|
|
Important Questions and Answers
| Q.1 | What is the object and purpose of Maharashtra Ownership Flats Act, 1963 ? |
| Ans. | It has been brought to the notice of the Govt. of Maharashtra that on account of acute shortage of housing in several areas of the State of Maharashtra, there were certain mal-practices and difficulties in relation to the promotion and construction, sale and management, and transfer of Flats on the ownership basis. Some of the dishonest promoters and builders took undue advantage of the ignorance of common man. Some of the dishonest promoters and builders avoid to execute the documents as required under law and event if whenever the document were executed they avoided to include several important clauses in such a document. These promoters and builders kept certain control over the property for the future development. These dishonest promoters and builders also created problems while reselling flat on the basis of ownership. These promoters and builders also took the undue advantage of the steep rise in price of the Flats. It was therefore necessary to regulate the promotion, construction, sale, management and transfer of flats. |
| Q.2 | What precautions the purchaser of the Flat has to take before purchasing the flat ? |
| Ans. |
The Purchaser of the Flat is required to take care in collecting and in
ascertaining the following information :
|
| Q.3 | What are the terms and conditions that should be included in the agreement which is prepared by the promoter or the builder with the purchaser of the Flat ? |
| Ans. |
Several terms and conditions have been set out in section 3 of the Maharashtra
Ownership Flat Act, 1963. The agreement should include the following particulars
:
|
| Q.4 | Is it obligatory on the part of the promoter to make the full disclosure of the nature and title to the land on which the flats are constructed or to be constructed? |
| Ans. | Yes. The promoter is required to make full and true disclosure of the title of the land on which flats are constructed and or are to be constructed. Some times it is found that the land on which building is to be constructed is mortgaged in somebody else or the said property is in dispute. In such a case it may lead to further litigation. Normal practice is to take a search of the property for a period of 30 years from the experienced surveyor. The title to the property should be certified by an Attorney at Law or by an Advocate of not less than 3 years standing. If false certificate is issued the Attorney or the Advocate is liable for the action. |
| Q.5 | Is it obligatory on the part of the Builder to give information of area specified to the building? |
| Ans. | The promoter is bound to annex a copy of the plan along with the agreement. The promoter is also bound to give the specification of the building built or to be built on the land. Such a plan and specification should have been approved by the local authority. The promoter cannot make any alteration in the structure described in the plan in respect of the flat without the consent of the purchaser of the flat. Such act will be contrary to the provisions of Local Authority's Act. Such act would also be liable for punishment as per provisions of section 13 of the Maharashtra Ownership Flats Act. |
| Q.6 | Is it obligatory on the part of the builder to disclose the nature of fixtures, fittings and other amenities including the provisions of one or more lifts that are to be provided ? |
| Ans. | It is true that it is obligatory on the part of the builder to disclose the nature of fixtures and fittings and other amenities. It is very often noticed that in order to attract the purchaser of the flat better kind of material regarding the fixture, fittings and other amenities is mentioned in the agreement. However, while constructing inferior or second hand material is invariably provided in such cases the purchasers of the flats are entitled to make a complaint within a period of one year of putting them into possession. Such a complaint must be made to the Housing Commissioner appointed under the Bombay Housing Board Act, 1948. The flat owner can also prosecute the promoter and builder for not constructing the flat according to the agreement. As regards the lift it must be noted that the normal life of the life is supposed to be for about 35 to 40 years from the date of installation. The Purchasers of the Flats are not experienced or expert persons in as certaining the mechanism of lift, when the possession of the flat in the building is taken, great care should be taken in ascertaining whether the lifts provided are of good quality which can give service for 35 to 40 years Merely functioning the lift at the initial stage would not be sufficient. |
