(1) The promoter shall obtain all such insurances as may be notified by the appropriate Government, including but not limited to insurance in respect of--
(i) title of the land and building as a part of the real estate project; and
(ii) construction of the real estate project.
(2) The promoter shall be liable to pay the premium and charges in respect of the insurance specified in sub-section (1) and shall pay the same before transferring the insurance to the association of the allottees.
(3) The insurance as specified under sub-section (1) shall stand transferred to the benefit of the allottee or the association of allottees, as the case may be, at the time of promoter entering into an agreement for sale with the allottee.
(4) On formation of the association of the allottees, all documents relating to the insurance specified under sub-section (1) shall be handed over to the association of the allottees.
Legal Commentary & Landmark Judgments: Section 16
Section 16 mandates that the promoter obtain comprehensive project insurance covering title of the land and construction of the real estate project, transferring the benefit directly to the association of allottees upon execution of conveyance.
At the time of taking physical handover of common amenities, verify that the developer has assigned active title and structural defect insurance policies to the Resident Welfare Association (RWA).