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Homebuyers will be ‘exploited’

Legal experts and RWA representatives say that developers in Gurgaon are likely to misinterpret SC's ruling on ownership of community and commercial facilities like club, nursery schools, convenient shops etc in a group housing project

realestate Updated: Dec 16, 2013 17:15 IST

Legal experts and RWA representatives have differing opinions on the Supreme Court’s interpretation of the relevant provisions on common areas and facilities in both the Haryana Development and Regulation of Urban Areas Act, 1975, and the Haryana Apartment Ownership Act, 1983.

While some experts are of the view that the apex court has struck a balance between the rights of the RWAs and developers, others argue that the judgment will be used by the real estate developer to exploit vulnerable homebuyers.

Gurgaon residents have been having problems. Anjali Jain, the a resident of a group housing project, says, “There is a school in my complex which the developer sold to an educational institution years ago. The monthly fee is R25,000, an amount that just 2% of the residents can afford. While our children go to other schools far away, students from far flung areas who can afford to pay the fees come here.”

The complaint of another resident is that the “Supreme Court hasn’t given a definition of what the community and commercial facilities will include. Now the developer can take stake claim to our parks arguing that it is a community facility. This could happen even to the temples and similar community services.”

And what happens if, as per the judgment, the developer gets to control the convenience shops in a residential complex? “Our experience shows that lots of such shops have been closed and turned into other profitable ventures such as property dealerships, beauty parlours, fast food eating joints etc. The residents have to go out of their societies and travel to distant places to buy things of basic need,” says Ashish Kaul, an apartment owner in Gurgaon.
Residents of The World Spa, a group housing project in Gurgaon’s Sector 39 & 40, have reasons to worry. A few years ago hundreds of residents fought against the developer for rights to the community club. “Now after the judgment the developer can take back the club and lease it out to anybody or run it on his own to make money. What if he charges an exorbitant amount both for membership and monthly usage? We will suffer, outsiders will enjoy the benefit and the developer will make money,” complains a resident.

Highlighting a few grey areas in the real estate regulation acts of Haryana, Santosh Paul, a Supreme Court lawyer who appeared for the residents of Silver Oaks, says, “The government of Haryana needs to amend laws along the lines of the Maharashtra Ownership Flats Act (MOFA), which gives ownership rights over everything that exists in the complex to flat owners. There is no ambiguity in the MOFA while real estate development acts in Haryana are full of grey areas.”

Mukul Rohatgi, senior advocate who appeared for DLF in the case, contradicts Paul, saying, “Every state has made real estate laws according to its own housing requirements. So is the case with the state of Haryana. I don’t see any issue with the real estate development acts.”

Rohatgi adds, “If the residents feel aggrieved because of a nursery school leased out to expensive educational institutions, they can complain to the education department. If the convenient shopping centers are not used for the purpose for which they are constructed, the residents can complain to the competent authority. However, these violations don’t mean that the rights of colonizers will be curtailed. Developers don’t charge money from flat buyers to construct community and commercial facilities. I think the judgment is a balancing act between the rights of the flat buyers and builders.”

Kaul, in response, says, “If we have go to the court for everything, then we will spend the rest of our lives fighting in court.”

First Published: Dec 16, 2013 16:55 IST