Builder's right to sell terrace, open space

This query is : Resolved 

Querist : Anonymous (Querist)
12 November 2011

Under Maharashtra Ownership Flats Act whether a Builder is entitled to sell terraces and open spaces and parking areas?

Pls quote High Court and Supreme Court Rulings on the subject.

ajay sethi (Expert)
Click to Talk
12 November 2011

no he is not tentitled to sell .

In a landmark judgement given on this matter, Mr Justice D G Deshpande of Mumbai High Court, on writ petition No. 4577 of 1985, decided on 5-7-1999 in the matter of Smt. Ramagauri Keshavlal Virani V/s Om Walkeshwar Triveni Co-op housing society Ltd & others. The learned judge passed the judgement saying, for all these reasons, I have no alternative but to hold that judgements of the Trial Court as well as Appellate Court do not require any interference. Lastly, it was argued by Mr. Naik that since two bedrooms have the opening on the terrace, security of the flat of the petitioner should be maintained. Mr. Deodhar appearing for the respondent No. 1 has given an assurance that nothing will be done by the society to endanger the security of the flat of the petitioner. This will, however, not prevent the society in exercising its right over the terrace. Hence, petition dismissed. Rule discharged. Stay vacated. No order as to costs. Prayer for stay of operation of this order is rejected

Shailesh Kr. Shah (Expert)
12 November 2011

please refer to earlier replied.

ajay sethi (Expert)
Click to Talk
12 November 2011

Builders can not sell stilt parking areas – Supreme Court
In a recent case of an argument of a real estate development company that they are entitled to sell garages or stilt parking areas as separate flats to owners who intend to use it as parking facilities, a bench of Justices A K Patnaik and R M Lodha of Supreme Court, ruled that builders or promoters cannot sell parking areas as independent units or flats as these areas are to be extended as “common areas and facilities” for the owners.

The court passed the judgment while dismissing the appeal of the promoter, Nahalchand Laloochand Pvt Ltd, who challenged the Bombay high court’s ruling that under the MOFA (Maharashtra Ownership Flats Act) a builder cannot sell parking slots in the stilt area as independent flats or garages. The apex court accepted the argument of the flat owners of Panchali Co-operative Society in Dahisar (E) that even if they had entered into any prior agreement or contract with the builder that they would not lay any claim on the parking areas, the same would not have any legal sanctity.

the court also disclaimed the appeal of the promoter that by treating these parking spaces as common areas, every flat purchaser in any case will have to bear proportionate cost for the same even if he may not be interested in such parking space at all.

Justice Lodha wrote in the judgment that the promoter has no right to sell any portion of such building which is not a ‘flat’ within the meaning of Section 2(A-1) and the entire land and building has to be conveyed to the organization. The only right that remains with the promoter is to sell unsold flats. Thus, it is clear that the promoter has no right to sell stilt parking spaces as these are neither flats nor apartments or attachments to a flat.

It is necessary for a promoter to fully disclose the common areas and facilities. Stilt parking spaces are usually not described as the part of the common areas. The same as such does not appear in the advertisement and agreement with the flat purchaser.

So far the said promoter is not put to any prejudice financially by treating open parking space/stilt parking space as part of common areas since he is entitled to charge a price for the common areas and facilities from each flat purchaser in proportion to the carpet area of the flat,” the apex court said.

prabhakar singh (Expert)
12 November 2011

yes Mr. sethi is right.

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