| Q.7 | Is it obligatory on the part of promoter/builder to disclose the date by which the flats will be handed over to the purchaser ? |
| Ans. | It is true that it is obligatory on the part of promoter/builder to disclose the date by which the flats should be handed over. If he fails to give possession in accordance with the terms of agreement of the flats duly completed by the specified date for the reasons beyond his control, further period of 3 months may be granted by consent. However, if he fails to deliver the possession even thereafter then the promoter may be held liable by making him to pay damages or compensation. It must be noted that the promoter is requested to obtain an accoupation certificate before putting the purchaser of the flat into possession. The purchaser of the flat cannot also take the possession of the flat without occupation certificate from local authorities. The promoter and the builder both of them are liable for the punishment. |
| Q.8 | Is it obligatory on the part of the promoter to prepare and maintain list of flats or their number to be taken or agreed to be taken and the names of members of the parties ? |
| Ans. | It is obligatory under sub-section (ix) of section 3 of the Act to prepare and maintain list of the flats with their number and also to state the names and addresses of the parties and the price charged and agreed to be changed. It is very often found that ficitious names are given by the promoter as the purchasers of the flats or it may also be found that one flat is booked in the name of more than one persons. It is the tendency also of that promoter to avoid to avoid to disclose the names of the persons and their addresses in order to avoid unity between the purchasers of the flats to flight against the injustice if any done by the promoter and builder. If the builder has not given the names of the purchasers he will be liable for punishment under section 13. |
| Q.9 | Whether the promoter can allow the purchaser of the Flat to enter into possession without obtaining the occupation certificate, it is done who is responsible for that ? |
| Ans. | Promoter cannot allow the purchaser of the flat to enter into possession of the premises unless the occupation certificate is obtained. The purchaser of the flat also cannot take possession of the flat until the occupation certificate is duly given by the local authority. If he does so it will amount to contravening the provisions of sub-section (1) of section 3 of the Maharashtra Ownership Flats Act and the provisions of Section 353A of the Bombay Municipal Corporation Act. Some times it is found that the purchaser of the flat out of dire necessity is allowed to use, occupy the flat although there are no provisions for electricity, water supply and in some cases even lift. But dire necessity cannot be said to be an excuse for committing the breach of the building bye-laws of the Municipal Corporation Act. The promoter will be liable for the punishment if he allows to occupy the flats without obtaining occupation certificate. |
| Q.10 | Is the promoter before accepting the advance payment or deposit bound to enter into an agreement in writing ? Is such an agreement required to be on stamp paper ? Is such an agreement required to be registered ? |
| Ans. | The promoter cannot accept any advance payment or deposit without entering into an agreement in writing. Even after entering into the agreement in writing the maximum amount he can take as advance or deposit is only 20% of the sale price entered into the written agreement for sale. Such an agreement is required to be duly stamped and it is required to be registered. In the absence of non-registration it was held not admissible under Evidence Act. This difficulty is removed by amendment to the Act. In a recent case the Bombay High Court has taken a view that if it is found that the promoter has taken the money without entering into an agreement in writing, the promoter can be prosecuted under section 4 read with section 13 of the Maharashtra Ownership Flats Act (Ref. Criminal Application No. 634 of 1981 decided on 23.12.198. Shupal Anna Bhairsheth and two others v. The State of Maharashtra and others). |
| Q.11 | Is the promoter required to maintain separate account of the sums taken an advance or deposit ? If he has not maintained such accounts what are the consequences ? |
| Ans. |
It is true that the promoter is required to maintain a separate account
of the amount taken in advance or deposit. It was found that taking into
account the ignorance of the purchasers of the flats, amount received in
the form of advance or deposit was used by the promoter for his private
business or in using the said amount to advancing as loan to other members
by charging exorbitant rates of interest.
