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Inspector General of Registrations and Commissioner of Stamps, Kandaaya Bhavan, 8th Floor, KG Road, Bengaluru-560001 

Law Officer, O/o Inspector General of Registrations and Commissioner of Stamps, Kandaaya Bhavan, 8th Floor, KG Road, Bengaluru-560001 

Sir/Madam, 

We, the Bangalore Apartments’ Federation (BAF), is a representative body of more than 1100 apartment associations in Bangalore comprising about 3 lakhs apartment units. As the largest representative body of apartments in the State, we would like to bring some systemic issues regarding registration of conveyance deeds of apartment units in Karnataka to your notice. 

As a matter of practice in the State, every apartment unit is conveyed through a sale deed. Sale of immovable property and rights as well as liabilities of buyer and seller is defined in section 54 and 55 of the Transfer of Property Act 1882. Section 45 (joint transfer for consideration) of the Transfer of Property Act 1882 states that "Where immoveable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property in proportion to the shares of the consideration which they respectively advanced. In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property". Section 44 (Transfer by one co-owner) of the Transfer of Property Act 1882 states that "Where one of two or more co-owners of immovable property legally competent in that behalf transfers his share of such property or any interest therein, the transferee acquires as to such share or interest, and so far as is necessary to give, effect to the transfer, the transferor's right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same, but subject to the conditions and liabilities affecting, at the date of the transfer, the share or interest so transferred". 

Section 45 of the Transfer of Property Act 1882 creates a property ownership model called "tenancy in common" where all co-owners have proportionate ownership but no one has exclusive ownership or possession of any part of the property. Apartment complex being a property and apartment units being part of it, if apartments are conveyed under the provisions of the Transfer of Property Act 1882, apartment units in the complex cannot have exclusive ownership or possession by any co-owner. Hence, if apartment units are conveyed through sale deed encumbrance can only be marked against the whole property, not against individual apartment units. Mortgages can only be registered against the whole property, not against individual apartment units. In short, if an apartment unit is conveyed through sale deed, it cannot be considered as a heritable and transferable immovable property with exclusive ownership and possession. 

The Karnataka Apartment Ownership Act 1972 was enacted to address this issue. The statement of objects and reasons of the act state that "Consequent upon the shortage of lands in urban areas, the majority of the citizens of urban areas of the State cannot think in terms of owning houses on individual basis. Though there is a tendency to construct multi-storeyed flats, apartments and the like on ownership basis, intending persons cannot purchase flats, tenements, or apartments in multi-storied building as they will not have a marketable title thereto and cannot obtain any loan by mortgaging such flats, tenements, etc. Consequently tenements constructed by the Housing Board for example cannot be sold to the tenants who cannot raise any loan on the security of such tenements with the result that an enormous amount of capital will be locked up, which can be utilised for new constructions to meet the increasing demands for housing. It is, therefore, considered expedient that each apartment should for all purposes constitute a heritable and transferable immovable property, and that suitable legislation should provide for all matters connected therewith". 

Unfortunately our system creates an encumbrance record for each apartment unit and allows registration of mortgaging of each apartment unit though it is conveyed under provisions of the Transfer of Property Act 1882 instead of the Karnataka Apartment Ownership Act 1972. Hence our system of conveyance of apartment units is not as per the law. As per the law, apartment units can be considered heritable and transferable property only if they are conveyed under the provisions of the Karnataka Apartment Ownership Act 1972 and only then they can have separate record for encumbrance. Only such apartment units can be mortgaged without permission from all other co-owners of the complex. 

However, there are hurdles in conveyance of apartment units under the provisions of the Karnataka Apartment Ownership Act 1972 due to lack of proper implementation of the Act. Issues related to the Registration Department are 

1) Section 13(3) of the Karnataka Apartment Ownership Act 1972 mandates that in all registration offices a book called " Register of Declarations and Deeds of Apartments under the Karnataka Apartment Ownership Act, 1972" and Index relating thereto shall be kept. The book and the Index shall be kept in such form and shall contain such particulars as may be prescribed. Unfortunately, this is not yet implemented. 

2) Stamp duty and registration fee for registration of Deed of Declaration under the provisions of the Karnataka Apartment Ownership Act 1972 are not yet notified. 

Further, section 9(1) of the Karnataka Apartment Ownership Act 1972 states that "Subsequent to recording the Declaration as provided in this Act, and while the property remains subject to this Act, no encumbrance of any nature shall thereafter arise or be effective against the property". This means that after the execution of the deed of declaration and marking this in the encumbrance record of land, there should not be any further recording of encumbrance on the land as long as the property remains subject to the act. This effectively declares the title of the property belongs to the group of owners known by the name mentioned in the declaration. Unfortunately, this is not implemented and hence not practiced. Even after execution of the deed of declaration, encumbrances continue to get recorded on the land. 

There are millions of apartment owners in Karnataka who purchased apartment units as heritable and transferable immovable property with exclusive ownership and possession. Many have changed hands and many of these are under home loan. Hence in the interest of existing and prospective apartment owners, the legal framework of conveyance of apartment units should be properly implemented. 

Considering above facts and in the interest of millions of apartment owners in Karnataka who purchased apartment units as heritable and transferable property, we request you to consider following exercising powers conferred on you under section 69 of the Registration Act 1908 

1) Implement and notify register of declaration and deed of apartments as mandated by the Karnataka Apartment Ownership Act 1972 

2) Notify stamp duty and registration fee for registering deed of declaration 

3) Replace deed format for first sale of flat/apartment available in department website with apartment deed. Publish format for deed of declaration as well. 

4) Deed of declaration of apartment complex is mandatory for conveying apartment units in the complex as heritable and transferable immovable property with exclusive ownership and possession. Such conveyance of apartment units shall be in the form of apartment deed as mentioned in section 12 of the Karnataka Apartment Ownership Act 1972 

5) Registration of mortgage deed or hypothecation of apartment unit is possible only if it is conveyed under the provisions of the Karnataka Apartment Ownership Act 1972 

6) Implement section 9(1) of the Karnataka Apartment Ownership Act 1972 and mark the title of the property in the name of the group of owners mentioned in the declaration 

7) Allow registration of deed of declaration by owners of all apartment complexes across Karnataka without any hurdles so that they can bring their apartment units under the legal framework that make apartment units heritable and transferable immovable property with exclusive ownership and possession. Kindly issue a circular to all registration offices in the State regarding this. 

Further, we request you to grant us an opportunity to meet you and explain our view as early as possible. 

Awaiting a favorable response, 

Yours faithfully, 

Hareesh Sivaraman, 

Member- Legal & Statutory Track, 

Governing Council,

Bangalore Apartments' Federation