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Can car parking be sold under RERA?
Ravi Singh, 30, recently got the possession of his 3BHK flat in Greater Noida. The developer had made him cough up Rs 2 lakh for an open parking space which, under RERA, now forms a part of the common area. Under the new law, can developers sell parking space to home buyers?
The RERA or Real Estate (regulation and development), Act, 2016, under section 2(y) defines ‘garage’ as a place within a project having a roof and walls on three sides for parking any vehicle, but does not include an unenclosed or uncovered parking space such as open parking areas.
This is also for the first time that the Act explicitly defines common areas which include open parking area, basement, stairway, elevators, lobby area and parks.
Haryana RERA executive director, Dilbag Singh Sihag says that a developer is fully entitled to `sell covered parking but open parking cannot be sold. “If a developer has spent money on making a parking area then he would want to recover that money,” is his reason.
“RERA and MahaRERA only speak of covered parking space but the rules do not include open parking. Therefore, open parking area is not covered under the rules,” says senior Mumbai-based lawyer Dipan Merchant.
“This aspect has also been covered by MahaRERA’s FAQ No 9, wherein it has been stated that open parking area is included in the definition of common areas which need to be conveyed to the Association of Allottees after receiving OC and hence sale or allotment of open parking areas by promoters is not permissible,” says Sudip Mullick, Partner, Khaitan and Co.
Explaining further, Mullick adds that the FAQ No 9 permits sale of a garage as is defined in the Act and also sale of a covered car park as defined under the Maharashtra RERA Rules. “Open car parking cannot be sold under RERA, only garages can be sold,” he adds.
Further, the Ministry of Housing & Urban Poverty Alleviation, Government of India vide its FAQ’s dated 17 January 2017, clarified that in accordance with Section 2 (n) of the RERA Act, common areas include open parking spaces and thus, open car parking spaces cannot be sold to allottees.
Adding to this, Rahul Nahar, Founder, Xrbia Developer says that the draft model agreement published by RERA specifically covers consideration for covered parking but “it cannot be sold in isolation”.
Section 2 (n) of RERA defines common areas while 2 (n)(iii) defines open parking areas while Section 17 says the promoter is liable to transfer to the society title in the common areas and to handover the possession of common areas to the society which presupposes that it cannot be sold to an individual allottee.
But, what about stilt parking? Does it come under the definition of garage or common areas?
The Supreme Court in the matter of Nahalchand Laloochand Private Limited v/s Panchali Co-operative Housing Society Limited (2010) 9 SCC 536 has held that under Maharashtra Ownership of Flat Act, 1963, observed that the stilt area cannot be treated as a garage. The court further observed that parking areas (open to sky or stilted portion) cannot be excluded from the common area and facilities under MOFA.
In view of the definition of open to sky parking area or stilt portion usable as a parking space is not a garage within section 2(a)-1 of MOFA. The court observed that it is not saleable independently as a flat or along with the flat. “The Bombay High Court had also laid down a similar norm in a judgment. Stilt parking and open parking slots were not treated as garage, and the logical inference was that these could not be sold as a separate, saleable unit,” says Naredco president Dr Niranjan Hiranandani.
It is pertinent to note that RERA does not repeal MOFA and provisions of MOFA apply to the extent not contrary to RERA, adds Merchant.
Anshul Jain, Managing Director (India), Cushman & Wakefield, says that open parking areas form part of the common area, hence, can’t be sold but stilt parking does not fall under the ambit of garage. “Garage can be sold to the buyer independent of the apartment/unit.”
Stilt parking comes under the category of covered parking, says Hiranandani. Adding to this, Hardeep Sachdeva, Senior Partner, AZB and Partners, says, “The RERA rules in some states such as Haryana, Rajasthan and Maharashtra have recognized the concept of stilt/ covered car parking being provided along with the apartment/unit in the draft of the agreement to sell.”
Hence, we may conclude that open car parking is a part of common areas but garages can be sold under RERA. The jury is still divided on stilt parking.
