Understanding RWA formation in apartment projects is crucial for residents seeking legal clarity and control over common amenities, especially when dealing with builder handover and non-compliant towers.
1. Under which laws can an RWA be registered in Karnataka?
In Karnataka, an RWA formation can be legally registered under two statutes:
- Karnataka Apartment Ownership Act (KAOA), 1972
- Karnataka Cooperative Societies Act
KAOA allows apartment owners to collectively manage and maintain their residential complex. However, for a valid registration under KAOA, a legally compliant Deed of Declaration (DOD) is mandatory. Crucially, this DOD must be signed by all owners of the apartments at the time of registration. If even one flat has been sold and the owner was not made a party to the DOD, the registration becomes questionable and challengeable in court.
Karnataka Cooperative Societies Act is a more practical choice where achieving 100% owner participation is not feasible. It is especially useful in phased projects or where the builder is still involved. This Act provides flexibility in forming associations and allows for staggered inclusion of buildings and members.
2. What if a Deed of Declaration (DOD) already exists but is potentially invalid?
If the DOD was executed after apartments were sold and without involving those owners as signatories, the DOD is legally defective. It cannot be considered binding on existing owners who were not made parties. In such a case, the only option is to start afresh by forming a new association. Importantly, this new association cannot continue under the flawed DOD; instead, it requires a new structure, new bylaws, and fresh registration either under the KAOA (with full owner participation) or the Cooperative Societies Act.
The old DOD does not hold legal water because ownership rights are already vested in the residents who were excluded from the original deed. Continuing under such a deed could invalidate the association’s decisions and open it to legal challenges. This situation often necessitates fresh RWA formation under a legally valid framework.
3. What are the benefits and drawbacks of tower-wise RWAs and an apex body?
A phased RWA formation model through tower-wise associations, supported by an apex body, can help in navigating complex multi-tower developments.
Benefits of tower-wise RWAs:
- Easier coordination among a smaller group of residents
- Faster decision-making at the tower level
- Flexibility in addressing tower-specific issues
Role of the apex body: An apex body coordinates decisions across towers and manages shared infrastructure such as access roads, security, DG sets, and water systems. It becomes essential in phased projects where all towers share common amenities but have different stages of readiness.
Drawbacks and complexities:
- Coordination between tower RWAs and apex body can become bureaucratic
- Incomplete towers (without OC) cannot legally be included, complicating budgeting and service allocation
- Tower F, for example, benefits from shared facilities but cannot contribute until it receives an OC. This creates a cost imbalance and governance ambiguity
4. What are the legal risks of including a block without an OC?
Including a block without an OC exposes the RWA to criminal liability. If an accident, fire, or structural failure occurs in that block, authorities may hold the RWA accountable—even if internal resolutions declare otherwise.
As the legal expert noted, such liability is non-transferable. “When the law becomes applicable, you will get locked”—indicating that disclaimers or board resolutions do not protect against statutory liability.
These risks underline why RWA formation should be deferred until all blocks have legal Occupancy Certificates in place.
Moreover, as per RERA, towers without an OC are not legally fit for occupation. Any form of governance over such blocks by the RWA may be interpreted as endorsing illegal occupation, further complicating the RWA’s legal standing.
5. Can the RWA collect maintenance from a block without an OC?
One of the most sensitive issues during RWA formation is whether maintenance can be collected from towers without an OC. No. Under RERA, maintenance charges cannot be collected from residents of a block that does not possess an OC. The rationale is simple: such buildings are not legally habitable, so imposing fees tied to habitation (like maintenance) is impermissible.
Attempting to collect maintenance may expose the RWA to legal disputes, and residents may rightfully refuse to pay. Even if those residents benefit from common services, the law does not allow billing them until the OC is secured.
The RWA may pass resolutions to avoid servicing the block, but unless this is explicitly communicated and enforced, they could still be seen as responsible—raising both financial and legal risks.
6. What happens if the RWA assumes maintenance of a tower without an OC?
Premature RWA formation involving towers without OC can blur the lines of liability between builder and association. By taking over maintenance of such a tower, the RWA implicitly assumes responsibility for its upkeep and condition. This includes issues stemming from latent defects, safety compliance, and service continuity.