The promoter is supposed to be the trustees of the amount received from the purchaser of the flat. The promoter is therefore required to maintain separate account of the sums taken as advance or as deposit. If the purchaser of flat doubts about maintenances of the accounts he can make a complaint to the State Government and the State Government if satisfied can appoint an officer for these purposes. Such an officer shall make inquiry in respect of complaints. The promoter is liable for the punishment if separate accounts are not maintained as required under Section 5 of the Act. |
| Q.12 | Who is responsible to pay the outgoing such as ground rent, municipal taxes and other local charges, water charges, electricity charges until the property is conveyed to the Society or to the Limited company or to other organisations ? |
| Ans. | According to section 6 of the Act the responsibility for making the payment of the outgoings till the property is transferred is that of the Promoter. The Promoter is required to pay all outgoings including the ground rent, municipal taxes, taxes, electricity charges, etc., until he transfers the property to the persons taking over the flat or to such organization as required under the law. Some times it is found that the promoter at the time of executing the agreement, or subsequently, collect the amount on account of outgoings including ground rent, municipal taxes, electricity charges, etc. but it is not paid to the appropriate authorities. When the taxes are not paid, there is a threat from the Municipal Corporation for auctioning the property and when the electricity harges are not paid there is a threat from the electric company to cut off the electric connection. In such cases the purchaser of the flat or the organization should pay the charges to the Municipal Corporation or to the electric company under protest and recover the same subsequently from the promoter. The purchaser of the flat also can take action against the promoter and his associates for not paying the taxes and electricity charges as per law. |
| Q.13 | Can the promoter make any alteration in the Plan or specification in the building without previous constant of the purchaser of the Flat ? |
| Ans. |
The promoter cannot make any alteration in the plan or in specifications
without the previous consent of the purchaser to the flat. The promoter
is required to disclose the plan and specifications at the time of entering
into the agreements. As specifically stated in sub-section (c) of Section
3 of the Act, the promoter is also prohibited from making any alteration
in the structure without the previous consent of the purchaser of the flat
(section 7 (1))
|
| Q.14 | What steps the purchaser of the flat can take in case the defects are found in the construction of the building or buildings? |
| Ans. | The promoter is required to construct the building as per the plan and specifications specifically approved by the local authorities as stated under sub-section (c) of Clause (ii) of Section 3. If the defects are found in construction of the building or buildings the purchaser of the flat is given right to lodge a complaint within a period of one year from the date of obtaining possession. Such a complaint should be lodged to the Housing Commissioner appointed under the Bombay Housing Board Act, 1948. The decision given by the Housing Commissioner in this respect shall be the final. The promoter and the builder can also be held liable for the damages or compensation for doing the defective work or they can be directed for doing the work according to the plan and specifications. |
| Q.15 | What steps the purchaser of the flat can take if he wanted to have the amount refunded in respect of purchase of the flat and what he can do if such refund is not granted ? |
| Ans. | The purchaser of the flat is entitled to refund of the amount with simple interest at 9% per annum from the date of the payment till the date of the amount is refunded to him. Some times it is found that the amount received in the form of advance or deposit is misused by the promoter or builder for their private business or for giving it as a long at exorbitant rate of interest to outsiders. In such cases the purchaser of the flat can take appropriate action the promoter or builder. The promoter will also be liable for punishment under section 13 of the Act if the amount is not paid. |
| Q.16 | Is it obligatory on the part of the promoter to take steps for formation of co-operative society or company etc. and if he fails to do so what are the rights of the purchasers of the Flat? |
| Ans. | The promoter is required to take all steps for the formation of the co-operative society as soon as the minimum number of persons, which is required to form the society, have taken the flats. The minimum number of persons required to form a society is 10. The promoter is required to submit an application to the Registrar for formation of a co-operative society or company within a period of 4 months from the date of which the minimum number of persons required to form such an organization have taken the flats. Some times it is found that although the moneys are collected by the promoter or a builder for forming a society, the money which includes the membership fees, share money and expenses for forming society, there is a deliberate delay on the part of the promoter or builder to form the society. Reason for avoiding to form the society is to deprive the members of the society certain benefits and privileges arising out of registration. Some of the promoters and builders are interested in having the control over the property as long as they could have the interest in the transfer of flat or other property of the society. If the Society is not formed or registered as required under Section 10 read with Rule 8 of the Ownership Fates Act, the promoter will be liable for the punishment. |
| Q.17 | What are the effects of forming a co-operative Housing Society and what are the privileges of such a Society ? |
| Ans. | The effect of incorporation of the society is, that it becomes a separate entity having separate existence apart from its members. A registered society has a perpetual succession. The succession, however, comes to an end on cancellation of the Registration. By virtue of registration, the Co-operative Societies enjoy certain privileges. Under Section 41 of the Co-operative Societies Act the exemption is granted for compulsory registration of instruments relating to shares and debentures of the society. Section 42 empowers the State Government to exempt the society from taxation in certain respect. Such exemption may be in the case of stamp duty, Court fees and other taxes specifically stated in section 42 of the Co-operative Societies Act. |
| Q.18 | What are the general liabilities of the flat owners ? Can a purchaser of flat refuse to become a member of the Society or company. What are the consequences ? |
| Ans. | Every person who has agreed to purchase a flat is required to make the payment at appropriate time and date. He is also required to pay his share of Municipal Taxes, electric charges and other charges in accordance with the agreement with the promoter. Some persons deliberately and dishonestly avoid to make the payment on the dates agreed. As a result it becomes difficult for the promoter to complete the construction. Some times the purchaser also avoids to become a member of the co-operative society or a limited company as the case may be. He cannot avoid to become member without reasonable cause. |
| Q.19 | What are the obligations off the promoter or builder in respect of completion of title and conveyance ? |
| Ans. |
The title to the property is the most important under Maharashtra Ownership
Flats Act. In order to safeguard the right of the purchaser it is made
obligatory on the promoter to make full and true disclosure of the nature
of the title of the land on which flats are constructed or are to be constructed.
