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Your builder cannot take you for a ride

Residents’ consent is mandatory to modify building plans, says the Allahabad High Court in a landmark judgment that irons out the creases in the UP Apartment Act.

realestate Updated: Dec 05, 2013 15:49 IST

The recent Allahabad High Court ruling on the Uttar Pradesh Apartment (Promotion of Construction, Ownership, and Maintenance) Act, 2010, has made Abhinav Jain a happy man. Peeved at the delay in delivery of his sixth floor apartment in a group housing project, Meadows Vista, in Raj Nagar Extension, Ghaziabad, Jain had carried out his own investigations to discover that the builder had made amendments in the original building plans. Outraged by the fact that he was not getting what he had been promised by the builder, Jain filed a plea with the HC, seeking more clarity on the Apartment Act.

Jain had bought his apartment in 2007. Though delivery was promised on April 2010, the developer, Value Infracom India P Ltd, had applied for amendments in the building plans of 2007 approved by GDA in 2010.

“The amended plan was approved by the GDA after the UP Apartment Act came into force. It’s important to note that the Act prohibits amendments in original building plans after the original plans have been released and construction permissions have been granted,” says Jain.

The HC clarity on the Apartment Act has come as a huge relief for Jain and a number of petitioners fighting cases on matters related to floor area ratio (FAR - regulation controlling building size and the ratio of the plot and the total floor area of the building which stands on it) violations, resident welfare association-developer disputes and completion certificates.

“With thousands of buildings under construction in the state of UP, specially in the National Capital Region falling within the areas of the state of UP, it is expedient to clarify the provisions of the Act and to iron out the grey areas for the enforcement of the Act,” the court has said.

Benefits of purchasable FAR for flat owners

The judgment comes as a big blow to both the development authorities and the builders. There have been more than 20 group housing projects with hundreds of apartments in Noida and Ghaziabad embroiled in various court cases.

Highlighting his case, Jain says, “First the developer gets the original building plan sanctioned from a development authority and then sells apartments, promising buyers parks and open green views from balconies. When the project is almost complete, the developer gets the building plan amended with approvals for construction of additional apartments and areas. So, not only does possession get delayed, even the open green areas give way to concrete towers,” he adds.

Agreeing to Jain’s petition against the developer’s project plan changes, the HC has held that the FAR or any additional FAR is a property, appended to rights in the property on which the building is constructed. It is thus a property in which the apartment owners have interest by virtue of the provisions of the UP Apartment Act, 2010.

“The purchase of additional FAR is not permissible to be appropriated by the promoter without any common benefits to the apartment owners. The consent of the apartment owners obtained by resolution in the meeting of the apartment owners by majority will be necessary for purchasing additional FAR. Its utilisation will also be subject to the consent of the apartment owners,” the HC has said

Elaborating on this, Supreme Court lawyer SK Pal, who appeared for Jain and other RWAs in court, says, “The judgment has made two things very clear. First, if a builder has allotted flats in an under-construction group housing project, he must take the consent of all the allottees before he alters the original plan.

Second, if the developer has already given possession in the project, let’s say he has completed 60% of the project and given flat ownership to the allottees, he has to take the consent of the majority of flat owners. Benefits from the new FAR also have to be divided among all the flat owners.”

Completion certificate a must

Developers not getting completion certificates for their projects will also be penalised, the Allahabad High Court has said in its ruling on the UP Apartment Act. They do not get the certificates as it enables them to not follow the sanctioned building plans and construct illegal flats and offer possession.

Living in buildings for which completion certificates have not been acquired gives rise to multiple problems for the residents. Quite a few cases have been taken up with the HC. One relates to the deputy registrar refusing to register the Olive County RWA without a completion certificate. In another case, the Sun Tower RWA challenged the delay in completion of the Sun Tower buildings and Shipra Suncity project by GDA and Shipra Estate Ltd. This happened eight years after allotment and constructing new buildings by availing of additional FAR beyond the base FAR of 1.5 without the consent and NOC of the allottees.

The HC has observed that a provisional certificate will be issued for registration of societies till a completion certificate was obtained by the builder. “The completion of all infrastructure services and completion certificate from local authority will not be a ground to deny the registration, as the issuance of completion certificate depends on the steps to be taken by the promoter. The delay caused by him in obtaining such certificate will defeat the object of formation of the society and the enforcement of the rights and liabilities of the promoter and the apartment owners. In such case the society will be registered provisionally under the certificate to be given by the competent authority as defined in Rule 2 (C) of the Act, who will give a time period to the promoter to provide all infrastructure services and to obtain completion certificate, failing which the promoter will invite the punishment for the offence as prescribed under Section 25 of the Act, including the punishment of imprisonment under Section 25 (1) of the Act.”

Developer can’t deny declaration, handing over of common areas

One of the most striking features of UP Apartment Act is the ‘declaration’ of a building and deed of an apartment. The Act makes it mandatory for every developer after constructing the project to disclose the title of land, building plan, number of apartments etc to the competent authority. The same disclosure would be enclosed with the transfer deed (deed of apartment/sale or sub-lease deed) while handing over possession of the apartment to the owner. The Act also makes it mandatory for the developer to hand over common areas and facilities to the association of apartment owners upon its creation. As a matter of fact, it is deemed transferred when the association is registered.

The HC has held that “Common areas and facilities are deemed handed over to the association after adopting the model by laws.“ Contrary to this, in the Designarch Infrastructure Pvt Ltd vs vice chairman, GDA, the developer raised the matter of violations in formation of RWA and refused to hand over the common areas and facilities to the association. The developer also questioned the authority of the delegatee (special officer) to pass orders on behalf of vice chairman GDA. The promoter submitted that it was not obliged to hand over the common assets to the RWA because it had members who were not ‘owners’ till the RWA adopted the model bye-laws.

“For the purposes of discharging functions and duties and resolving the disputes the competent authority will be entitled to delegate its powers to an officer not below the rank of joint secretary, including legal advisor of the authority and any sub divisional magistrate of the district in case of a district,” the high court has held.

Fight for your rights

Finally, as a consumer you must ask yourself: Is your builder planning to add more floors to your building? Worried that it will put additional pressure on infrastructure already creaking under heavy loads? Anguished at the thought of concrete towers around your building when you had initially bought into a housing project which promised views of green open spaces?
If you are living in an NCR area in Uttar Pradesh, you can take action against a builder who has modified building plans after you moved into an apartment in his project.