Way back, on 31st August 2010, the Supreme Court of India ruled that a builder/ developer/ promoter (of flats/ group housing) cannot sell open or stilt parking area (meaning uncovered or covered parking space) once the owners’ society is formed, as the said space becomes a part of “common areas and facilities” of the Society.
The judgment was delivered by a bench of Justices R M Lodha and A K Patnaik in the case of Nahalchand Laloochand Pvt Ltd (a promoter from Mumbai) vs Panchali Co-operative Housing Society Ltd, subsequent to an appeal made by the former against a Mumbai High Court ruling. The promoter wanted to sell some unalloted car parking space in the building premises and the Society had opposed it, because of which the promoter went to Court.
The judgment goes on to observe that parking spaces in flats (includes open/ stilt/ podium/ basement or any other that is not enclosed on three sides) cannot be termed as ‘garages’ and therefore cannot be sold separately. However, “insofar 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.”
According to the Maharashtra Ownership Flats Act (MOFA), 1969, the promoter is supposed to describe ‘common areas and facilities’ in his advertisements as well as the ‘agreement’ with the flat buyer and the promoter is also required to indicate the price of the flat including the proportionate price of the ‘common areas and 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.”
Further, “As soon as the Corporation issues the occupation certificate and the Society is registered, the building as well as the stilt parking spaces, open spaces and all common amenities become the property of the Society. The stilt parking spaces cannot be put on sale by the developer as he ceases to have any title on the same.”
While the observations in this judgment interpret the legislative intent behind enacting MOFA, it can be extended to other similar state acts including the Karnataka Apartment Ownership Act, 1972. The full Supreme Court order can be seen here.
Based on this order of the Supreme Court, in September 2013, the Consumer Disputes Redressal Forum in Mumbai directed Tata Housing Development Company Limited to refund to the complainant, Rs 50,000 that it had collected as car parking charges, along with interest and compensation for mental agony. The full order can be seen here.
In October 2013, the Consumer Disputes Redressal Forum in Mumbai ordered Pediyar Associates (a builder) to pay compensation of Rs 5.25 lakh to a flat buyer for failing to provide him with a car parking space. The full order (in Marathi) can be seen here and news report (in English) here.
A point to note is that any clauses in the agreement with the builder that violate the law and associated acts are not enforceable by the builder and can be contested. In this context, most sale agreements will have an arbitration clause, which the builder will try to invoke. However, arbitration is not the only means of redressal, as per the order from the National Consumer Disputes Redressal Commission. Buyers can approach the Consumer Forum for relief. The order can be seen here.
So what does this all mean to the thousands of flat owners in Bangalore?
The builder cannot charge you separately for car parking. The cost of construction, i.e. the sq ft rate, (which apart from your apartment, includes the cost of common areas) should include one car parking space. If you look at your sale agreement, you may find that your builder has charged you anything from Rs 50,000 to Rs 5,00,000 separately for car parking.
If the builder has charged you for car parking, which is illegal as per the law, you could consider asking him for a refund quoting the Supreme Court order and the other rulings that serve as precedents.
If this fails, you could join a few active citizens in Bangalore who are working towards getting their money back. If any residents’ association or individual apartment buyer is interested, please write to Amitav Roy firstname.lastname@example.org who is coordinating this.
The Karnataka Apartment Ownership Act – 1972
Apartment management: Before the builder hands over
Occupancy Certificate? It is builder’s responsibility!
Overcoming the Occupancy Certificate hurdle to your dream home
Dear CM, please make Occupancy Certificates mandatory for registration of flats