Tag Archives: Apartment

Remedy to An Allottee — Under RERA Act

In terms of Section 18 of the RERA Ct, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the project. Such right of an allottee is specifically made “without prejudice to any other remedy available to him”. The rights so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed. The proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the project. In that case he is entitled to an must be paid interest for every month of delay till the handing over of the possession. It is up to the allottee to proceed either under Section 18(1) or under proviso to Section 18(1). Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783.

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Development Agreement

The expression “development agreement” has not been defined statutorily. In a sense, it is a catch all nomenclature which is used to describe a wide range of agreements which an owner of property may enter into for development of immovable property. As real estate transactions have grown in complexity, the nature of these agreements has become increasingly intricate. Broadly speaking, (without intending to be exhaustive), development agreements may be of various kinds:

  • An agreement may envisage that the owner of the immovable property engages someone to carry out the work of construction on the property for monetary consideration. This is a pure construction contract;
  •  An agreement by which the owner or a person holding other rights in an immovable property grants rights to a third party to carry on development for a monetary consideration payable by the developer to the other. In such a situation, the owner or right holder may in effect create an interest in the property in favour of the developer for a monetary consideration;
  • An agreement where the owner or a person holding any other rights in an immovable property grants rights to another person to carry out development. In consideration, the developer has to hand over a part of the constructed area to the owner. The developer is entitled to deal with the balance of the constructed area. In some situations, a society or similar other association is formed and the land is conveyed or leased to the society or association;
  • A development agreement may be entered into a situation where the immovable property is occupied by tenants or other right holders. In some cases, the property may be encroached upon. The developer may take on the entire responsibility to settle with the occupants and to thereafter carry out construction;
  •   An owner may negotiate with a  developer to develop a plot of land which is occupied by slum dwellers and which has been declared as a slum. Alternately, there may be old and dilapidated buildings which are occupied by a number of occupants or tenants. The developer may undertake to rehabilitate the occupants or, as the case may be, the slum dwellers and thereafter share the saleable constructed area with the owner.

When a pure construction contract is entered into, the contractor has no interest in either the land or the construction which is carried out. But in various other categories of development agreements, the developer may have acquired a valuable right either in the property or in the constructed area. The terms of the agreement are crucial in determining whether any interest has been created in the land in favour of the developer and if so, the nature and extent of the rights. Sushil Kumar Agarwal v. Meenakshi Sadhu, 2018 (131) ALR 756.

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Uttar Pradesh Apartment Act – Common Expenses

Common expenses are of two kinds : one, general common expenses incurred in running, maintaining the common areas and facilities which is referred to as the Annual Maintenance Contract (AMC), second type of expenses declared as expenses for which the resolution of the general body of the association is required, therefore, every and any kind of expenses cannot be included in the Annual Maintenance Contract, therefore, any default in payment of such expenses would not debar a member from participating in the election. It is only the common expenses which being the Annual Maintenance Contract which is paid by the residents/apartment owners would be entitled to participate in the activities of the association including elections. Resident Welfare Association v. State Of U.P., 2016 (114) ALR 404.

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