We have prepared these answers to questions arising in the minds of Flat Buyers / owners. It is also to create awareness about the Flat owners' rights.

Who owns the LAND on which the building consisting of flats are constructed.?

While buying the flat, we have paid for undivided share of Land vide a registered document. 100% of land is shared in proportion of the square feet area of the MCC approved flat we purchased. Therefore Land is owned jointly by all the legitimate flat owners. Flats approved in the building license- issued by the authority concerned- is the legitimate flat. Unathorised flats are not legitimate flats.

Who owns the Building?

We have entered in to an agreement with the builder to build flats in the proposed building. Therefore, builder/developer is appointed by us to construct the building for a price which is mentioned in the agreement. Therefore, builder/ developer is not the owner of the building. It is implied that builder / developer has to obtained necessary licence to construct the building and after completion he has to obtain completion certificate, door no. etc documents from the authorities and share with the all the flat buyers. This is as per the Karnataka Apartment ownership Act 1972.

What is the common area and who owns it?

All the flat owners are joint owners of entire common area by virtue of ownership of Land and the agreement to construct the building as per the law. Common Area include

1. Land on which building is located.
2. The Foundations, columns, girders, beams, supports, main walls, roofs / terrace, halls, corridors, lobbies, stairs, stairways, fire-escapes, entrances and exits of the building.
3. The basements, cellars, yards, gardens, car parking areas and storage spaces.
4. The premises for the lodging of persons employed for the management of the property.
5. Installations of central services such as power, light, gas, etc.
6. The elevators, tanks, pumps, motors, fans, etc and in general all the apparatus and installations existing for common use.
7. Such community facilities as may be provided for in the Deed of Declaration.
8. All other parts of the property necessary or convenient to existence, maintenance and safety, or normally in common use - transformer, generator, etc.

(The above is obtained from page no: 7 of KLJ publications book" THE KARNATAKA APPARTMENT OWNERSHIP ACT 1972. -2007 edition.)

While buying flats we have paid for Electricity connection, Water & Sewage connection, Registration charges in addition to the price of the Flat. Therefor all theinstalltion of these services are also owned jointly by all the owners of the flats.

Who owns Car-parks in a building complex?

Mangalore City Corporation (MCC) has issued license for construction of 36 flats in Apeksha Residency. We flat owners have purchased flats with undivided rights in entire land. Therefore entire land is sold to all the legitimate flat owners. We also paid the price for Flat and cost for service connection like electricity, water and sewage. Therefore, we flat owners own jointly the entire building complex. The licensing authority has given the license to build certain number of flats of certain size. Car Park is not a separate entity for sale. Only flats are saleable with the undivided share of land. This is very clear from the Supreme Court's Landmark Judgment in case no: CIVIL APPEAL NO. 2544 to 2456 OF 2010 Nahalchand Laloochand Pvt. Ltd. - Appellant Versus Panchali Co-operative Housing Society Ltd. -Respondent

(http://www.accommodationtimes.com/legal/a-recent-landmark-judgement-by-sc/)

As per the costing principle, total of construction cost for foundation, basement, ground floor , all the legitimate floors and terrace, compound wall, garden etc. are divided by the permissible area of total flats to obtain the per sq feet cost of construction. Profit is added to this while quoting the price. But in real estate, the price prevailing in the marked is very much higher than the cost of construction. Market price increases with time. Hence any delay in the completion of the building fetches the builder windfall of profit.

Separate price for car park can not be levied by the builder, however he may merge the flooring cost with the cost of flat. Flooring cost can not be exorbitant. It can not be sold as a piece of land as land belongs to all the flat owners, once the undivided share of land is registered.

Car Park is not considered for FAR calculations. Therefore, it does not attract property tax. Hance it is not owned by individuals. Car park is jointly owned by the flat owners - flat owners association. Any agreement with clauses contrary to the guarantees available to flat buyers under the Law, can not have binding effect. Even if the flat buyers have executed an agreement stating that flat buyers will not object to selling of stilt parking and open parking spaces by the promoter/builder, it can not be binding being contrary to the Law. Based on such agreement promoter has not acquired any right to sell stilt & open parking spaces.

In other buildings, some flat owners have two car park and some have not opted for car park. How is that?

Generally people are not aware of the law and some lawyers would give opinion favourable to builders as they get more (documentation) work from the builders. I have seen one agreement wherein, it is stated that flat owners have no right in the Terrace. This is contrary to the existing laws pertaining to KARNATAKA APPARTMENT OWNERSHIP ACT 1972. Hence such clause in the agreement is not valid in law. But people should be aware of it. Hence we are trying to create awareness among all the flat owners.

How can the builder sell some thing on the land which is jointly owned by us. Car park is restricted common area, hence it is jointly owned by all the legitimate flat owners. In our case-Apeksha Residency case, Builder has to obey the court order. Court order has not permitted builder to do any thing illegal. It is in his interest to gracefully accept the court order and be on the right side of the Law. We the flat owners are not ready to allow him to get away with the illegal things in the building.

Who decides the usage of car park?

Builder has a role to play in allotting the car park on the basis of first come first serve with allotment letter. Thereafter, if there is any further space available, only association or the society has the right to decide on the usage of the common areas. Problem comes when enough space is not available to accommodate for all the flat owners. To avoid such situation, licensing authority has norms on the open space as well as covered car park. That should be followed.

A News paper report obtained from HINDU's website.

Date:02/09/2010 RL:http://www.thehindu.com/2010/09/02/stories/2010090263011200.htm

Parking areas can't be sold as independent flats, units

New Delhi: The Supreme Court has ruled that builders/promoters cannot sell parking areas as independent units or flats, as the same is to be extended as "common areas and facilities" for the owners.

A Bench of Justices R. M. Lodha and A. K. Patnaik, in a judgement, rejected the argument of a real estate development company that they are entitled to sell garages/stilt parking areas as separate flats to owners who intend to use it as parking facilities

Common facilities

"If a promoter does not fully disclose the common areas and facilities, he does so at his own peril. Stilt parking spaces would not cease to be part of common areas and facilities merely because the promoter has not described the same as such in the advertisement and agreement with the flat purchaser.

"The promoter has no right to sell any portion of such building which is not 'flat' within the meaning of Section 2(a-1) and the entire land and building has to be conveyed to the organisation. The only right (that) remains with the promoter is to sell unsold flats.

"It is, thus, clear that the promoter has no right to sell 'stilt parking spaces' as these are neither 'flat' nor appurtenant or attachment to a 'flat'", Justice Lodha said.

The apex court passed the judgment while dismissing the appeal of the promoter Nahalchand Laloochand Pvt Ltd, challenging the Bombay High Court's ruling that under the MOFA (Maharashtra Ownership Flats Act), a builder cannot sell parking slots in the stilt area as independent flats or garage. - PTI

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