Dear Friends,
As we all know that the Supreme Court has in a recent judgement given Developer's, the ownership rights of community and commercial facilities, which is going to make life difficult for all apartment owners. The impact on us is devastatingly huge; the real purpose of owning a flat in a township is defeated if all common areas and facilities would be owned by the Developer, who would just pass on usage rights to apartment owners, therefore as an absolute owner, the Developer would for life maintain those areas by charging apartment owners at his whim & fancy.
Both Hindustan Times and TOI have covered this sad story today. I request you to kindly go through it and please come forward to fight for your propriety rights, if we do not stand up now to fight than we might allow the Builders to remain perpetual owners of our land. We should not concede defeat just yet, lets get united and fight to RECLAIM OWNERSHIP...
A
BATTLE LOST FOR APARTMENT OWNERS?
The recent Supreme Court judgment giving a
developer ownership rights over community and commercial facilities is going to
make life difficult for lakhs of apartment owners in Gurgaon
We are
of the view that the High Court has committed an error in directing the DTCP to
decide the objections of the apartment owners...
- SC ruling
BK Dhawan, a 75- year-
old resident of Silver Oaks, Gurgaon, isi a disappointed man today. He has lost
a 20-year-old legal battle against real estate developer DLF for residents’
rights over community and commercial facilities within the Silver Oaks complex
– a campaign which has all but consumed his finances and energies.
THINKSTOCK
The Supreme Court, in a
much-awaited judgment, which may have far-reaching consequences for the real
estate sector in Haryana, has held that apartment owners can’t claim undivided
interest in community and commercial facilities aas these belong to the
developer.
The judgment impacts
lakhs oof families living in housing projects in Haryana where ownership over
common areas and facilities has remained a bone of contention between
developers and apartment owners. The latter also argue that by virtue of being
in a dominant position, the developers are likely to misuse and twist the
judgment to suit their own needs. “A developero can lease or sell community and
commercial facilities such as club, nursery schools, conveniencec shops and
community centre in a group housing project to any third party who will run
these facilities for making money and who will have no concern for the needs
and requirements of the apartment owners. There is also no clarity on what the
community and commercial facilities include,” says Dhawan, who bought his
Silver Oaks apartment in 1991 and got the possession in 1995 after a two-year
delay.
“In 1996, when we came
tot know that the developer planned to sell the community and commercial
facilities, we decidedd to go to court because we believe these facilities are
a part of the common area and meant for the apartment owners. It’s the right of
the apartment owners to lease out community and commercial facilities and
maintain them by earning money by leasing out the facilities. The Punjab and
Haryana High Court had given its verdict in our favour but the apex court has
overruled that. It’s a big setback for the flat buyers of Haryana, especially
in Gurgaon ,” says Dhawan.
The Silver Oaks
Condominium Association (SOCA) and other residents who contested the builders’
ownership claim over community and commercial facilities argued that the real
estate regulation acts in Haryana – The Haryana Development and Regulation of
Urban Areas Act, 1975, and The Haryana Apartment Ownership Act, 1983 – give
apartment owners rights over common areas and facilities, which include
everything from corridors, lobbies, staircases, lifts etc to community
facilities such as nursery schools, shops, community centres etc.
According to the SOCA
members, once the project is complete the developer is legally bound to file a
declaration before the director, town and country planning, with details of
land, buildings, apartment numbers and everything that exists within the
housing complex.
Except for the dwelling
units over which apartment owners have exclusive rights, anything which exists
in the complex is part of the common area and facilities in which flat buyers
have undivided interest. They also argue that according to the Apartment Act,
the developer should hand over the ownership, administration and management of
these facilities to the association of homebuyers.
“In our plea we cited
legal provisions as well as practical problems we would face if the developers
were given rights over community facilities. We told the Hon’ble court that the
developer got the license to sell only residential units and, therefore, could
not sell shops and schools as that would be interpreted as sale of commercial
entities. Secondly, the Haryana Apartment Ownership Act talks about common
profits – the balance of all income, rents, profits and revenues from the
common areas and facilities remaining after the deduction of the common
expenses. So what will be the source of the RWA’s income if the schools, clubs,
shops and other facilities are owned by the developer? We tried to convince the
court that these provisions suggest that the intent of the legislature is to
give apartment owners rights over community and commercial facilities,” says
Amit Jain, director general, Federation of Apartment Owners Association in
Gurgaon.
