HIGH COURT MATTERS - Cannot change plan of building if flat buyers say ‘no’

Kanchan Chaudhari

Builders and developers cannot amend plans or carry out additional construction without obtaining ‘informed consent ‘of flat buyers, the Bombay High Court said, recently.

“If the promoter wants to undertake additional construction, which is not part of the layout shown to flat buyers at the time of executing the purchase agreement, consent is necessary,” the court said.

Justice BR Gavai said flat buyers in Madhuvihar Co-operative Housing Society in Kandivli, would be deprived of amenities promised, if the developer –Jayantilal Investments –was allowed to go ahead with the additional construction.

The judge noted that the plan projected before the flat buyers was for 137 tenements but, subsequently, an additional building with the same number of tenements was sought to be constructed on an area that was shown as open area as per plans shown to flat buyers.

“Such a consent would have the effect of nullifying the purpose of the beneficial legislation (The Maharashtra Ownership of Flat Act – MOFA),”observed Justice Gavai.

The society was registered in January 1993, but the developer refused to convey the property saying it had not complied with the pre-condition of the conveyance—grant consent for additional construction.

Justice Gavai discarded the contention, and directed the developer to forthwith convey the property in favour of the society.



Rediff Business, October 23, 2007


Everybody wants a piece of real estate. The sector has been growing at 25-30 per cent a year since 2003, fired primarily by low interest on housing loans and the rising affluence of home buyers. Those who had bought stocks of real estate companies, whose valuations have gone through the roof, are a happy lot. However, the same cannot necessarily be said of scores of financially and emotionally bleeding home buyers. The developers play lord and master to middle-income individuals, who often live like monks to fulfill their dream of owning a house. Most sale agreements are heavily loaded in favour of builders in the currently unregulated market.

This disillusionment is reflected in the rise in the number of complaints that has accompanied the growth of the sector. In the first 25 days of August 2007, the Delhi-based National Consumer Helpline, a consumers' body, received 33 housing-related complaints. The Consumer Guidance Society of India (CGSI), Mumbai, says it gets two-three cases a day. In this scenario, what chance do you have of safeguarding your interests as a buyer?

In 1993, the Supreme Court ruled in favour of M.K. Gupta in his case against the Lucknow Development Authority for not delivering his flat on time. This landmark judgment brought housing construction under the purview of the Consumer Protection Act, 1986.

This, however, hasn't done much to change the unscrupulous ways of builders. Owing to the bonhomie between developers, the authorities and the contractors, projects get sanctioned easily but the quality of construction goes unquestioned. Supreme Court advocate C.M. Srikumar says: "Even in cooperative societies, the contractor, the
architect and the office-bearers of the society dupe the public."

Rahul Todi, managing director, Bengal Shrachi Housing Development, says: "Unlike other consumer products, here we sell a concept first. If there is a gap between expectation and reality, then we are not doing our job properly."

What are the most common games that developers play? Here are eight common tricks and ways in which you can guard against them.

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