The promoter is also responsible to have the certificate in respect of
the property duly certified by an Attorney At Law or by an Advocate of
not less than 3 years standing. The object is that maximum care should
be taken for ascertaining the legality of the title for the land so that
ordinary persons may not be put to inconvenience and they are not cheated.
Under Sub-clause (h) of sub-section (ii) of Section 3 it is also made obligatory to state in writing the precise nature of organisations of persons to be constituted and to which the title is to be passed and terms and conditions governing such organisations and person who have taken or should be taking the flats. Section 11 of the Ownership Flats Act makes it obligatory on promoters to taken necessary steps to complete his title and convey to the organisations which are registered either as the Co-operative Housing Society or as company as aforesaid or to an association or flat takers etc. Under Rule 9 of this Act, if so fixed period for conveying the title of the promoter is agreed upon the promoter shall execute the conveyance within four months from the date of which the co-operative society or that company is registered or as the case may be, the association of the flat takers is duly constituted. If the conveyance is not executed, the promoter will be held liable for imprisonment and fine as stated in section 13 of the Act. He can also be used for specific performance of the contract of conveying the property and may be required to pay the damages on account of his delay and failure to convey the title. |
| Q.20 | Can a manager of the building cut off or withhold water supply and if it is done what are the remedies for the purchaser of the flat ? |
| Ans. |
The essential supply includes supply of water and electricity, lights in
the staircases, conservancy and sanitary services. These services are necessary
for the occupants of flats to stay in the premises with satisfaction and
peace. No person who is the manager or who is in the charge of management
or connected with the management of the block or building can stop or withhold
the essential supply without justifiable and reasonable cause.
In this respect the provisions under Section 12 (a) of the Ownership Flats Act is some what similar to section 24 of the Bombay Rent Act. The aggrieved party can make an application to the Court for a direction to restore such supply as services, and in case the Court on inquiry finds that essential supply is cut off or curtailed or reduced by the Manager the Court can make an order, directing the Manager to restore such supply or services before a day to be specified in the order. If the Manager fails to restore the supply or service before the specified date he will be liable for fine which may extend to Rs. 100/-. Such an application can be made in Greater Bombay in the Court of Small Causes, Bombay or in any area for which a Court of Small causes is established under the provincial Small Causes Courts Act, 1887, to such a Court, and elsewhere the Court of the Civil Judge. A complaint can also be filed before the Metropolitan Magistrate or the Presidency Magistrate or First Class Magistrate and if the Manager is found guilty he will be liable for imprisonment which may extend upto a period of 3 months and a fine and/or both. |
| Q.21 | What are the new changes made in the definition under the Maharashtra Ownership Flat Act ? |
| Ans. |
The new amendment widens the definition of flats and in clause (a) after
the word godown the word or for carrying on any industry shall be inserted
and shall be deemed to have always been inserted.
In clause (a) add "have been duly entered in the property extract of the Village from VI, VII or XII or other relevant revenue record. Clause XII says that call upon the Promoter to display or keep all documents plans specifications or copies thereof referred to in clause (a), (b) and (c) at the site and permit inspection thereof intending to take or taking one or more flats. Clause (a) refers to the full disclosure of nature of title of the land on which flats are constructed. Clause (b) refers to making full and true disclosure of such encumbrance on such land and Clause (c) refers to giving the inspection on 7 days of notice of demand all plans and specifications of the building built or to be built on the land etc. Clause XIV - If the flats are advertised for sale the promoter is bound to give the particulars (a) The extent of carpet area of the flat including the area of the balconies should be shown separately;Top |
| Q.22 | It is necessary to have a prescribed form of an agreement when the agreements are entered into between the promoter and purchasers of the flat ? |
| Ans. |
Originally no form was prescribed. The promoters therefore drafted the
agreements which was more suitable to them. Some time it was found that
agreement included certain terms and conditions which were contrary to
the provisions of Maharashtra Ownership Flats Act and rules thereunder
and also contrary to the provisions of Maharashtra Co-operative Societies
Act and the Rules thereunder. Therefore, the new amendment have been made,
which has now prescribed the form for agreement.
