BENGALURU: The Karnataka Real Estate Regulatory Authority (K-Rera) has issued a directive emphasizing that builders must insure common areas to avoid covering repair costs for disasters themselves.
In a recent ruling, K-Rera instructed the developers of an apartment complex on Kanakapura Road to provide all insurance documentation for the project within 30 days, partially addressing a complaint regarding a fire incident that damaged the Block 4 clubhouse.
The complaint arose from a fire on January 30, 2024, when resident Dhananjaya noticed smoke emanating from the clubhouse. The blaze destroyed the ladies’ washroom and sauna. Despite repeated requests for repair or restoration, no action was taken, according to Dhananjaya.
He highlighted that while all blocks were completed, the promoter failed to establish an association for the allottees or transfer the common areas, as mandated by Rera. Additionally, the absence of shared insurance details raised concerns about whether the clubhouse had any coverage.
Dhananjaya filed a complaint on May 4, 2024, urging restoration of the damaged clubhouse and the provision of all insurance documents to the association.
The builders dismissed these claims. They argued that the clubhouse and shared amenities were transferred to the apartment owners’ association on November 2, 2019, thus shifting responsibility for maintenance and safety to the association.
To support their argument, the builders referenced an inquiry by the association, indicating that the fire was caused by overheating of the sauna heater, not any structural or electrical issue. They noted that Dhananjaya did not include the association in the complaint despite its role in daily maintenance.
After reviewing the case, the tribunal upheld the inquiry’s findings and concluded that the promoter was not liable for repairs related to an incident occurring years after the handover.
However, the tribunal firmly addressed the issue of insurance noncompliance, noting that the promoter failed to submit any insurance documents, premium receipts, or records demonstrating the transfer of insurance benefits to the association—requirements specified under Section 16 of Rera.
The tribunal stated, “Insurance for common areas is mandatory under Rera,” asserting that residents should not bear losses that should have been insured.
On November 29, the panel, chaired by Rera chairman Rakesh Singh and member Gurijala Ravindranadha Reddy, ordered the builders to provide all insurance policies, proof of premium payment, and endorsements for the entire project, including the clubhouse and shared amenities.
This ruling serves as a clear message of accountability to residents. Complainant Dhananjaya remarked, “Rera confirms that promoters are obligated to insure common areas, and if they fail to do so, they will be held responsible for repairs in the event of a disaster.”
