Friday, October 23, 2015

Builders can’t sell common areas & amenities, Bombay HC

The Bombay High Court  (HC) recently clarified that the Promoter/developer has no right to sell any portion of the building which is not a flat  and the entire land and the building has to be conveyed to the society.The only right which remains with the promoter is to sell unsold flats .HC further observed that selling of common amenities like the basements, cellars, yards, gardens, parking areas and storage spaces is contrary to the development agreement and the provisions of development control regulations.

Photo courtsey http://1.bp.blogspot.com/

In pune and surrounding area sale, lease and commercial use of common amenities by builders’ promoters is common phenomenon, be it cooperative housing society, township, Special Township or any other complex. These people sale or lease common amenities or charge fees to the members for the amenities that are meant free for them. The recent judgement is setback to such activities.

Council for petitioner in this case submitted that those construction which were without consumption of any FSI were forming part of the common amenities and belong to the petitioner no.1 society for the benefit of its members and no interest of any nature whatsoever could be claimed by the respondent developer  in respect of such common amenities and thus no third party rights in respect thereof can be created by the respondent developer .
photo courtsey cruxcatalyst.com
In support of this submission, counsel placed reliance on the judgment of Supreme Court incase of Nahalchand Laloochand Private Limited vs. Panchali Cooperative Housing Society Limited (2010) 9 SCC 536 and in particular paragraphs 54 to 65 and submitted that the promoter has no right to sell any portion of the building which is not a flat and the entire land and building has to be conveyed to the petitioner. The only right which remains with the respondent no.1 is to sell the unsold flats and has no right to sell any stilt parking spaces or any area forming part of common amenities exclusive parking area allotted to the respondent developer under the said development agreement.

The Bombay high court through its order restrained a city builder from selling the common areas of a newly constructed building, Anand Villa, on Linking Road, Santacruz , Mumbai.In this case respondent developer  had created mortgage in respect of some part of the common amenities illegally along with three commercial shops. HC also restrained the respondent developer , their servants, agents and/or representatives and/or any other claiming by, from, through or under them are restrained by an order of injunction of this court from in any manner transferring, encumbering, alienating, or creating any third party right

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