Bengaluru: In a significant move to protect homebuyers, the Karnataka Real Estate Regulatory Authority (RERA) tribunal has ruled that real estate developers must mandatorily hand over Section 16 insurance documents to apartment buyers. These documents cover construction quality and structural safety of residential projects. Failure to comply will make builders financially liable for any defect repairs.

Tribunal Clarifies Developer Responsibility

The tribunal observed that Section 16 of the Real Estate (Regulation and Development) Act, 2016, clearly places responsibility on developers to insure the project against structural defects and construction-related risks. Builders are now required to submit valid insurance certificates at the time of possession.

According to the ruling, withholding or failing to provide these documents will be treated as a violation of statutory obligations under the Act.

Financial Liability for Defect Repairs

The tribunal further stated that if builders do not furnish Section 16 insurance coverage, they cannot escape liability for rectifying defects in construction. Any expenses incurred for structural repairs or quality-related issues will have to be borne by the developer.

This decision is expected to discourage negligence in construction practices and promote accountability among real estate firms.

Boost to Homebuyer Protection

Legal experts believe the order strengthens the position of homebuyers in disputes related to construction defects. Buyers can now legally demand proof of insurance coverage as part of the handover process and approach RERA authorities if developers fail to comply.

The ruling also empowers resident welfare associations (RWAs) to seek compensation or corrective action in cases where projects lack proper insurance documentation.

Impact on Real Estate Sector

Industry observers say the ruling will push developers to maintain stricter compliance with RERA norms and improve transparency in project documentation. While some builders may face increased compliance costs, the decision is expected to raise overall construction standards and buyer confidence in the housing market.

What Homebuyers Should Do

Homebuyers have been advised to check whether their builder has provided Section 16 insurance documents along with occupancy and completion certificates. In case of non-compliance, buyers can file complaints before Karnataka RERA seeking directions and compensation.

  Karnataka Real Estate Regulatory Authority, Real Estate (Regulation and Development) Act