TRANSFER OF ENTIRE PROJECT LAND INCLUDING ALL COMMON AREAS AND FACILITIES UNDER REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
1. With the coming of The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the Act or RERA, 2016) all matters relating to real estate projects fall within the ambit of the Act, one of them being the concept of common areas. As per the Act, portions of the project are to be treated as common areas and also have to be dealt with accordingly as regards the transfer of their ownership and maintenance. The common areas are defined under Section 2(n) of the Act as follows:
“common areas” mean-
(i) the entire land for the real estate project or where the project is developed in phases and registration under this Act is sought for a phase, the entire land for that phase;
(ii) the stair cases, lifts, staircase and lift lobbies, fir escapes, and common entrances and exits of buildings;
(iii) the common basements, terraces, parks, play areas, open parking areas and common storage spaces;
(iv) the premises for the lodging of persons employed for the management of the property including accommodation for watch and ward staffs or for the lodging of community service personnel;
(v) installations of central services such as electricity, gas, water and sanitation, air-conditioning and incinerating, system for water conservation and renewable energy;
(vi) the water tanks, sumps, motors, fans, compressors, ducts and all apparatus connected with installations for common use;
(vii) all community and commercial facilities as provided in the real estate project;
(viii) all other portion of the project necessary or convenient for its maintenance, safety, etc., and in common use”
2. From the very definition of the term common areas, it can be made out that the entire project land is deemed to be the common areas along with all the common amenities and facilities in the project except covered car parking areas, garages which have been excluded from the purview of the definition of the common areas while open car parking areas have been included.
3. Before commencement of the Act, the law governing the real estate projects was The Karnataka Ownership Flats Act, 1972 (KOFA) which regulated promotion, management and sale of the real estate projects. Although KOFA prescribed how the project has to be dealt with, it did not specify which are the common areas in the project. Under Section 3(f), other than the requirement of executing the Deed of Declaration to declare which are the common areas and limited common areas in the project, there was no prescription as to how common areas are to be dealt with.
4. Under the Act., Section 17 which deals with transfer of title and rights as follows –
“ (1) The promoter shall execute a registered conveyance deed in favour of the allottee along with the undivided proportionate title in the common areas to the association of the allottees or the competent authority, as the case may be, and hand over the physical possession of the plot, apartment of building, as the case may be, to the allottees and the common areas to the association of the allottees or the competent authority, as the case may be in a real estate project, and the other title documents pertaining thereto within specified period as per sanctioned plans as provided under the local laws: Provided that, in the absence of any local law, conveyance deed in favour of the allottee or the association of the allottees or the competent authority, as the case may be, under this section shall be carried out by the promoter within three months from date of issue of occupancy certificate. (2) After obtaining the occupancy certificate and handing over physical possession to the allottees in terms of sub-section (1), it shall be the responsibility of the promoter to hand over the necessary documents and plans, including common areas, to the association of the allottees or the competent authority, as the case may be, as per the local laws: Provided that, in the absence of any local law, the promoter shall handover the necessary documents and plans, including common areas, the association of the allottees or the competent authority, as the case may be, within thirty days after obtaining the occupancy certificate.“
requires that the undivided proportionate title in the common areas be conveyed to the Association of Allottees and the physical possession of the common areas also be handed over to the Association of Allottees. In effect, what is required is that as against the requirement of conveyance of the undivided interest as stipulated under the KAOA Act, 1972, by virtue of the special enactment i.e., RERA the common areas should be conveyed and physical possession of the same should be handed over to the Association of Allottees. In other words, with the coming into force of RERA, it is now unlawful to convey the undivided share to an allottee since the entire common areas which means the entire project land along with amenities and facilities are required to be conveyed and physical possession be handed over to the Association of Allottees.
