Importance of DoD in RWA voting

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!