Builders have no right to sell stilt parking: SC

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Builders have no right to sell stilt parking:  SC
(reproduced from  "Times of India", Mumbai Edition, 02-09-2010, page no. 02)


New Delhi: The Supreme Court has ruled that builders/promoters cannot sell parking areas as independent units or flats as the same is to be extended as “common areas and facilities” for the owners. A bench of Justices R M Lodha and A K Patnaik in a judgment rejected the argument of a real estate development company that they are entitled to sell garages/stilt parking areas as separate flats to owners who intend to use it as parking facilities.


   “If a promoter does not fully disclose the common areas and facilities, he does so at his own peril. Stilt parking spaces would not cease to be part of common areas and facilities merely because the promoter has not described the same as such in the advertisement and agreement with the flat purchaser. 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.’’


   “It is, thus, clear that the promoter has no right to sell stilt parking spaces as these are neither flats nor apartments or attachment to a flat,’’ Justice Lodha writing the judgment said.


   The SC passed the judgment while dismissing the appeal of the promoter, Nahalchand Laloochand Pvt Ltd, challenging 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 garage. 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.


   It brushed aside the claim of the promoter that by treating open/stilt parking space as part of common areas, every flat purchaser will have to bear proportionate cost for the same although he may not be interested in such parking space at all.


   “As a matter of fact, so far as the promoter is concerned, he 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.


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Practicing Advocate

Useful information

 
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Advocate

The ruling could bring relief to lakhs of flat-owners in different housing societies in Mumbai engaged in a tug of war with the builders over sale of such space as parking lots.
 

 
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Director

yes. this will have a far fletching significance since many builders sell flats and common areas and also sell separately these stilt spaces, thus making illegal gains in one and the same area i.e. through common areas and then as stilt spaces. Only the purchasers were loosers. Now the Purchasers will gain something out of this.


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As per new Bye law No. 78 (a), "member may hold parking space/stilt if he has purchased the same and he shall have a right to sell the same to transferee or other eligible member of the same society."  Thus the new provision recognises the sale of car parking space by the builder.  This provision is contradictory to this latest judgement. By this provision, the purpose of this latest judgement cannot be achieved. In order to give effect to this judgement, I believe that the Bye law No. 78 (a) needs to be deleted/ repealed immediately.

 
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Dear Seniors,

whether this SC judgement is useful in Tamil Nadu as there is no specific statute as you have in Mumbai on flat promoters.

 

Regards,

Krishnaraj P R

 
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Properties and Finances

Very Good info,Builders are selling flats on the basis of super area which does not make anything clear to the purchaser,that also should be banned ,they should be allowed to sell the flats only on the basis of carpet area only.


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Director

Mr. Vaibhav Bhole, Now that the SC has passed a Judgement, the society's bye-laws will become infructuous and cannot be acted upon. No need of deletion and/or repealing the same. It is nullified and the society cannot act as per the rules. If the society acts as per the rule then it will be against the Judgement and can be challenged in the court of law.

 
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Please let us know the case law in which this judgement is given, if available with anyone. 

 
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ADVOCATE

Thanks for information,  please give me date of judgement.

 
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