Insights from Nemmadi’s Landmark Seminar on Resident Welfare Associations
On December 6, 2025, Bangalore witnessed a groundbreaking RWA seminar that brought together legal experts, financial advisors, real estate professionals, and apartment association leaders to address the multifaceted challenges facing Resident Welfare Associations (RWAs) in Karnataka. The event, marking Nemmadi’s 10th anniversary in home inspection services, provided crucial insights for anyone involved in apartment management.
Nemmadi’s 10-Year Journey: A Decade of Service Excellence
A N Prakash, Managing Director of A N Prakash Construction Project Management Consultants, shared Nemmadi’s evolution from 6 home inspections in 2015 to over 12,500 inspections today—an inspiring story of how a vision to serve homeowners transformed into an industry-leading service.
Key Milestones:
- 2015: Started with 6 home inspections (first in Chennai, not Bangalore!)
- 2016: Launched Builder-to-Society Handover Audits (starting with Purva Midtown)
- 2017: Developed proprietary inspection app for standardized quality checks
- 2023: First RWA seminar due to overwhelming demand
- 2024: Published “HOTO” management handbook for residential associations
- 2025: 12,500+ home inspections, 50+ RWA handover audits, 500+ projects in Bangalore, and 500+ google reviews
Expanded Service Portfolio:
- Home pre-delivery inspections
- Builder-to-society handover audits
- Dampness root cause analysis (one of most demanded services)
- Society health checkups
- Total Quality Management for developers
- Franchises across India (Indore to Noida, Mumbai to Kochi)
A N Prakash’s key insight: “Dampness doesn’t have one medicine for all—each case needs proper diagnosis,” contrary to celebrity-endorsed quick fixes. The team’s dedication and 4.8+ Google rating reflect their commitment to quality and customer trust.
The Moral Compass: Justice Santosh Hegde’s Powerful Message
Former Supreme Court Justice and Karnataka Lokayukta Santosh Hegde set the tone with a stirring address on societal values:
The Disease of Greed: He traced India’s corruption trajectory through infamous scams:
- 1950s Jeep Scam: ₹52 lakhs
- Bofors: ₹64 crores
- Commonwealth Games: ₹70,000 crores
- 2G Scam: ₹1,76,000 crores
- Coal Scam: ₹1,86,000 crores
His prescription? Contentment—not as passive acceptance, but as legitimate ambition without greed. He emphasized that contentment doesn’t mean abandoning goals, but pursuing them through honest means.
RERA’s Vision: Rakesh Singh IAS on Accountability
Sri Rakesh Singh IAS (Retd.), former Chairman of Karnataka Real Estate Regulatory Authority (K-RERA) and distinguished administrator from the 1988 IAS batch, brought invaluable perspective from over 35 years of public service including roles as Additional Chief Secretary of Urban Development and Administrator of BBMP.
His Key Message: Balanced Perspective on Real Estate Disputes
Having reviewed countless cases at K-RERA, Singh shared a candid observation: “It becomes very difficult for me to decide who is more confused—the promoters or the allottees.”
The Reality He’s Witnessed:
- Promoters vanishing mid-project with investor money
- Projects sold where land itself didn’t exist
- Allottees making unreasonable demands (example: demanding specific WC brand models not even manufactured by Jaguar, despite agreement saying “Jaguar”)
- Society becoming increasingly self-centered: “Our entire framework is me, my family, my wealth, my things—and that is the end of it”
His Commitment to RWA Issues:
Singh acknowledged that aspects of RWA handover and management haven’t been adequately addressed in current RERA framework. He made a specific promise:
“I don’t think this aspect has found a place [in RERA discussions]. I promise that I’ll try to get it included. We meet all the chairmen once every 3 months. Next week we are meeting. This aspect will not only be included, it will be articulated the way you suggest.”
The Path Forward:
He emphasized that both promoters and allottees must act with honesty and trust. When both parties operate with integrity, delivering the right property becomes achievable. His call was for systemic improvements alongside individual responsibility—changes must be good, and they should begin immediately, not wait for distant dates.
His 35-year career marked by transparent, ethical, and citizen-focused governance brings hope that RERA will evolve to better protect homeowner interests and ensure smoother society formations and handovers.
