Builders can't sell parking space

Today I am writing about this topic as even after this historic verdict from Mumbai High Court in April 2008,not many people are aware about it and they still pay money for parking to builder while buying the property.

In a major relief to thousands of flat owners, the Bombay High Court has ruled that builders or developers cannot sell open space in housing societies for parking. Disposing a petition filed by a housing society in Borivali against its developer, the HC has categorically made it clear that once the occupation certificate is issued by the relevant authorities and the society is registered, “the building as well as the stilt parking spaces, open spaces and all common amenities become the property of the society”. The builder/developer ceases to have any title on the same, the court stated. Justice BH Marlapalle, in a decision delivered on April 25, 2008 has even rejected the builder’s claim that flat owners in this case had given an undertaking giving up their claim on the open space. The HC order is significant given the number of similar complaints various consumer bodies and courts receive regularly. “It has become a practice now where builders charge flat owners for space which otherwise should have come to them as their right,” observed Mumbai Flat-Owners Association president Mahabaleshwar Morje, that has been fighting for flat-owners’ right.

In this case, the said builder at Borivali had locked open space within the stilt with collapsible gates and wanted to sell it to flat-owners in the building for parking. He had kept this open space under lock and key and prevented residents from using it. “This was totally illegal,” the HC stated. Since the space was covered from three sides, the builder had argued that these are garages and as such he can sell them as separate premises. He had also argued that these ‘garages’ do not form a part of the society’s ‘open space’ which should be made available to the society members.

The HC quoting Development Control Rules dismissed this claim and made it clear that the stilt area, even if it is enclosed, continues to be an open space and since the builder is not paying any separate property tax over it, his claim of it being a garage are not acceptable. “It is not an additional premises / area that he is authorised to sell either to any flat purchaser or to any outsider. It is a part and parcel of the society building and it cannot be a separate premises available for sale,” the court noted. The HC also rejected the builder’s claim that society members have given an undertaking giving up all rights on any open space while purchasing flats.

In a clear term, the Court noted that, “It cannot be presumed that every flat purchaser was in the know of the clauses of the model agreement and its binding nature. The builders tend to encash on this ignorance and seek all sorts of undertakings which are contrary to the provisions DC rules”. The HC in a definitive term has clarified that “any undertaking furnished by the flat purchasers cannot have a binding effect as it would be contrary to the guarantees available to the flat purchasers under the Act”. The HC rightfully noted that “(such undertakings) is an act which is forced upon by the developer and it is commonly known that if the flat purchaser refuses to furnish such an undertaking, he would be informed that the flat is not available for sale”.