Once An Apartment Is Subjected To Karnataka Apartment Ownership Act, Karnataka Ownership Flats Act Won't Apply: High Court

The Karnataka High Court has declared that "Once an Apartment, Building, Property is subjected to the provisions of Karnataka Apartment Ownership Act (KAOA) 1972, by execution of Declaration, Deed of Apartment and Bye-Laws, the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972, would stop being applicable." A single Judge of Justice Suraj Govindaraj, said "Both Acts would apply in different time periods, KOFA would be applicable until the Apartment is subjected to the provisions of KAOA, if the Apartment is not subjected to KAOA, KOFA would continue to apply. Once an Apartment, Building, Property is subjected to the provisions of KAOA by execution of Declaration Deed of Apartment and Bye Laws, KOFA would stop being applicable." Further, it said: "KAOA would only apply to an apartment where it is used for residential purposes. A flat or an apartment which is used for an office or showroom or shop or godown (and includes garage) cannot be subjected to KAOA and would always continue to be governed by KOFA." It added, "When an apartment is proposed to be constructed or under construction and agreements are entered into, KOFA would apply insofar as the relationship and/or dispute between the purchaser and the promoter. KOFA would continue to apply if the Apartment is not subjected to KAOA. Once an apartment is subjected to KAOA, KOFA would cease to apply and it is only the KAOA, Declaration, Deed of Apartment and bye-laws which would be applicable." The court also clarified that "In the event of an apartment being removed from the provisions of KAOA, in terms of Section 14 of KAOA, KOFA would come into operation". Further, it said, "Essentially, KAOA, Declaration Deed of Apartment and bye-laws would be the provisions under which the relationship between an apartment owner and Association of the Apartment, building, property, would be governed. KOFA would apply insofar as the relationship and/or dispute between the purchaser of an apartment and the Promoter and any defaults on the part of the Promoter. The other enactments like RERA would also be applicable." The court also noted, "Even when an Apartment is not subjected to KAOA and KOFA applies, the dispute and the relationship between the apartment owner and the Association would be governed in terms of the rules and regulations under the Co-operative Society, under which the said Association is registered or the terms of articles and memorandum of Association of companies, under which the said Association is registered." It added, "If the Association is formed under KOFA, registration of the Association would be required under the Karnataka Cooperative Societies Registration Act and/or the Companies Act, depending on whether it is a Co-operative Society or a Company which is to be registered." However, "In the event of a declaration, Deed of Apartment and Byelaws being executed and the Apartment, building, property is subjected to KAOA, the said documents would have to be registered before the jurisdictional Sub-Registrar and the same be informed to the Registrar of the Co-operative Societies." The court also stated that "There would be no requirement for registration of the Declaration, Deed of Apartment and/or bye-laws with the Registrar of the Co-operative Societies. If the property is subjected to KAOA. The proceedings if any would have to be filed before the Civil Court of competent jurisdiction." If a Co-operative Society or a Company is formed to manage the property, and the provisions of KOFA being applicable, the proceedings would have to be filed in terms of Section 13(5) before a Small Causes Court, where a Small Causes Court is established, in the absence thereof, before a Civil Court of competent jurisdiction. Moreover, the court said, "All the apartment owners are not required to sign and execute the Declaration, Deed of Apartment and bye-laws. The Promoter before registration of a sale deed can execute and register the Declaration, Deed of Apartment and bye-laws with the jurisdictional Sub-Registrar, being the owner of the Apartment, building and property. If there is a joint development agreement, the owner of the property would also have to join the execution of the registration of the above documents." It added, "Suffice it to say, it is only the persons or entities who have registered title in respect of the property who are required to execute and register the above documents." Further, it was clarified, "On the purchase of the property and registration of the sale deed, the purchaser or apartment taker would have to execute the necessary Declaration under Form B of KAOR agreeing to be bound by the said Declaration, Deed of Apartment and bye-laws. The Association, when formed, could always amend the same in terms of the provisions applicable thereto." Case Background: The...

Once An Apartment Is Subjected To Karnataka Apartment Ownership Act, Karnataka Ownership Flats Act Won't Apply: High Court

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"Once an Apartment, Building, Property is subjected to the provisions of KAOA by execution of Declaration Deed of Apartment and Bye-Laws, KOFA would stop being applicable."

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