According to the new form the agreement shall contain the particulars specified in clause (a) and to such agreement there shall be attached copies of the documents specified in clause (b) The particulars of the agreement shall include : Top |
| Q.23 | What happens if the promoter fails to pay all or any of the outgoings collected by him before transferring the property to the persons taking over the flats. Who is liable to pay for the expenses for the legal proceeding in that respect if any ? |
| Ans. | It must be noted that sometimes it takes time to take necessary steps for construction of the building and further to obtain necessary occupation and completion certificate. If also takes further time to transfer the property to the flat purchasers or to the organization in particular. In the process of doing so, the promoter though collects amount on account of outgoings which may be inclusive of ground rent, municipal or other local taxes he fails to pay all or any of the outgoings collected by him. In such circumstances, he will be held responsible he will be held liable, even after the transfer of the property, to pay such outgoings and panel charges and also will be held responsible for any legal proceedings which may be taken therefore by such authority or person. This new amendment would help the purchaser of the flat and also to the society to take necessary steps for the recovery of the amount which is collected by the builder but not paid to the municipal corporation and other authorities due and payable to them. |
| Q.24 | What are the provisions if any additional construction was made without previous consent of all the persons who have agreed to take the flat ? |
| Ans. |
It must be noted that some of the builders used to make additional constructions
without consent of the purchaser of the flat/or even if it was not mentioned
in the agreement.
Sometimes it was found that certain judgements decrease and orders were passed in respect of such additional structures without previous consent also should be deemed never to apply or to have applied in respect of the construction of any additional building or structures constructed or to be constructed under a scheme or project of development in the layout after obtaining the approval of a local authority in accordance with the building rules or building bye-laws or Development Control Rules made under any law for the time being in force. New Section 7(A) has been added for the removal of doubt under which declaration has been made that clause (ii) of sub-section (1) of section 7 having been retrospectively substituted by clause (a) of section of 6 of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) (Amendment) Act, 1986 (herinafter in this section referred to as "the Amendment Act"), it shall be deemed to be effective as if the said clause (ii) as so substituted had been in force at all material times; and the expression or construct any additional structures" in clause (ii) of sub-section (1) of section 7 as it existed before the commencement of the Amendment Act and the expressions "constructed and completed in accordance with the plans and specifications aforesaid" and "any unauthorised charge in the construction" in sub-section (2) of section 7 shall, not withstanding anything contained in this Act or in any agreement, or in any judgement, decree or order of any Court, be deemed never to apply or to have applied in respect of the construction of any other additional buildings or structures constructed or to be constructed under a scheme or project of development in the layout after obtaining the approval of a local authority in accordance with the building rules or building bye-laws or Development Control Rules made under any for the time being in force. |
| Q.25 | What are the punishments if promoter fails to comply with or contravenes certain provision of the Act ? |
| Ans. |
If the promoter fails to comply with or contravenes Section 3, that is,
if he fails to discharge his general liabilities mentioned in clause (a)
to clause (m) of sub-section 2 of section 3.
And of if he fails to comply with or contravenes provision of Section 4, that is, accepting advance payment or deposit from and or if he commits breach of Section 5 (save as provided in sub-section (2) of this section), 10 or 11 shall on conviction, be punished with imprisonment for a term which may extend to three years or with fine, or with both. It must be also noted that any promoter who commits criminal breach of trust of any amount advanced or deposited with him for the purposes mentioned in section 5 shall, on conviction be punished with imprisonment for a term which may extend to five years, or with fine, or with both. It must be also further noted that any promoter not registering it as required under the law in prescribed manner without entering an agreement in writing and or who, without reasonable excuse, fails to comply with, or contravenes, any other provision of this Act or of any rule made thereunder, shall, if no other penalty is expressly provided for the offence, be punished, on conviction, with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees, or with both. |
| Q.26 | An agreement for sale which is required to be executed under Section 4 of the Ownership Flat Act ?Where and when the agreement is to be registered and what are the provisions relating to the registration ? |
| Ans |
Section 23 to 26 of Indian Registration Act, refers to the provision relating
to place and time for presenting the document for registration. It states
that subject to certain provisions, it should be presented within four
months from the date of its execution.
