LAW BOOK

HT Estates - - HTESTATES - Sunil Tyagi

Can a de­vel­oper re­duce the per­cent­age of un­di­vided in­ter­est of the al­lot­tees in com­mon ar­eas and fa­cil­i­ties of the project? The project in ques­tion is lo­cated in Andhra Pradesh.

— Su­gandha Rao As per Andhra Pradesh Apart­ments (Pro­mo­tion of Con­struc­tion and Own­er­ship) Act, 1987, af­ter the plans, spec­i­fi­ca­tions, and the na­ture of fix­tures, fit­tings, ameni­ties and com­mon ar­eas as sanc­tioned by the lo­cal au­thor­i­ties or ur­ban de­vel­op­ment author­ity con­cerned, are dis­closed to an in­tend­ing trans­feree, and a writ­ten agree­ment of sale has been en­tered into, the de­vel­oper is not en­ti­tled to make any ad­di­tions and al­ter­ations therein. Any ad­di­tions/al­ter­ations that af­fect all apart­ments can only be car­ried out af­ter ob­tain­ing prior ap­proval of the lo­cal author­ity or con­cerned ur­ban de­vel­op­ment author­ity.

The per­cent­age of un­di­vided in­ter­est of each apart­ment owner in com­mon ar­eas and fa­cil­i­ties as ex­pressed in the dec­la­ra­tion filed by the de­vel­oper, may not be al­tered with­out the prior con­sent of all apart­ment own­ers, ex­pressed in an amended dec­la­ra­tion duly ex­e­cuted and reg­is­tered as pro­vided in this Act. I am the orig­i­nal al­lot­tee of an un­der-con­struc­tion flat. As I am un­able to con­tinue pay­ing the in­stall­ments, can I trans­fer my al­lot­ment? Is stamp duty to be levied on such a trans­ac­tion?

— Shankar Lal If you wish to can­cel your al­lot­ment and know of a third party who is will­ing to pur­chase this un­der­con­struc­tion property, you may re­quest the de­vel­oper for trans­fer/ en­dorse­ment of the al­lot­ment in favour of such third party buyer, in ac­cor­dance with the spe­cific trans­fer pro­ce­dure set out by the de­vel­oper and as per the terms and con­di­tions con­tained in the flat­buy­ers’ agree­ment. For en­abling trans­fer of al­lot- ment of an un­der-con­struc­tion property, a de­vel­oper may de­mand pay­ment of trans­fer charges pre­scribed by the de­vel­oper which are usu­ally cal­cu­lated on a per square foot ba­sis. There are cer­tain states in which agree­ment to sell (in­clud­ing buyer’s agree­ment) are com­pul­so­rily reg­is­ter­able and req­ui­site stamp duty is re­quired to be paid. I have re­ceived a de­mand let­ter from the de­vel­oper of a project, re­gard­ing in­creased pay­ment to­wards EDC and IDC. What is the dif­fer­ence be­tween EDC and IDC? Is the de­vel­oper en­ti­tled to raise such a de­mand?

—An­ju­man Shah Ex­ter­nal de­vel­op­ment charges (EDC) are usu­ally payable to­wards util­i­sa­tion and re­pair, main­te­nance and strength­en­ing of ex­ter­nal de­vel­op­ment works such as wa­ter sup­ply, sew­er­age, drains, roads, col­leges, hos­pi­tals, fire sta­tions, etc. These works are un­der­taken in the pe­riph­ery of the colony/area or out­side the colony/area and in­ter­nal de­vel­op­ment charges (IDC) are utilised to­wards works that are nec­es­sary in the in­ter­est of de­vel­op­ment of a colony such as met­al­ing of roads, sew­ers, etc.

Al­though de­vel­op­ers are re­quired to pay EDC and IDC to the lo­cal/ur­ban de­vel­op­ment author­ity/ body, they usu­ally re­cover the same on pro-rata ba­sis from prospec­tive buy­ers. As per cur­rent mar­ket prac­tice, most flat buyer’s agree­ments stip­u­late that the de­vel­oper would have the right to col­lect additional amounts to­wards EDC/IDC from prospec­tive buy­ers, in case of an en­hanced li­a­bil­ity to pay the same arises. The au­thor is a se­nior part­ner at Zeus Law, a cor­po­rate commercial law firm. One of its ar­eas of spe­cial­i­sa­tions is real es­tate trans­ac­tional and lit­i­ga­tion work. If you have any queries, email us at ht­es­tates@hin­dus­tan­times.com or ht@zeus.firm.in

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