Ut­tar Pradesh Apart­ment Act Em­pow­er­ing flat buy­ers

The Act makes it manda­tory for pro­mot­ers to dis­close ev­ery­thing that con­sti­tutes the ‘com­mon ar­eas and fa­cil­i­ties’ to an al­lot­tee be­fore book­ing

HT Estates - - NEWS - Sudeepta Kr Pal

To­day a typ­i­cal group hous­ing com­plex ac­com­mo­dates a big­ger pop­u­la­tion than an av­er­age vil­lage of Ut­tar Pradesh and he life-time sav­ings of an equal num­ber of peo­ple are in­vested in it. A prac­ti­cal law then be­comes a ne­ces­sity for ef­fec­tive maintenance of the com­mon as­sets, in­di­vid­ual own­er­ship, trans­fer­abil­ity and mat­ters gov­ern­ing the rights and obli­ga­tions of all the stake­hold­ers – ie buy­ers, pro­mot­ers and the de­vel­op­ment au­thor­ity.

The UP Apart­ment Act 2010 can be ef­fec­tive enough. It was en­acted con­sid­er­ing the present cir­cum­stances, es­pe­cially since the 2003-04 or­di­nances could not be trans­lated into an Act. No­ti­fied on March 19, 2010, it brought UP at par with rest of the NCR, re­plac­ing the UP Flat Act 1975.

En­vis­ag­ing to­tal trans­parency, it has been made manda­tory for all pro­mot­ers to make true dis­clo­sure of the land, en­cum­brances, plans with spec­i­fi­ca­tions, na­ture of fixtures, ameni­ties, de­tails of design and ma­te­ri­als and, most im­por­tantly, the ‘com­mon ar­eas and fa­cil­i­ties’ to an al­lot­tee be­fore book­ing. This is sim­i­lar to the Ma­ha­rash­tra Own­er­ship Flats Act or MOFA. It rested a most con­tentious is­sue, as to what con­sti­tutes ‘com­mon ar­eas and fa­cil­i­ties.’ In a com­mon man’s lan­guage ‘com­mon ar­eas and fa­cil­i­ties’ in­clude ev­ery­thing in­side the plot ex­cept the dwelling unit and con­ve­nient shops pro­posed to be un­der in­di­vid­ual own­er­ships and pos­ses­sion.

The Act also re­it­er­ates in no un­cer­tain terms that the pro­por­tion­ate share of ‘com­mon ar­eas and fa­cil­i­ties’ can­not be al­tered af­ter al­lot­ment, even if it is not ex­pressly men­tioned in the in­stru­ment of trans­fer/al­lot­ment. The apex court in Ni­halc­hand Lalooc­hand ver­sus Pan­chal… ob­served that “MOFA man­dates the pro­moter to de­scribe com­mon ar­eas and fa­cil­i­ties in the ad­ver­tise­ment. The ‘agree­ment’ with the flat pur­chaser and the pro­moter is also re­quired to indi­cate the price of the flat, in­clud­ing the pro­por­tion­ate price of the com­mon ar­eas and fa­cil­i­ties.

The UP leg­is­la­tors re­it­er­ated the valu­able right of an al­lot­tee through the pro­viso that the pro­moter shall not make any al­ter­ations in the plans, spec­i­fi­ca­tions and other par­tic­u­lars with­out the pre­vi­ous con­sent of the in­tend­ing pur­chaser. The Supreme Court in M/s Jayan­ti­lal In­vest­ments ver­sus Madhu Vi­har Co­op­er­a­tive Hous­ing So­ci­ety Ltd case, dated Jan­uary 11, 2007, held that once the orig­i­nal plans of the build­ing are ap­proved by the lo­cal au­thor­ity and the flats are sold on that ba­sis, the pro­moter/de­vel­oper is pro­hib­ited from mak­ing any ad­di­tions or al­ter­ations with­out the con­sent of the flat pur­chasers. It was held by the Supreme Court that a com­pre­hen­sive project scheme has to dis­close de­tails of the plot of land where the builder is go­ing to con­struct the flats. Sub­se­quently, the Al­la­habad High Court in writs against Noida re­strained Omaxe In­fra­struc­ture from con­struct­ing ad­di­tional vil­las and base­ment stores over and above the sanc­tioned plan by amend­ing it with ad­di­tional FAR be­cause no prior con­sent was ob­tained from the pe­ti­tion­ers.

Be­sides set­ting a max­i­mum of two years time to ob­tain ‘com­ple­tion cer­tifi­cate’ of the project from the date of al­lot­ment agree­ment and two years pe­riod to re­main re­spon­si­ble for con­struc­tion and struc­tural de­fect af­ter hand­ing over of the apart­ment, this pub­lic pol­icy aptly es­tab­lishes par­ity be­tween rights and obli­ga­tions of apart­ment owners who gets own­er­ship through mem­ber­ship of a co­op­er­a­tive so­ci­ety and those who ob­tained own­er­ship in a scheme pro­posed by a pro­moter/builder, by mak­ing it com­pul­sory for each apart­ment owner to be­come the mem­ber of the sole as­so­ci­a­tion of owners. This law there­fore, pro­hibits the cre- ation of more than one as­so­ci­a­tion/RWA within a project, to en­sure smooth trans­fer of the pos­ses­sion of ‘com­mon ar­eas and fa­cil­i­ties’ and its man­age­ment from the builder/pro­moter to the as­so­ci­a­tion/RWA af­ter ob­tain­ing the ‘com­ple­tion cer­tifi­cate’. But cre­ation of a sec­ond as­so­ci­a­tion is preva­lent. Re­cently one ‘Com­pe­tent Au­thor­ity un­der the 2010 Act’ had to order the pro­moter ‘deemed hand over’ of the com­mon as­sets to the first as­so­ci­a­tion terming it ‘un­jus­ti­fied’ on part of a builder to raise the plea of other sub­se­quent as­so­ci­a­tions in the plot.

The 2010 Act/rules en­vis­age the ex­e­cu­tion of deed of apart­ment in place of sale deed/sub lease like Delhi be­sides sub­mis­sion of a com­pre­hen­sive ‘dec­la­ra­tion’ by all pro­mot­ers of projects hav­ing more than four apart­ments whether al­ready con­structed or un­der con­struc­tion within a spec­i­fied time to the com­pe­tent au­thor­ity. Th­ese pro­vi­sions are to elim­i­nate all am­bi­gu­ity over the built-up area of the apart­ment, share of land, num­ber of floors, com­mon ar­eas and fa­cil­i­ties, vot­ing right of each owner, park­ing de­tails, in­de­pen­dent ar­eas etc. The Delhi High Court vide order dated May 28, 2010, di­rected that “in­ac­tion/fail­ure of the pro­mot­ers/builders in ex­e­cut­ing and reg­is­ter­ing the deed of apart­ment would en­ti­tle the owner of the apart­ment to get all the ben­e­fits of the Act”. The High Court again in 2012 or­dered the DDA and L&DO that “if the pro­mot­ers / builders still de­faults, ex­e­cute and reg­is­ter the deed it­self and even draw up the de­tails of the scheme it­self,” if not made avail­able in the sub­mit­ted plan.

For easy in­te­gra­tion of the ex­ist­ing as­so­ci­a­tion/RWAs

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