Section 23-A refer to re-registration of certain documents. Section 24, refers to the documents executed by several persons at different times, Section 25 refers to the provisions when the delay in presentation is unavoidable. This Section gives discretionary power to the Registrar to direct or to refuse to direct that the documents presented for registration shall be accepted for registration. The Court cannot interfere with the discretion of the Registrar. While considering the provisions relating to the place and time for registration it must be noted that sub-section 2, is added to Section 4, which validated certain agreements which were not presented for registration within the prescribed time. The said sub-section validated the agreement which were presented for registration on or before 31st December 1984. Though such agreement were not presented within the prescribed time of registration. A provision is added to the sub-section (ii) which stated that on presenting a document for registration as aforesaid if the person executing such document does not appear before the registering officer and admit the execution of the document, the registering officer shall cause a summons to be issued under section 36 of the Registration Act requiring the executant to appear at the registration Officer, either in person or by authorised agent, at a time fixed in the summons. |
| Q.27 | What are the effect of non registration of agreement required to be registered ? |
| Ans. |
It must be noted that the division bench of the Bombay High Court has taken
the view that the registration of agreement under Section 4 is mandatory
in the absence of which specific performance was not possible, it was held
that in the absence of registrations of agreement it will not be admissible
(Association of Commence House Block Owner Ltd. V/s Vishandas 83 B.L.R.p.339).
As a result of this judgement, no suit can be filed for the specific performance
of the contract in the Civil Court under Section 13 of Maharashtra Ownership
Flat Act. Subsequently, a judgement is now delivered by Bombay High Court
in case of Abdul Jabbar Ibrahim, wherein it is held that there is no Association
(83 B.L.R.p.33) for proposition that promoters written agreement duly executed
by him and registered under the provisions of Indian Registration Act.
In Abdul Jabbar Ibrahim, Justice S.N. Khatri has held that on plain interpretation
of the language of Section 4, 5, 7, 10 and 11, it is clear that the penal
liabilities for breach of these provisions will flow oven in cases where
the agreement if reduced to writing remains unregistered (Ref. 85 Mah.
L.J.163).
|
| Q. 28 | What are the provisions regarding the Parking under the Maharashtra Ownership Flat Act? |
|
The building bye-laws and development control rules for the Municipal Corporation
for 1888 refers to the various provisions regarding the parking spaces.
It refers to what way the parking space can be provided to the residential
as well as to the lodging establishment, touring home, hotels with accommodation
to educational institutional assembly, government and semi-government private
building and mercantile and industrial storage, etc. However, this
article refers only to the residential premises as stated below :-
The parking space is broadly divided into two areas, i.e. posh areas and other areas. The posh areas includes Malabar Hill, Cumbala Hill, Reclamation area, including reclamation of Juhu, Vile-Parle, Sassoon Dock, and Nepean Sea area and rest of the city area, suburb and extended suburb. Each off-street space provided for Motor Vehicles shall not be less than 25m x 5m area, and for scooters and cycles the parking spaces provided shall not be less than 3 sq.m. and 1.4 sq.m respectively.
|
|
| IMPORTANT JUDGEMENTS | |
| Unauthorized
Construction
Pratibha Co-operative Housing Society V/s. D. M. Sukhtankar 1986 CT J 95 & 1992 CTJ 274, AIR1991SC 1453 Overriding
D. C. Rules
No
Blanket Consent
Maternity
Home
Tenancy
Nomination
Power
of Registrar
Builders
cannot take advantage of their own wrong
Responsibility
of Lawyer
|
(MAHABALESHWAR
MORJE)
Gen.
Secretary.
© Copyright 2002, The
Flat Owner's Association, Mumbai.
Updated on 19th April 2002