The Karnataka Ownership Flats (Regulation Of The Promotion Of

Construction Sale, Management And Transfer) Rules 19751

(As amended by S.O. 887, dated 19-3-1975) GSR 77.

Whereas, the draft of the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Rules, 1972; which the Government of Karnataka proposes to make in exercise
of the powers conferred by clauses of sub-section (I) of 16 of the Karnataka Ownership Flats (Regulation
of the Promotion of construction, Sale, Management and Transfer) Act, 1972 (Karnataka Act 16 of 1973)
was published in Notification No. DPC 334 DHE 73(1), dated 23rd October, 1974; inviting objections and
suggestions from all the persons likely be affected thereby on or before 25th November, 1974;

And whereas, the said Gazette was made available to the public on 23rd October 1974;

And whereas, no objections or suggestions have been received on the said draft by the State Government;

Now, therefore, in exercise of the powers conferred by section 16 of the Karnataka Ownership Flats
(Regulation of Promotion of Construction, Sale. Management and Transfer) Act, 1972 (Karnataka Act 16
of 1973), the Government of Karnataka hereby makes the following rules, namely-

1. Short title and commencement

(i) These rules shall be called the Karnataka Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Rules, 1975.

(ii) They shall come into force at once

2. Definitions
In these rules, unless the context otherwise requires.—

(a) “Act” means the Karnataka Ownership Flats (Regulation of Promotion of Construction, Sale.
Management and Transfer) Act, 1972 (Karnataka Act 16 of 1973).

(b) “Form” means a form appended to these rules.

(c) “Section” means section of the Act.

3. Manner of making disclosure

(1) A promoter for the purposes of making disclosure of any document referred to in Section 3 or
prescribe thereunder shall produce the original of such document before the person intending to take
or taking one or more flats or apartments. Such person may ask the promoter all relevant questions for
seeking further information, or clarification in respect of any document or matter required to be
disclosed, produced or furnished by or under the provisions of the Act; and the promoter shall be
legally bound to answer all such questions to the best of his knowledge and belief.

(2) The promoter while making disclosure of the outgoings as required by clause (j) of sub-section (2) of
Section 3 shall state the basis on which an estimated figures or other information is given.

1 Published in Karnataka Gazette, extraordinary, dated 10-3-1975 vide notification GSR 77 (No. FD 27 KHB 75, dated 6-3-
1975
4. True copies of certain documents to be given
A promoter shall, on demand and payment of a reasonable charge therefor, give to any person intending to
take or taking one or more flats or apartments true copies of the following documents, namely:—

(a) All documents of title relating to the land on which the flats or apartments are constructed, or to be
constructed which are in the promoter’s possession or power;

(b) The certificate by an advocate referred to in clause (a) of section (2) of section 3;

(c) All documents relating to encumbrances (if any) on such land including any right, title, interest or
claim of any party, in or over such land;

(d) The plans and specifications of the building built or to be built on the land referred to in clause (c) of
sub-section (2) of section 3;

(e) A list of fixtures, fittings and amenities (including the provision for one or more lifts) provided or to
be provided or the flat or apartment;

(f) The list referred to in clause (g) of sub-section (2) of section 3;

(g) A list of all outgoings referred to in clause (j) of sub—section (2) of section 3 and the basis on which
any estimated figures or other information is given to the person intending to take or taking the flat.

5. Particulars to be contained in agreement for sale

The agreement sale referred to in Section 4 shall, inter alia, contain the following particulars, namely-

(a) If the building is to be constructed, the liability of the promoter to construct it according to the plans
and specification approved by the local authority where such approval is required under any law tor
the time being in force;

(b) The date by which the possession of the flat or apartment is to he handed over to the purchaser;

(c) The price to be paid by the flat or apartment purchaser and the intervals at which instalment thereof
may he paid;

(d) The precise nature of the organisation to be constituted of the persons who have taken or are to take
the flats or apartments;

(e) The nature, extent and description of the common areas and facilities;

(f) The nature, extent and description of limited common areas and facilities, if any;

(g) Percentage of undivided interest in the common areas and facilities appertaining to the apartment
agreed to be sold;

(h) Statement of the use or which the apartment is intended and restriction on its use, it any.

6. Documents copies whereof to be attached to agreement.

The promoter shall attach to the agreement referred to in Section 4 copies of the following documents,
namely.—

(a) The certificate by an advocate under clause (a) of sub-section (2) of Section 3;

(b) The plans and specifications of the flat to he sold.

