Karnataka has introduced a new apartment law framework designed to close long-standing loopholes that allowed builders to retain land ownership while leaving large unpaid dues to apartment associations. The new law mandates automatic transfer of land ownership to registered apartment associations and establishes a special recovery mechanism for collecting long-pending dues from builders. This move aims to provide apartment owners with clearer legal protections and enforcement powers to resolve ownership and financial disputes.

Automatic Land Transfer to Associations

The new framework requires builders to automatically transfer land and common areas to registered apartment associations once certain milestones, such as 60% sales, are achieved. This eliminates builder discretion and indefinite delays in transferring ownership rights, addressing a fundamental ownership crisis in Karnataka’s apartment sector that lasted decades. The transfer provisions also apply retroactively to existing projects, giving current apartment owners rightful land ownership rights alongside their units.​

Special Recovery Mechanism for Builder Dues

A key feature of the law is the establishment of a Special Recovery Cell headed by deputy commissioners, empowered to recover unpaid dues from builders. This cell has the authority to attach builder properties and treat dues as land revenue arrears, ensuring strong enforcement. The mechanism targets over ₹724 crore in pending dues from more than 1,500 builders statewide, potentially resolving years of unpaid maintenance and compensation claims.​

Enhanced Legal and Regulatory Measures

The law aligns closely with the Real Estate Regulatory Authority (RERA) to ensure effective implementation and enforcement. It mandates digital maintenance of all project documents accessible to buyers and formalizes apartment association registration, granting them legal entity status. These measures increase transparency and accountability in apartment management, preventing builders from bypassing their obligations and protecting homeowners’ rights.​

Through this comprehensive new apartment law framework, Karnataka is strengthening property rights for apartment owners by securely transferring land ownership, enabling speedy recovery of builder dues, and ensuring better regulatory oversight across the state. This initiative is expected to end years of uncertainty and disputes in apartment ownership and management.

  Builder Dues, Builder Dues recovery, land transfer to owners