5. The question regarding conveyance of the common areas came before the Hon’ble High Court of Orissa in W.P. (C) No. 18799/2021 in the case of Bimalendu Pradhan Vs. State of Odisha & Others in which it has been held as under on 12th May 2022–
“It is, therefore, plain that the Registering Authority is bound to refuse to register an instrument for transfer of immovable property the ‘alienation or transfer of which prohibited at any State and Central Act’. With the RERA Act mandating that the transfer of common areas should only be effected in favour of an Association of Apartment Owners, sale deeds presented for registration which contain clauses contrary thereto cannot be allowed to be registered by the IGR. It should not be difficult, therefore, for the IGR to issue instructions that Section 22-A of the Registration Aft, 1908, shall be strictly complied with by all the registering authorities in Orissa.”
In view of the Act defining common areas of a real estate project as the entire land of a real estate project along with all the amenities and facilities and requiring the same to be conveyed to the Association of Allottees and handing over physical possession of the same, it now becomes mandatory for the prescription under Section 11(4)(e) to be mandatorily followed by a promoter of a project which means a promoter should facilitate formation of the Association of Allottees and also comply with the requirement of Section 17 by transferring the common areas to the Association so formed.
6. In conclusion, the undivided interest proportionate to saleable or carpet area of an apartment which are hitherto being conveyed to individual allottees under the conveyance/sale deed, cannot be now transferred/conveyed to the allottees and the same has to be mandatorily transferred to the Association of Allottees as provided under the provisions of Section 17 of the Act.
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ADDENDUM :
In the write-up the full TEXT of the HC Judgment, found available on the website of livelaw.in, has not been reproduced or considered.
The operative portions thereof read as under:
Q
11. The Court is confident that a solution can be found by the Authorities by reconciling the two contrary statutory enactments viz., the Odisha Apartment Ownership (Amendment) Rules 2021 and the RERA Act and the Rules there under. The Court directs that, in the meanwhile, the IGR will strictly enforce Section 22-A of the Registration Act, 1908 as inserted by Registration (Odisha Amendment) Act, 2013 and ensure that sale deeds registered hereafter strictly abide by the provisions of the RERA Act and Rules made thereunder.
12. For considering the further arguments of the parties and awaiting the outcome of the deliberations between the State Government and the ORERA, list on 22nd June, 2022. The interim order passed earlier shall continue till then.
(Dr. S. Muralidhar)
Chief Justice
( R.K.Pattanaik)
Judge”
UQ
It is thus noted that then the issue was left in concluded. Further development, if any, after the listed date of 22nd June 2012 is not readily known; must be worthwhile finding out.
courtesy
^…the listed date of 22nd June 2022″< correct and read !
ADMN Suggest to report the TEXT of the HC Judgment (citation not given) for the readers’ benefit !
Dear Sir,
We have updated the case Information.
To ADD: The HC has in handing down its ‘opinion’ – so also the writer of the ‘article’ ,- seem to have entirely gone by the provisions of the legislative enactment governing ‘FLATS’; conveniently overlooking the separate enactment governing ‘APARTMENTS’. Further, since the coming into force of RERA , its underlying scheme of things, so also ‘in terms’, ONLY the latter mentioned enactment governing ‘APARTMENTS’ is of relevance and sole application.
BaCk /OVER to >>>>
READ Para 5 AND 6 “held as under– “It is, therefore, plain that the Registering Authority is bound to refuse to register an instrument for transfer of immovable property the ‘alienation or transfer of which prohibited at any State and Central Act’. With the RERA Act mandating that THE TRANSFER OF COMMON AREAS SHOULD ONLY BE EFFECTED IN FAVOUR OF AN ASSOCIATION OF APARTMENT OWNERS, SALE DEEDS PRESENTED FOR REGISTRATION WHICH CONTAIN CLAUSES CONTRARY THERETO CANNOT BE ALLOWED to be registered by the IGR. It should not be difficult, therefore, for the IGR to issue instructions that Section 22-A of the Registration Aft, 1908, shall be strictly complied with by all the registering authorities in Orissa.”
Had the very fine but subtle certain distinction between the two different legal concepts been duly addressed, would not the court come to just an opposite conclusion; more so, had it been borne in mind that 'buyers' and 'their association' are not two but one and only one and the same 'person' !?