7. Manner of making disclosure before the officer appointed under
Section 5.
(1) For the purpose of making disclosure of all the transactions in respect of the account referred to in
Section 5, or for the purpose of making disclosure of information in the manner prescribed in
these Rules, a promoter shall produce before the officer appointed under the said section, the
following documents in relation to such account within such time as that officer may fix in that
behalf, namely-

1. The Cash Book;

2. The General Ledger;

3. The Personal Ledger;

4. The Nominal Accounts;

5. The receipts of advances and deposits;

6. The vouchers of expenditure;

7. Bank pass book;

8. The Register of flat purchasers or apartment takers;

9. The Register of flats or apartments;

10.The statement indicating Receipts and Disbursement General.

(2) The Register of flat purchasers or apartment takers and the Register of flats or apartment shall be in
Forms I and II respectively, and the statement at Sl. Nos. 10 and 11 in sub-rule (1) shall be in Form
III and Form IV, respectively. The other documents referred to in sub-rule (1) may be maintained
according to the trade practice.

8. Fees to be paid under Section 7(4).

The fee to be paid for making a reference under sub-section (4) of Section 7 shall be Rupees one
hundred.

9. Period for submission of application for Registration of Co-

operative Society or Company of flat purchasers
Where a Co-operative Society or a Company of persons taking the flats is to be constituted, the
promoter shall submit an application to the Registrar for registration of the Co-operative Society or the
company, as the case may be, within four months from the date on which the minimum number of
persons required to form such organisation have taken flats2. Where the apartment takers propose to
submit the apartments to the provisions of the Karnataka Apartment Ownership Act, l972 by executing
Declaration and Deeds of Apartment as required by that Act, the Promoter shall inform the Registrar as
defined in the Karnataka Co-operative Societies Act, 1959 as soon as possible after the date on which
all the apartment Owners (being not less than five) have executed such Declarations and Deeds of
Apartment.

2 This does not make sense, as there is no such minimum number. In fact, in Companies Act 2013, even a single person can
start a company. How is the membership managed when more customers join? The relevant Acts do not provide any such
process.
10. Period for conveyance of title to organisation of flat
purchasers.
If no period for conveying the title of the organisation of the flat purchasers or the apartment owners is
agreed upon, the promoter shall (subject to his rights to dispose of the remaining flats, if any) execute
the conveyance within four months from the date on which the Co-operative Society or the company is
registered3 or as the case may be, the association of flat takers or apartment owners is duly constituted.

3 KOFR does not mention that the builder will represent the unsold portion of the property in the new company or co-
operative society, and that interest shall be transferred to the new flat-takers as soon as they book each flat. In absence of
that clarification, the first customer will be the sole member of the newly formed company, and can do whatever he likes
with the property till the other customers join him.
FORM I
(See Rule 7)

Form of Register of persons purchasing ownership flats or apartments in

..................................(name of building) and constructed by ........................................ (name of builder)

SI. No. Date of Application Name of the person Address Date of Agreement

(1) (2) (3) (4) (5)

No. of flat Floor Amount paid Date of No. of receipt Date of receipt
payment
or apartment

(6) (7) (8) (9) (10) (11)

FORM II
(See Rule 7)

Form of Register of flats or apartments sold in

.......................................... (name of buildings) and constructed by ..............................(name of the builder)

SI. No. of flats or Name of the Purchaser Address of the Whether purchased or agreed
No. apartments Purchaser to be purchased

(1) (2) (3) (4) (5)

Whether original Date of Agreement The price settled No. of instalment Date of payment
purchaser or a and amount
transferee

(6) (7) (8) (9) (10)

FORM III
(See Rule 7]

Statement indicating person-wise receipts and disbursements in respect of sums accepted as advance or
deposits from the flat or apartment purchasers in (Name of Building).........................

Constructed by (Name of Builder)..........................

Name of the Flat or Apartment purchaser Date of Agreement

Floor No. Flat No.

SI. Date of payment Receipt No Purpose Date of deposit in the Bank

No.

(1) (2) (3) (4) (5)

Date of Purpose of Date of Voucher No. Balance in account

withdrawal from withdrawal disbursement
the bank

(6) (7) (8) (9) (10)

Form IV
(See Rule 7)

Purpose of deposit of From whom Date of receipt Receipt no. Date of deposit in the Bank
advance received

(1) (2) (3) (4) (5)

Date of withdrawal Purpose of Date of Voucher No. Balance

from the bank withdrawal disbursement

(6) (7) (8) (9) (10)