What Made This RWA seminar Essential?
This comprehensive RWA seminar addressed critical gaps in apartment management knowledge—from legal registration confusion to criminal liability exposure. The sessions covered everything associations need to navigate Karnataka’s complex regulatory landscape.
Financial Compliance: Navigating the Tax Maze
Income Tax Clarity
CA Vishnu Moorthi H addressed a fundamental principle: The Mutuality Concept
What’s Exempt:
- Maintenance charges collected from members
- Penalties and late fees (from members)
- Sinking fund contributions
- Transfer fees
- Amenity charges
The Logic: When members pool money to spend collectively, it’s not “income” in the taxable sense—it’s essentially members spending their own money through a collective vehicle.
What’s Taxable:
- Rental income from non-members
- Interest income
- Advertisement revenue from external parties
- Income from commercial activities with outsiders
Critical Controversy: A recent civil court judgment suggested equal maintenance distribution regardless of apartment size. However, the Bombay High Court and Section 10 of KAOA clearly state: maintenance must be proportionate to undivided interest (UDS), not per-unit.
GST: The Ongoing Battle
CA Dayanand K explained the contentious GST landscape for RWAs:
The ₹7,500 Exemption: Associations can claim exemption for charges up to ₹7,500 per member per month IF:
- Registered as an unincorporated body or non-profit entity
- Charges are for sourcing (not self-providing) goods/services
- Used for common purposes
- It’s a residential complex (this excludes villa projects)
Major Debate: If monthly charges are ₹7,600, do you pay GST on:
- Full ₹7,600? (Revenue Department’s view)
- Only ₹100 above threshold? (Madras High Court’s view)
The 2025 Game-Changer: Section 7(1A) was introduced retrospectively (effective 2017) to counter Supreme Court judgments on mutuality. However, the Kerala High Court struck it down in April 2025 as unconstitutional, stating:
- Lacks legislative competence
- No justification for retrospective application
- Service definition doesn’t include “deemed supply”
What About Corpus Funds? Under GST, refundable deposits are exempt. But non-refundable corpus/sinking funds may attract GST, despite being capital in nature—because GST doesn’t distinguish between capital and revenue receipts.
Builder Handover: Your Technical and Legal Checklist
Essential Documents to Demand:
- Title documents (complete chain, not just summaries)
- Original sale deeds with proper UDS allocation
- Occupancy Certificate (and any modified sanction plans)
- Deed of Declaration with an accurate common area description
- All AMC contracts and equipment warranties
- As-built drawings (not just original plans)
Red Flags to Watch:
- Car parking discrepancies: Check that visitor and clubhouse parking haven’t been sold
- UDS inconsistencies: Ensure physical land matches documented area
- Unaccounted deviations: Modifications to sanction plans you weren’t informed about
- Missing service records: Lift, DG, STP maintenance histories
Advanced Maintenance Collection: Verify person-wise breakup. Don’t accept lump sums without understanding what’s collected vs. pending from individual units.
The Foundation: Understanding Your Association’s Legal Standing
The Registration Conundrum
One of the seminar’s most critical revelations was the ongoing confusion about proper RWA registration. Advocate Sneha Nagaraj, FCIArb, clarified the evolving legal landscape:
Current Valid Options in Karnataka:
- Karnataka Apartment Ownership Act, 1972 (KAOA)
- Karnataka Cooperative Societies Act, 1959
- Section 8 Companies (rarely used due to compliance burden)
What’s NOT Valid: The Karnataka High Court has consistently held that the Karnataka Societies Registration Act, 1960, is NOT appropriate for apartment associations, as maintaining common areas doesn’t fall within its objectives.
Critical Distinction for RERA-Era Projects:
- If you’re an owner: Register under KAOA 1972
- If you’re an allottee (haven’t received sale deed): Register under Karnataka Cooperative Societies Act 1959
This distinction was clarified in the 2025 Akhilesh Anand case, where the Karnataka High Court ruled that associations of allottees cannot register under KAOA since it applies only to owners.
Criminal Law: When Things Go Wrong
Advocate Aiyappa K.G. provided sobering insights into criminal liability:
The Swimming Pool Precedent: In a landmark case, office bearers were charged under Section 304A (death by negligence) when a child drowned. The court held that absence of a lifeguard constituted criminal negligence, even without intent to harm.
