One
of the most striking features of UP Apartment Act 2010 is the mandatory Deeds
of Declaration (DOD) from the builder that discloses in writing the building(s)
as well as the entire parcel of land to the residents
The recent Allahabad High Court order in the Purvanchal Silvercity II,
Greater Noida, case has once again brought the Deeds of Declaration (DoD) in
focus. Hon’ble Justice Suneet Kumar ruled that elections in the residential
complex will be strictly based on DoD. So in case you thought the election to
the apartment owners association was as simple as one person from one flat
casting his/her vote, think again. The truth is each resident’s voting share
depends on the size of the flat he occupies, besides the undivided share in
common areas. Loosely translated, it means if you own a big size flat, your
voting share will be more than your pal who lives in a smaller apartment. But what
exactly is a DoD and why is it so important? It is basically the document by
which the builder admits in writing (true disclosure) of what is built on site.
It includes area statements regarding the apartments, common areas and
facilities, independent and limited common areas and facilities and the details
of the materials used for construction. It’s vide the Deed of Declaration that
the builder also ‘conveys’ the building(s) as well as the entire parcel of land
to the residents. It’s an important piece of document because it tells
homeowners the exact layout plans of the plot and the promoter cannot change the scheme
without the written consent of all the allottees. It also
means that the apartment owners association also can’t decide with majority vote
to build a temple or any other structure on common area without everyone’s
consent. Just to add, none of the Noida developers have submitted a DoD to the
authority. Neighbouring Indirapuram residents will also recall getting notices
by the Ghaziabad Development Authority (GDA) in September last that their flats
will be seized unless DoD were submitted to the civic agency. The notices took
homeowners by surprise as the so-called deeds had to be submitted by their
housing societies, not individual flats. But for the GDA, the move to serve
individual notices was perhaps meant more as a pressure tactic. It worked, too,
as developers of more than 50 housing societies quickly submitted the deeds. But why does the builder need to
submit it to the authority?
The Backgrounder: Housing
is a necessity for all human beings and it’s the government’s responsibility to
provide shelter to all its citizens. However, the government being constrained
by resources looks towards private developers to construct group housing
complexes and condominiums by which everyone benefits – the citizens, the
government (revenues by plot auction, FAR sale and stamp duty) and obviously
the builders. We all know that the development authority is allotted land by
the state government for urban development as per the approved master plan,
which comprises residential, commercial, institutional, recreational, sports
and green areas. The areas meant for residential development is auctioned at
lower rates vis-à-vis area earmarked for commercial development. It is,
therefore, expected that private builders will construct group housing projects
and hand over the management of the buildings and parcels of land to the
residents, represented by the Association of Apartment Owners or Residents
Welfare Associations, and move out of the condominiums.
The
provision for Deed of Declaration is stipulated under Section 12 of the UP
Apartment Act, 2010, and governed under Rule 3 of the UP Apartment Rules, 2011,
and it can only be amended with permission of Competent Authority under Rule 4
of 2011 Rules. The Hon’ble Allahabad High Court passed a landmark judgment under Civil
Misc. Writ Petition 33826 of 2012 on 14.11.2013, which ironed out the creases
for effective and expeditious implementation of 2010 Act in the state. The court
has comprehensively dealt with the Deed of Declaration subject within the 14 conclusions
it has drawn in paragraph 65 of the order.
Residents’
Rights
1. The Deed
of Declaration is a must for securing the following rights of every resident:
a) Land
Rights – i.e., undivided rights over parcel of land;
b) Voting
Rights – proportionate to the builder’s sale deed value of the apartment (not
the subsequent sale deed value).
2. Covered
Area compliance: area mentioned in declaration and sale deed should be same. In
case builder has erred, it can be amended under Rule 4 and only by consent of
residents, the amendment can be finalized by the competent authority. For
obvious vested commercial interests, builders will not willingly submit the Deed
of Declaration. However, it is in the interest of residents that under the
provision of UP Apartment 2010 Act and the High Court judgment, the development
authority and the builder can be compelled to submit the declaration and
protect the apartment owners’ statutory rights.
True disclosure of the project
According
to the UP Apartment 2010 Act:
(2) Declaration has to be filed by
all promoters within 12 months from the date of approval of building plan and
within 90 days for constructed or under-construction buildings.
(3) Promoter cannot change the
scheme without the written consent of all the allottees.
(1) The ‘competent authority’
includes vice chairman of the development or the collector of the district. In
case of the industrial development authority the competent authority shall be
the chief executive officer (CEO) of the industrial development authority.
(2) For the purposes of discharging
functions and duties and resolving the disputes the competent authority will be
entitled to delegate its powers to an officer not below the rank of joint
secretary, including legal advisor of the authority and any sub divisional
magistrate of the district in case of a district.
(3) The competent authority will
also be entitled to verify the contents of the declaration under Section 12 of
the UP Apartment Act, 2010, and to decide any question, which may arise out of
such declaration.
(4) Any dispute raised before the
competent authority shall be decided by the competent authority or delegatee as
provided above or his delegatee as provided above, to be decided by the officer
notified by the state government under Section 27 (2) and (3) of the Act,
before it is brought before the Court of law.
(1) After the enforcement of the UP
Apartment Act, 2010, no builder, promoter can resist/ or delay the formation of
association of apartment owners under Section 14 of the Act.
(2) If the promoter does not get the
association registered, the apartment owners can get it registered after a
notice giving some time to the promoter and adopt model bylaws. In this case
the registrar of societies shall not refuse the registration of the association
of the apartment owners.
(3) The promoter, however, has to be
made a member as he is jointly responsible with the apartment owners to form an
association. Even if he does not get the association registered and does not
join or his authorised agents subscribe to be members of the association, he
will be deemed to be member of the association for the purposes of enforcement
of the Act as the promoter being the member of the association has duties and
liabilities under the Act which he has to enforce.
(1) Promoters will have to disclose
all details of the project and common assets to buyer before allotment.
Competent Authority
About formation of AOAs
Conclusion:
The Deed of Declaration is as important and valuable as the apartment
sale deed. Since we residents pay as per ‘Super Area’, value for money for the
apartment flows via the undivided land rights and voting rights over the entire
parcel of land on which the group housing project is constructed. The 2010 Act
and Hon’ble High Court has provided substantial rights to the residents, which
needs to be effectively used to seek value of our hard earned money!