Examining Section 3(3) (
a ) ( iv ) o f the Haryana Development and Regulation of Urban Areas Act, 1975,
the SC says that the ownership of the colonizer cannot be transferred or
divested, unless the colonizer volunteers to transfer the same free of cost to
the government.
The apex court further examines Section 3(f)(7) of the Haryana
Apartment Ownership Act, 1983 and says, “No duty is cast on the colonizer to
give an undivided interest over those community and commercial
facilities exclusively to the apartment owners of a particular
colony, since the same have to be enjoyed by other apartment owners of DLF
City, Phase I, II and III as well.” Silver Oaks is part of a large colony of
130 acres.
Besides these provisions, the Supreme Court has also taken into
consideration the builderbuyer agreement, the license format etc and holds, “In
a given case if the developer does not provide common areas or facilities like
corridors, lobbies, staircases, lifts and fire escape etc. the competent
authority can look into the objections of the apartment owners but when statute
has given a discretion to the colonizer to provide or not to provide as per
Section 3(f)(7) of the Apartment Act the facilities referred to in Section 3(3)
(a)(iv) of Development Act, in our view no objection could be raised by the
apartment owners and they cannot claim any undivided interest over those
facilities except the right of user.”
TIMES OF INDIA REPORTS;
Flat owners not ‘owners’
OF COMMON FACILITIES
The Supreme Court has ruled in a landmark
judgment that a colonizer must provide schools, hospitals, community
centres, and other community buildings in group-housing complexes, and that
the land over which these facilities are raised belong to the colonizer.
PRABHAKAR SINHA writes
In a landmark judgment, the Supreme Court ruled
that a colonizer has “undivided interest” in common areas and facilities
including schools inside a housing complex.
The judgment says, “...the ownership right over the
land earmarked for schools, hospitals, community centres and other
community buildings referred to in Section 3(3)(a)(iv) of the Development
Act of Haryana vests on the colonizer.”
The judgment will have a far-reaching implication
in the development of townships.
The judgment says, “The colonizer has to provide
those facilities in discharge of its legal obligations under the
Development Act and the Act itself has recognized its or his legal
ownership over the area set apart for those facilities under Section
3(3)(a)(iv) of the Act.”
The judgment further clarified the contentious
issue and says, “All the same, the right to enjoy those facilities referred
to in Section 3(3)(a)(iv) of the Development Act, whether shown in the
declaration or not, under the Apartment Act, cannot be restricted or
curtailed and the apartment owners have no other right, except the right of
‘user’. Community centres, nursery schools, shops, etc, therefore, being
part of the approved layout plans by the Director, Town and Country
Planning, Haryana (DTCP), can be used by the apartment owners and, being
part of the larger colony, are intended for independent use of all the
apartment owners having direct exit to common areas, to the public street,
road, etc.”
The judgment further says that so far as apartment
owners are concerned, they have only a right of user, so far as the
facilities provided under Section 3(3)(a)(iv)
of the D eve l o p m e n t Act are concerned.
The judgment also ruled that a colonizer is legally
obliged to construct at his own cost the community and commercial
facilities stipulated in the section and
an agreement has to executed by the colonizer with the DTCP under the
Development Act, which among other provisions, prohibits the colonizer from
recovering the cost of providing those facilities from the apartment
owners.
The Supreme Court’s decision came on the plea of
DLF Ltd against the order of the state high court that appreciated the
rights of flat owners of Silver Oaks Apartments, DLF Qutub Enclave, Phase
1, in Gurgaon, over community and commercial facilities inside their
housing complex and had asked the authorities concerned to take a call on
their objection.
In the judgment, the high court noted that
community and other facilities like schools, hospitals, community centres,
shops, etc, provided in the land set apart under Section 3(3)(a)(iv) are
meant for the benefit of the entire colony and not for the apartment owners
in one part of the colony and the costs incurred in discharge of the
statutory obligations cannot be passed on or transferred from the plot
owners or apartment owners by the colonizer.
