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
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