Until an OC is issued and a formal handover occurs, all defects and liabilities rest with the builder. Premature RWA involvement dilutes this responsibility, weakening any claims residents may later make for repairs or corrections. It may also complicate legal action against the builder.
7. How should shared facilities be managed when one block lacks an OC?
Even if Tower is excluded from RWA maintenance, its residents still use common services—security, roads, lighting, etc. This creates a practical dilemma:
- Who bears the cost of these services?
- Can residents of Tower F be denied access?
This imbalance can trigger internal disputes. The best approach is to segregate services as much as possible and transparently document cost-sharing rules. Until legal inclusion is viable, service usage must be treated as a temporary provision with clear disclaimers.
These conflicts make it essential to clarify the scope of responsibilities at the time of RWA formation.
8. What are the risks around irregular power supply?
In the discussed case, a Tower appears to be powered through the builder’s commercial connection, but residents are charged residential rates. This is potentially illegal.
- If it’s not temporary power sanctioned by BESCOM, the connection may be unauthorised
- If the RWA is aware and does not explicitly disassociate, it may face regulatory scrutiny or be viewed as complicit
Legal counsel recommends that the RWA state in writing: “We have nothing to do with the power supply of that Tower.”
9. What if residents of the non-OC tower are not legally pursuing the OC?
The burden of obtaining the OC lies primarily with the residents of that tower. If they do not act, the RWA’s hands are tied.
Without collective resident action or legal pressure on the builder, the OC may be indefinitely delayed. This weakens the RWA’s leverage in negotiations, particularly when seeking inclusion terms or service cost recovery.
Resident participation and legal pressure are indispensable to support a successful and compliant RWA formation.
10. What should be done if the sanctioned plan appears to be altered?
If new blocks (e.g., X and Y) have been built over previously designated common areas, it could mean a violation of the original sanctioned plan. If this has resulted in a reduction of Undivided Share (UDS) for existing owners, it could be a serious legal breach.
Residents should:
- File RTIs with BBMP or BDA to access the original and modified plans
- Verify if approvals exist for the changes
- If found unauthorised, challenge the modifications legally to restore original rights or seek compensation
11. How is ownership of land and assets transferred?
One of the final steps of RWA formation involves ensuring the proper transfer of land title and movable assets from the builder.
- Land and common area rights are transferred via the Undivided Share (UDS) listed in each resident’s sale deed
- Movable assets (generators, gym equipment, pumps) require a formal transfer of title from builder to RWA
Without proper documentation, asset ownership may remain ambiguous and create operational or legal hurdles in future.
12. What is the legal advisor’s role in RWA Formation process?
A qualified legal expert can:
- Review the existing DOD and ownership documents
- Recommend the best act for registration based on feasibility
- Draft bylaws and new DODs if needed
- Represent the RWA in interactions with the builder or regulatory authorities
- Prepare indemnity clauses, disclaimers, and service-level resolutions
They will require:
- A clear mandate from residents
- Decision on whether a tower-wise or unified RWA structure is preferred
Only then can they quote a fee and proceed with formal support. Legal experts should be engaged early in the RWA formation process to minimise future disputes.
13. What is the recommended approach regarding a block without an OC?
The best approach is:
- Form the RWA only for legally compliant towers
- Exclude the non-OC block from membership and maintenance scope
- Pass formal resolutions stating non-involvement in its affairs
- Encourage residents of that block to pursue OC via RERA
- Include the block later in an apex body after legal compliance is achieved
This protects compliant towers from unnecessary exposure while allowing phased integration as issues are resolved.
Summary
RWA formation in an incomplete residential project is a legally sensitive and operationally complex task. Forming an RWA in an incomplete residential project is a legally sensitive and operationally complex task. Careful segregation of liabilities, structured documentation, and phased inclusion of non-compliant towers are essential strategies to protect resident interests. Legal guidance and collective resident involvement are critical to ensure compliance, accountability, and sustainability.
Disclaimer: This blog post is for informational purposes only and should not be considered legal or financial advice. Always consult certified professionals for specialised guidance.
RWA Handover-Takeover (HOTO) : Navigating Legal Complexities
External links where Nemmadi has been referenced for RWA HOTO