The facilities to be provided under Section
3(3)(a)(iv) are based on the prescribed norms which are populationbased and
the number of each type of amenity and its placement at various places in
the colony (plotted areas or group housing) are, as per the layout plans
duly approved by the DTCP under the Development Act, the order says.
The DTCP has prescribed the requirement for each
amenity and commercial facility for DLF City Phase I, II & III,
comprising a total area of 1,542 acres,
under a composite layout plan of all the three phases, treating three
phases as a single colony.
As per the approved layout plan, these amenities
are earmarked at various sites in the colony, some in the plotted areas and
some in the group-housing areas.
In so far as the present case is concerned, the
court said that the layout plans pertaining to lands covered under various
licences in the colony are not restricted to 130 acres alone (Silver Oaks
Group Housing project is on 14.75 acres). The judgment further said that
the option given to the developer to construct the community centres and
other community buildings at his own cost is when he can utilize it himself
and manage it.
The court also explained the difference between
“common areas and facilities” and “community and commercial facilities”. It
says, “A colonizer is duty-bound to provide all the common areas and
facilities as per Section 3(f), except community and commercial facilities
referred to in Section 3(f)(7).”
“Common areas and facilities” referred to in
Section 3(f)(7) of the Apartment Act has a correlation with the “Community
and Commercial facilities” referred to in Section 3(3)(a)(iv) of the
Development Act. The court said the expression “may” used in Section
3(f)(7) of the Apartment Act clearly indicates that no duty is cast on the
colonizer to give an undivided interest over those community and commercial
facilities exclusively to the apartment owners of a particular colony,
since they have to be enjoyed by other apartment owners of DLF City, Phase I, II & III as
well. Even otherwise, the colonizer could not have parted with his
ownership rights exclusively to one colony alone.
The judgment said that each apartment owner shall
be entitled to an undivided interest in the common areas and facilities in
the percentage expressed in the declaration and such percentage shall be
computed by taking as a basis the value of the apartment in relation to the
value of the property.
Common areas and facilities shall also remain
undivided and the apartment owner or any other person can use the common
areas and facilities in accordance with the purpose for which they are intended
without entering or encroaching upon the rights of other apartment owners.
Apartment owners are entitled to an undivided
interest in the common areas and facilities in the percentage expressed in
the declaration, within the meaning of Section 3(f) (1) to (6) and (8) and
it is also open to the colonizer to provide, at his own cost, the community
and commercial facilities referred to in clause 7 of Section 3(f) read with
Section 3(3)(f)(iv) of the Development Act by including them in the declaration.
The colonizer cannot also, under certain
circumstances, confer any undivided interest to an exclusive set of
apartment owners to the detriment of similar apartment owners, who have
apartments in other phases of a larger colony or city. Apartment owners
are, therefore, not entitled to an undivided interest or possession over
those community and commercial facilities, referred to in Section
3(3)(a)(iv) of the Development Act, unless specifically provided by the
colonizer in the statutory declaration.
The court also indicated that the ownership right
over the land earmarked for schools, hospitals, community centres, and
other community buildings referred to in Section 3(3)(a)(iv) of the
Development Act vests in the colonizer. That ownership can be divested, as
already indicated, by the colonizer through a declaration under Sections 11
to 13 read with Section 3(f) of the Apartment Act.
The colonizer has to provide those facilities in
discharge of his legal obligations under the Development Act and the act
itself has recognized its or his legal ownership over the area set apart
for those facilities under Section 3(3)(a)(iv) of the act.
All the same, the right to enjoy those facilities
referred to in Section 3(3)(a)(iv) of the Development Act, whether shown in
the declaration or not, under the Apartment Act, cannot be restricted or
curtailed and the apartment owners have no other right, except the right of
“user”.
Community centres, nursery schools, shops, etc,
therefore, being part of the approved layout plans by the DTCP, can be used
by the apartment owners and, being part of the larger colony, are intended
for independent use of all the apartment owners having direct exit to
common areas, to the public street, road, etc. All those facts would
indicate, so far as apartment owners are concerned, that they have only a
right of user, so far as the facilities provided under Section 3(3)(a)(iv)
of the Development Act are concerned.
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