Karnataka Apartment Bill Gives Flat Owners Ownership Rights Over Project Land

A proposed Karnataka law seeks to expressly recognise apartment owners' proportionate ownership rights over the land on which their project stands. It would also require those rights to be reflected in revenue records, khata, and mutation registers.

The Karnataka Apartment (Ownership and Management) Bill, 2025, would replace the Karnataka Apartment Ownership Act, 1972 and the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972.

Unlike the Karnataka Apartment Ownership Act, 1972, under which the law applied only where the sole owner or all owners voluntarily submitted a property to the Act by executing and registering a declaration, the Bill would apply mandatorily to projects containing more than eight apartments in one or more buildings, subject to specified exemptions.

One of the Bill's key changes relates to how apartment owners hold rights over the project land.

Under the existing law, Section 3(f) of the Karnataka Apartment Ownership Act, 1972 treats "the land on which the building is located" as part of the "common areas and facilities".

The definition also covers the structural portions of the building, gardens, parking areas, service installations and "such community and commercial facilities as may be provided for in the Declaration."

As a result, apartment owners derive their rights over the project land through their undivided interest in the common areas.

The bill adopts a different approach. It treats the project land and the common areas and facilities as separate components while granting apartment owners an undivided interest in both.

Clause 2(i) excludes "the land of the project" from the definition of "common areas". Instead, it defines "common areas" as "those parts of the project, other than the apartments and the land of the project, which are intended for the common use, enjoyment, maintenance or management of the apartment owners."

Clause 3 provides that every apartment owner shall have an undivided and non-exclusive right, title and interest in both the project land and the common areas and facilities. The owner's proportionate share is to be determined in the ratio of the apartment's private area to the total private area of all apartments in the project. Separately, the Bill provides that the undivided interest in the project land shall be reflected in the revenue records, khata and mutation registers.

The Bill also broadens the statutory definition of "common areas and facilities" by expressly bringing several categories of project infrastructure within its scope.

Besides the structural portions of the building, gardens, parking areas and service installations recognised under the existing law, the Bill includes internal roads, driveways, pedestrian walkways, landscaped open spaces, compound walls, security cabins, storm-water drains, service shafts, utility ducts, electrical substations, transformer yards, generator rooms, pump rooms, rainwater harvesting structures, sewage treatment plants, solid waste management facilities, renewable energy systems and other infrastructure intended for common use.

The Bill also clarifies that charging apartment owners separately for facilities such as clubhouses, gymnasiums or similar amenities will not, by itself, change their status as common areas.

It states, "The levy of user charges, membership fees or similar charges for the use of any facility within the project shall not alter the character of such facility as forming part of the common areas and facilities, unless such facility is expressly excluded in the declaration in accordance with the provisions of this Act."

The proposed law also spells out when community and commercial facilities form part of the common areas and facilities.

Clause 2(m) provides that community and commercial facilities, including clubhouses, swimming pools, gymnasiums, spas and sports facilities, shall form part of the common areas and facilities where they are constructed within the project and form part of the land submitted for development or consume the project's Floor Area Ratio (FAR).

A promoter may retain ownership only if the facility is constructed on a separate parcel of land. Such retention must be specifically approved in the sanctioned plan. The ownership rights must also be disclosed in the declaration and the agreement for sale before allotment.

Even in such cases, the built-up area of the retained facility cannot be taken into account while computing the apartment owners' undivided share in the land or their proportionate share in the common areas and facilities.

The bill also addresses additional development rights that may arise after a project is completed.

Clause 8 provides that any additional built-up area, development rights or development potential arising because of changes in planning regulations, zoning regulations, Floor Space Index (FSI), Floor Area Ratio (FAR) or for any other reason shall belong collectively to the apartment owners.

Those rights are to be distributed or utilised in proportion to the private area of each apartment relative to the total private area of all apartments in the project. The bill further provides that no promoter or developer shall claim or retain those rights except to the extent of the undivided right, title and interest attached to unsold apartments, unless the apartment owners subsequently transfer those rights in accordance with the Act.

The draft bill is open for public objections and suggestions until August 6, 2026.