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Is Noida allowing builders to cheat you of your space?

Some developers are claiming ownership over common areas, contrary to the terms of the UP Apartment Act

realestate Updated: Jul 18, 2013 15:01 IST

Is the Noida Authority violating the Uttar Pradesh Apartment (Promotion of Construction, Ownership, and Maintenance) Act, 2010? The answer could be yes as the authority is the first party to the sublease deeds executed by developers in favour of partment owners in Noida. The deeds state that the common areas (lifts, parking space, clubs etc) in the apartments are owned by the developers. This goes contrary to the act, which states that such spaces belong to the RWAs (resident welfare associations) of the housing societies. The involvement of the authority in signing the deed is mandatory as it owns all the land in Noida, Uttar Pradesh.

Land in Noida is leased out to real estate developers who after building apartments sulease them to home buyers. They (the developers) have to take the permission of the Noida Authority for sub-lease because the authority is the ultimate landowner. When developers execute a sublease deed in favour of the apartment owners, three parties are involved in the transaction - Noida Authority (the first party that owns the land), a real estate developer (who gets the land on lease from the Noida Authority) and the home owner (to whom the developer subleases the flat with the authority’s permission).

Many such deeds executed by developers deny the apartment owners any right over common areas and claim these are the developers’ property (see box).

Now the question is : How can the Noida Authority be party to a document which clearly violates the legal provision of the state?

“Noida being a statutory authority and an active stakeholder in the UP Apartment Act 2010 cannot be party to any document that expressly violates any of the provisions of the public policy. When a public policy is there to define and decide what ‘common areas and facilities’ are, there is no reason for Noida Authority to allow the same to be decided by the developer,” says SK Pal, a Supreme Court lawyer.

Pal adds, “The earlier 1975 and the 2010 Acts give a comprehensive list of ‘common areas and facilities’ which include park, community centre, pumps, sewer line, plumbing line, common passage, fire refuge area, columns, etc. Broadly, the legislators envisaged common assets as all those assets that are required for the existence of the owners/inhabitants in a condominium.”

Apartment owners are an angry lot. “We are losing both money as well as our rights. When we buy flats, we pay duty for its registration on the basis of super area which includes carpet area and the common area. So how can developers claim ownership on the common area?,” asks Prakash PVS, RWA official of a society in Noida.

“If homebuyers oppose this clause, the developers refuse to execute the sublease deed and without this document homebuyers don’t get ownership rights,” adds Prakash.

Another disputed issue between homebuyers and developers is the collection of money to maintain common areas. “If we go by the clause that gives common area ownership to the developer, the RWA will never have any say in its maintenance. The developer will collect the maintenance without being accountable to anyone. While the UP Apartment Act is clear that it is the joint responsibility of the promoter and homebuyers to from an association of all the residents and once the association comes into existence, the management of the affairs of the apartments regarding their common areas and facilities shall be deemed to be transferred from the promoter to the association. How is it possible when the sublease deed is just contrary to that?,” asks Ashish Kaul, an RTI activist.

Many RWA members allege that they have raised the issue with the Noida Authority several times by pointing out that the particular clause is violating of their legal rights but no officer is willing to pay any heed to them.

Though HT Estates made calls to senior Noida Authority officials, no one was willing to comment on the issue.