When it comes to real estate, disputes over ownership and possession are not uncommon. A recent legal battle in Chennai, India highlights the complex web of legalities that can arise in the world of real estate and construction. This ruling sets a significant precedent for future development projects, emphasizing the importance of transparency and fairness in the calculation of ownership and sharing of common areas and amenities.
“The justices of Abbotsbury Owners Association in Chennai have ruled that once a common area is developed, it will belong to the owners of the common facility.”
In this case, Ramaniyam Real Estate Limited had built 77 flats in 2001 on a piece of land, with plans to construct a 2 lakh sq. ft. software technology park. However, those plans never came to fruition.
Instead, the company built a separate structure in the common area and sold it to another party for non-residential use. This prompted the flat owners to file a Writ Petition, seeking ownership of the newly constructed building. The division bench agreed, stating that the non-FSI area could not be sold. They went on to say that the sale made by the builder was “in violation of the planning permission granted.”
The flat owners claimed that the disputed area was considered a common facility as part of the non-FSI construction and therefore belonged to them. They accused the builders of attempting to transfer this area to others without the proper ownership being conveyed to the apartment buyers.
Despite this, the builders stated that since the land ownership was not fully transferred to the apartment buyers, the flat owners are not entitled to claim ownership of the non-FSI structure.
Nevertheless, the court accused the builder of misleading the purchasers, stating that the formula used for calculating the undivided share of the land was incorrect. The court noted that the proper way of calculating the undivided share is to divide the land area by the total constructed area and then multiply that number by the size of the individual apartment.
The Final Verdict
The court saw a fallacy in the argument made by the builder and the purchaser and ruled in favor of the flat owners’ association. The court declared that the builder misled the buyers by utilizing an incorrect formula to determine their portion of the shared land.
The builder was instructed by the court to execute rectification deeds for the undivided share (UDS) in favor of each flat owner, and the individual flat owners must bear the cost of any stamp duty related to such rectification. In addition, the Chennai Metropolitan Development Authority (CMDA) was mandated to immediately transfer ownership of the building to the flat owners’ association, and the rectification deeds must be completed within three months.
Overall, this ruling serves as a reminder for buyers to be vigilant in their property purchases and to thoroughly check the UDS and other essential details before finalizing the purchase.
The court’s decision to resolve the matter in favor of the flat owners is a positive step towards protecting their rights and ensuring the proper transfer of property ownership.
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