Key Criminal Exposures for Office Bearers:
- Fire safety violations: Non-functional systems despite renewal certificates
- Misappropriation of funds: Diversion to unauthorized purposes
- Environmental violations: Illegal borewells, STP non-compliance
- Defamation: WhatsApp group exchanges (yes, really)
The Ignorance Defense Doesn’t Work: “We didn’t know” is not a valid defense for statutory compliance failures. As office bearers, you’re expected to know the law.
When to Call 112: Don’t hesitate to involve police for:
- Drug consumption in premises
- Threats or assault
- Systematic rule violations by members
The Two Elements of Crime:
Aiyappa emphasized that for an act to be classified as a crime, two essential elements must be present:
- Mens Rea (guilty mind/criminal intention)
- Actus Reus (the criminal act itself)
He illustrated with an example: If someone accidentally slaps you on the street while intending to slap someone else (mistake of identity), though the act occurred, the criminal intention toward you was absent—offering a potential defense of mistake of law.
Practical Wisdom: The Panel Discussion
The RWA seminar’s closing panel discussion featured Uday Simha Prakash (CEO, Nemmadi) as moderator, with Ramesh Padmanabhan (BAF Governing Council Member), Krishna V (COO, Nemmadi), Sneha Nagaraj, FCIArb, (Partner, Frontline Law Partners), and Aiyappa K.G. (Partner, One Law Advocates,)
On Lack of Volunteers: Ramesh Padmanabhan (BAF) noted the irony: Associations have collective talent equivalent to mini-corporates, yet struggle to fill committee positions. His advice: Don’t wait for volunteers—lead by example. One committed person can make the difference.
On Fire Safety Gaps: Krishna V revealed that societies often have fire certificates despite non-functional systems—through official collusion. The solution: Third-party technical audits and taking ownership of safety regardless of compliance certificates.
On New vs. Old Bylaws: Sneha Nagaraj clarified: Modern online AGMs are permissible if you follow the same procedures your bylaws mandate—just on a virtual platform. Don’t try to circumvent quorum or voting rules via technology.
Looking Ahead: The Proposed New Act
Multiple speakers referenced an upcoming unified apartment association act for Karnataka:
What We Know:
- Aims to consolidate KAOA 1972 and cooperative society registrations
- Should provide a dedicated regulatory authority (currently absent)
- Will include “savings and repeal” clauses protecting existing registrations
- Draft not yet public
Don’t Panic: If enacted, existing associations won’t be left in limbo, the law will provide transition mechanisms, just like the Greater Bengaluru Authority Act handled BBMP transitions.
Key Takeaways for Every RWA
- Check Your Registration: If you’re under the 1960 Societies Act, you’re vulnerable to challenges. Plan migration to KAOA or KCSA.
- Document Everything: From maintenance calculations to fire safety checks—documentation is your defense against criminal and civil liability.
- Understand Your Tax Status: The mutuality concept protects most member contributions, but get it in writing from a CA familiar with RWAs.
- Builder Handover Isn’t Final: Don’t assume everything’s correct. Commission technical audits within your warranty period.
- Consider ADR Clauses: Update bylaws to mandate mediation before litigation—save lakhs and years.
- Fire Safety Is Non-Negotiable: With EVs proliferating, ensure you have lithium-ion fire extinguishers (not just standard ones) and CO2 detectors in basements.
- One Person Can Lead: Don’t wait for consensus or volunteers. If you see a problem, own the solution.
Conclusion: From Battles to Community
The RWA seminar’s overarching message, beautifully articulated by Justice Hegde and reinforced by Romesh Padmanabhan, was this: **Stop fighting small battles and build communities instead.
Yes, legal compliance matters. Yes, financial prudence is essential. Yes, criminal liability is real. But beyond all frameworks and regulations lies a simple truth: RWAs are about people living together. Every apartment complex has the talent of doctors, engineers, CAs, lawyers, and retired executives—enough expertise to run a small city.
The question isn’t whether we can manage our communities excellently. It’s whether we choose to—with contentment, collaboration, and commitment to something larger than our individual interests.