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krishnarajpr (n/a)     20 July 2009

Validity of sale of car slots in apartments

Dear Seniors, I have a querry on sale of Car parking slots by the flat promoters.

When we purchase an undivided share of land in the transaction of purchasing a flat in an apartment, I presume that we are sold an undivided share of land. Like this, all the owners of the flat should be sold some undivided share of the land on which the apartment is being built.

Logically, if we put together all the undivided share of the land sold, it should tally with the whole of extent of land owned by the flat promoter (subject to certain extent of land statutorily left).

At this stage, now let us assume that I need to have a car parking within the premises. Most of the promoters are selling parking slots to the intending owners at some rates fixed by them.

My doubt here is that when the individal owners have purchased the whole of extent of land (of course each one purchasing some undivided share), how come the promoter sell again a place for consideration.

I understand that the calculation of undivided share includes this area where the car parking is alloted.

If my question is correct, would like the seniors to suggest their reply. If my assumption is wrong, then pleae clarify how the undivided share is being calculated in apartments



Learning

 6 Replies

Adv. Lalit K. Jhunjhunwala (Lawyer)     23 July 2009

Dear Krishnarajpr,

The builder/promoter can nor sell car park to any intending person who takes up a flat in the building. However he can allot the same on first come first serve basis. The said allotment can be reshuffled by the Apartment condominium/Co-Op Society. The alloted parking space means the allottee has right only to  park his vehicle over there and he is not the owner of piece of land on which he is to park the vehicle. The builders taking money and alloting parking space is illegal. However it is a genral practise to take money and allot parking but in that case they no where in the agreement right that they have taken money for such allotment. In case they have written it is illegal and can be challanged in the appropriate courts.

Hope this solves your query.

Adv. Lalit K. Jhunjhunwala (Lawyer)     23 July 2009

Further,

Car Park Spaces Do Not Have Independent Status – Opines Maharashtra State

Co-operative Appellate Court, Mumbai.

“ It is pertinent to note that parking spaces are mentioned in clause 22 of the Maharashtra Ownership Flats Act along with words open space, lobbies and staircase giving clear indication that these spaces are also common amenities. This also indicates that car park spaces do not have independent status. Clause numbers 22 and 23 could not have given the promoter/ developer right to deal with the open spaces, car park spaces lobbies and staircase. Such property would remain the property of the promoter/ developer, but he would keep the property as trustee and convey the same at the earliest to an association formed by the purchaser of flats. This is legal obligation of the promoter/developer under section 11 of the Maharashtra Ownership Flats Act, “Observed Shri V N Nirgude, President of the Maharashtra State Co-operative Appellate Court, Mumbai while dismissing an appeal filed by a member of Arenja Arcade Premises Co-operative Society Ltd. Navi Mumbai, against the judgment of the lower Court, rejecting the application of the appellant for temporary injunction against the Society.

The facts of the case are as follows:

The appellant M/s. Prakash Auto was the disputant and the respondents were the opponents in the lower Court. The cause of action for the dispute was as under:

The Appellant is a member of the Respondent No.1, Arenja Co-operative Society Ltd., Vashi, Navi Mumbai and Respondent No. 2, M/s. Shabi Construction Company, is a Promoter of the building in which various persons purchased the units.

The sanctioned plan provided that there would be a basement for the building, where there would be 16 car parking spaces. It was the case of the Appellant that acquiring the shops, the shopkeepers approached the promoter (Respondent no.2) for allotment of car parking spaces in the basement and allotted 14 car spaces to them in 1995 charging certain amount. The Appellants stated that they have been in occupation of these car parking spaces since then. The Respondent No.1, the Society was formed in the year 1999. For the first time in October 2000, the society took objection to the Appellants occupying these car park spaces. The society refused to recognise the transaction between  the Appellants and Respondent No.2 about ‘allotment’ of the spaces in 1995. This stand of the society gave rise to the dispute. The appellants filed the dispute for permanent injunction to prevent the society from dealing with these disputed car park spaces and from disturbing their occupants/ user of the same. The Appellants also moved an application for temporary injunction for similar relief.

