitation in doing so again and again- and the only way to fight against such builders is through complaints through forums/associations, and do whatever best could be done to get justice.

And today, nearly 35 owners and prospective flat owners in Mangaluru fed up and frustrated with their builders met at ‘Casa de Maria’, a residential house in Kadri, to discuss about the hardships and harassment faced through their lawyers in various issues, and the group was led by Ms Veena Prabhu, where she and her husband had faced a tough time at the hands of the builder and members of the flat association of Mauriksha Park apartments in Kodialbail-Mangaluru. The same salesman who speaks so sweet before he sells you the flat will care a damn for you once you have bought the flat. All those days of property appreciation are over. Never speculate. Never invest for appreciation.

Then there are the problems faced by the prospective buyers of a famed developer who didn’t handover flats as promised, even though he had taken partial or full payment- and the builder whom we are talking about in this report is of T3-Green City in Vamadapadav Mangaluru, where ten buyers out of the 60 flats which were supposed to come up at this location, also joined in the discussion during today’s meeting. Most of them had paid full amount of the flat they had booked, others had paid partial- and presently only a few apartments are completed but not to the prescribed standards- and also the Bank has sealed the property, leaving all these prospective buyers of flats in T3-Green City in Vamadapadau helpless, being totally cheated by the builder.

The initiative of Ms Veena Prabhu to form a group of interested individuals who had faced the brunt in various issues through their builders did receive an awesome response, who showed a keen interest and took part actively and seriously in today’s (Sunday, 7 July) meeting. Discussions were held during the meeting trying to identify alternate grievance redressal mechanisms under the ambit of law, looking for justice. These bevy of Owners and Buyers are becoming more and more aware, vigilant, informed and forthcoming in their fights against their respective builders, through such meetings, which is a good sign for other flat owners and buyers to follow in their footsteps and also fight against their builders if they face any problems.

The resource person for Sunday’s meeting was Anil Kalgi, an RTI activist from Bengaluru, and also the President of Bengaluru City Flat Owners Welfare Association, which is an organization of people who are actively participating in the implementation of various apartment laws through appropriate authorities. The points briefed by Anil Kalgi during today’s meeting were-

1. Apartment Association is not following the laws which are defined in KAOA 1972. One mandatory condition happens to be the submission of Deed of Declaration along with allied documents to the competent authority in Registrar of Co-operative Society. Hence most of the Association are functioning under the misconception of having Registered Association under 1972. Having DOD does not establish the right of the Association over the land or building and builders have never conveyed such things to any Deed of Declaration Association.

2. All are Undivided shares holders of the land in the Apartment Who is the owner ??????? here builder/landowner continues to be owner even after selling all flats that means that people stay as tenants being a part shareholder of land.

3. One of the mandatory thing in KOFA and RERA builders has to convey the property to the Association of allotees. No builder has done it or ever follow the mandatory rules and most of DOD Association behave like puppets of the builder and never get justice or take up such issue.

4. DOD association are not the corporate bodies and cannot claim right over the building. Merely registering bye-law copy at sub-registrar will not offer the status of society or association. For the formation of any society or association, there needs a regulatory authority. Sub-registrar is not the regulatory Authority until it is endorsed by the Registrar of Co-operative Society who is the competent authority, such DOD cannot function as Association.

5. So the need of the hour is the promotion of proper Association who can represent the entire property. Such Association can be possible only if builders follow Section 10 of KOFA that leads to the formation of Cooperative society of flat takers and they can get transferred the entire common area assets of the building in the name of the Co-operative Society that gives proper justice to flat owners.

6. Co-operative society – Formation of the cooperative society of flat takers will lead to proper and accountable management of the building and more transparency can be seen through the cooperative society. Flat taker co-op society the internal dispute resolution can be done without going to the judiciary. so for all practical purpose co-operative society is an association of the first choice for peaceful holding of apartments.

7. Act 16 of Karnataka ie Karnataka ownership flat act ( regulation , sales ,promotions, maintenance ,transfer act of 1972 ) which a regulatory and mandatory act to the builders which was enacted in 1975 till date all builders including government authority have ignored the KOFA act which actually offers total protection to the investors on the flats/apartments.

As per KOFA agreement for sale registration is mandatory as it creates a lien on the property. once the agreement for sale is registered the builder cannot play with the flat takers. As per KOFA every builder is liable to give every account of the money they have collected. Such returns need to be filed with deputy registrar of cooperative society which offers total protection to the investment. Any residue of the money left out builder becomes liable to transfer to the society of flat takers. As per KOFA builder is liable to form a cooperative society or company to monitor the construction activity.

The builder cannot change the building plan without the consent of the flat takers. The builder cannot hand over the building to the association of flat takers without obtaining the mandatory clearance including Completion and Occupancy certificate. Till he obtains builder will have to maintain it. After obtaining the completion and occupancy certificate builder will have to convey land title to the cooperative society or company as prescribed. We observe that no single builder has ever followed this mandatory regulation and every authority failed to implement regulation for sale of flats which has lead to perpetual chaos. even though the flat purchasers are flat owners but they are only undivided shareholders and land title remains with the landowner or builder.

To implement this act more effectively and to protect the interest of every flat owner Bangalore City Flat Owners Welfare Association (NGO) has taken up this issue and given representation to various government authorities and government of Karnataka for implementation of the Act. Even though some actions have been taken but is a long way to go. Association is contemplating to file a writ making the authorities responsibility to implement the KOFA and get ultimate Justice to the Apartment Owners.

BCFOWA is completely dedicated to educating rights and responsibilities of the flat owners on various apartment acts and regulatory acts like KOFA, KAOA, RERA, KSRA and KCSA, accountability of builders, the responsibility of government agencies and actively involved in an apartment in internal dispute resolution to live in healthy happy and accountable society. Interested Parties individually or collectively can join the said movement of BCFOWA to get protect the interest of Apartment Owners.

Speaking to Team Mangalorean Ms Veena Prabhu said, “I am overwhelmed with the response we received from these flat owners and buyers. The mounting number of complaints from flat owners and buyers against some promoters and developers has prompted all of us to demand stricter action against real estate players with a poor track record, and who abuse KAOA Act laws. The vast numbers of complaints are an indication of the level of awareness about the Act, but more awareness programmes or meetings are needed. Mangaluru will also come up with a similar objective and form an association to protect the undivided Mangaluru/DK district”.

In conclusion in my perspective, as plaints mount against some developers/builders, homeowners/buyers seek stricter action. The error of judgment on the builder’s part has galvanized a section of the buyers who are leading the charge against the builders at every possible forum and platform. While many people are still waiting for their dream house/apartment/flat, there is a ray of hope after the Real Estate Regulatory Authority (RERA) bill being passed by the Parliament. This bill is a harbinger of hope for all the clueless and helpless apartment buyers of India who fall for this huge scam, just because they decide to entrust their life’s savings into a big brand builder in order to own a dream house of their own, perhaps, someday!

Prayers and blessing from these active people under the strong leadership of Ms Veena Prabhu help to keep going on from strength to strength in their fight against the builders. I am sure there will be many more musketeers waiting in the shadows to take up the fight. Now is the time for them to come out and show to the world – what the common man is capable of doing! However, let me assure you that despite its various shortcomings, the Indian law is strong enough to nab criminal builders. It’s high time we stand up, get united and hit back hard – where it hurts them most!

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