The Karnataka Real Estate Regulatory Authority (K-RERA) Full Bench, in its order dated 29 November 2025, addressed a complaint concerning the project Sobha Arena regarding disclosure of project insurance details, repairs to a damaged clubhouse, and safety measures. The complainants alleged that the promoter had not provided copies of insurance policies or related documents despite repeated requests. The Authority observed that obtaining project insurance and transferring its benefits to the Association of Allottees is a mandatory statutory obligation under the Real Estate (Regulation and Development) Act, 2016, independent of maintenance-related issues. It held that compliance must be supported by insurance policies, premium payment records, and documents showing transfer of insurance benefits to the Association. Since the promoter failed to produce evidence of insurance coverage, renewals, or transfer of benefits, the Authority found that the obligation remained unfulfilled. It further held that the handover of maintenance in 2019 did not affect the promoter’s separate statutory responsibility regarding insurance. The Authority stated that any failure to obtain or transfer insurance should not result in financial liability being shifted to allottees or the Association. Accordingly, the promoter was directed to furnish all insurance-related documents, including policy copies, premium payment receipts, endorsements, and records evidencing transfer of insurance benefits for the project, clubhouse, and common facilities to the Association of Allottees within 30 days of the order.
Judgement by the Karnataka Real Estate Regulatory Authority Full Bench passed a judgment on 29 November 2025 in the matter of Dhananjay and Varsha Dhananjay v. Sobha Ltd. and another:
Transfer of the insurance benefits to the Association:
a. Complaint Seeking Disclosure of Project Insurance Details – A complaint was filed under Section 31 of the Real Estate (Regulation and Development) Act, 2016 in respect of the project Sobha Arena, seeking directions to the promoter to undertake repairs to the damaged clubhouse, ensure safety measures, and furnish details of the project insurance policy. The complainants contended that, despite repeated requests, the promoter failed to provide copies of the insurance policy or related documents, raising concerns as to whether the project amenities were insured at all. Consequently, the complainants sought intervention of the Authority for enforcement of statutory obligations, including disclosure and transfer of insurance documents to the Association of Allottees.
b. Mandatory Nature of Insurance Obligations – The Authority observed that the core grievance related to non-compliance with the statutory requirement of obtaining and transferring project insurance. It reiterated that the obligation to insure the project and its amenities, and to transfer the benefit of such insurance to the Association of Allottees, is mandatory in nature and operates independently of issues concerning maintenance or its handover.
c. Proof of Compliance Required – The Authority emphasised that compliance must be demonstrated through production of insurance policy documents, proof of premium payments, and records evidencing transfer of the insurance benefits to the Association. In the present case, the promoter had not produced any material to establish that mandatory insurance had been obtained for the clubhouse or allied amenities, nor were any renewal documents or transfer records furnished. The contention that maintenance had been handed over in 2019 was held to be irrelevant, as the statutory obligation to obtain and transfer insurance remains distinct and continues until duly complied with.
d. Promoter’s Continuing Obligation – The Authority held that failure on the part of the promoter to obtain or transfer insurance cannot result in any financial burden being imposed on the allottees or the Association for losses that ought to have been covered under such insurance. The promoter continues to remain under a statutory obligation to furnish all documents relating to insurance obtained in respect of the project amenities, along with proof of premium payments.
e. Directions Issued by the Authority – Accordingly, the Authority directed the promoter to furnish to the Association of Allottees all documents relating to insurance obtained for the entire project, including the clubhouse and common areas or facilities. This includes copies of insurance policies, premium payment receipts, endorsements, and documents evidencing transfer of the benefit of insurance. The promoter was directed to comply with these directions within a period of 30 days from the date of the order.
This judgement draws the attention and the need for professionals to proactively advise promoters on timely compliance with insurance related obligations to prevent avoidable financial exposure. Early guidance and monitoring can significantly reduce the risk of non-compliance under Section 16 of the RERA Act 2016.
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The author CA.Vinay Thyagaraj is a partner at M/s.Venu & Vinay, Chartered Accountants, he can be reached at vinay@vnv.ca
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