Builders can not sell stilt parking areas – Supreme Court

By Legal Cell

Though the news is old but in a case of an argument of a real estate development company that they are entitled to sell garages or stilt parking areas as separate flats to owners who intend to use it as parking facilities, a bench of Justices A K Patnaik and R M Lodha of Supreme Court, ruled that builders or promoters cannot sell parking areas as independent units or flats as these areas are to be extended as “common areas and facilities” for the owners.

The court passed the judgment while dismissing the appeal of the promoter, Nahalchand Laloochand Pvt Ltd, who challenged 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 garages. The apex court accepted the argument of the flat owners of Panchali Co-operative Society in Dahisar (E) that even if they had entered into any prior agreement or contract with the builder that they would not lay any claim on the parking areas, the same would not have any legal sanctity.

the court also disclaimed the appeal of the promoter that by treating these parking spaces as common areas, every flat purchaser in any case will have to bear proportionate cost for the same even if he may not be interested in such parking space at all.

Justice Lodha wrote in the judgment that the promoter has no right to sell any portion of such building which is not a ‘flat’ within the meaning of Section 2(A-1) and the entire land and building has to be conveyed to the organization. The only right that remains with the promoter is to sell unsold flats. Thus, it is clear that the promoter has no right to sell stilt parking spaces as these are neither flats nor apartments or attachments to a flat.

It is necessary for a promoter to fully disclose the common areas and facilities. Stilt parking spaces are usually not described as the part of the common areas. The same as such does not appear in the advertisement and agreement with the flat purchaser.

So far the said promoter is not put to any prejudice financially by treating open parking space/stilt parking space as part of common areas since he is entitled to charge a price for the common areas and facilities from each flat purchaser in proportion to the carpet area of the flat,” the apex court said.