The society opposed the application whereas the Respondent No.2 supported the Appellants by filing an affidavit. The society’s contention was that the Respondent No.2 was not entitled to allot/sell/dispose of the disputed car park spaces to the Appellants and so the Appellants would not get any title to them.

The judgement of Co-operative No. V, Mumbai who heard the parties came to a conclusion that the Respondent No.2 (The Developers) could not have lawfully allotted the disputed car park spaces to the Appellants and so rejected the application for temporary injunction. So the Appellants went into the appeal against that order.

After hearing the arguments of both the parties, the President of the Appellate Court observed that though the Respondent No.2 was the owner of the building, he was unable to deal with the covered parking spaces provided in the basement, such restriction on his ownership right is put by the provisions of the Maharashtra Ownership Flats Act. The promoter has to deal with the property subject to these restrictions. In the opinion of the president, such restrictions would certainly not cause loss to him. He could take into account this restriction while calculating price of the flats of the units. The president referred to the plea of the Appellants counsel that clauses 22 and 23 of the agreement dated 13th August 1994, that the flat purchasers should not have any claim in respect of open car space, lobbies,, staircase etc., and such area would remain property of the promoter until the building was transferred to a co-operative society or limited company as the case may be. These clauses further provided that the promoter should be at liberty to sell assign or otherwise deal with their interests in the said plot and building subject to the rights of the purchasers under this agreement. The president was of the view that these two clauses did give an indication that promoter would control the sale of open space, car park space, lobbies, staircases etc., until the property is conveyed to the society or a company. The president admitted that the open space, parking space, lobbies, staircase are common amenities which are married to a building. He also admitted that the purchasers of the flat can not have exclusive ownership of such common amenities. He pointed out that in fact promoter is prevented from doing so under Section 23 of the said Act, which makes it clear that the promoter would be able to deal with such common amenities subject to rights of purchasers of flats, whose right can not be hampered by putting any of the open spaces, staircase, etc. According to the president it was pertinent to note that parking spaces are mentioned in clause 22 along with words open space, lobbies and staircase giving clear indication that this spaces are also common amenities. This also indicates that car park spaces do no have independent status. Clause 22 and 23 could not have given the respondent No.2, right to deal with open space, car park spaces, lobbies and staircase. Though, such space would remain the property of the promoter/developer, he would keep the property as trustee and convey the same at the earliest to an association formed by the purchaser of the flats. This is his legal obligation under section 11 of the Maharashtra Ownership Flats Act.

With this observation, the Appellate Court dismissed the appeal of the Appellant (M/s. Prakash Auto, Appellant Vs.1.) Arenja Arcade Premises Co-operative Society (2) M/s. Shabi Construction Co.- Respondents ( A.O No. 86 of 2001. March 4, 2002).

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(Guest)

The Sessions court order directing prosecution of the developer for selling parking space will be uploaded in the file section of this site after moderation  hopefully by tomorrow.

Praveen Singhai (Advocate)     19 November 2009

Mr. Lalit And Anil the judgement reffered is based on Maharashtra Ownership Flats Act, can this is valid for other states. can in delhi also??

 

Mangesh law_student (Service)     28 January 2010

Mr.Praveen,

Even though the judgement is based upon the (MOFA) Maharashtra Ownership Flat Act, main issue was discovered by Hon'ble Bombay High Court  is weather builder can sale or dispose the space which is not included in his FSI.

Now the matter is in SC and order date is 9th March 2010. Once SC give order in favor of flat owners the other state too need to amend their laws and they should do it because this is in the benefit of large number of people.

Regards,

Mangesh

Thilak (Engineer)     29 January 2010

Dear Sirs,

I need clarification which is related to the above query. Please see below.


A, B, C and D are flat owners of the apartment. Case filed on D by A, B, C on common parking area.  In this situation, can I buy resale flat from flat owner A? Will it be legally correct and valid?  My doubt is, as we know the registered Undivided Share includes common parking area also. The vendor going to sell his registered UDS only which is inclusive of some sq ft. of common area. Now the common area is under case.  Even in this situation can I buy a flat?

Please advise me.
 

Regards,

Thilak

Chennai


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