The Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Sale, Management and Transfer) Act, 1963

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  Flats on ownership basis when to be constructed makes it obligatory for the promoter to give information to intending owners on matters as set out therein. It is to be noted that non-obstinate clause makes this obligation overriding. Sub-section (2) sets out particular matters required to be informed to the intending owners.
It must also be noted that intending owners were already occupants of premises may also enter into transactions with a person who undertakes to develop the property for constructing flats and/or blocks. Further, intending owners also may want to get title to their properties. It is for this reason that it is obligatory to inform to the intending owners the title, etc. as certified as set out. Revenue record pertaining to the land/building in question have also to be informed as required under sub-section (a). Further, full and true disclosure of all burdens on the land or building shall have to be informed as set out in sub-section (b) to the intending owner.
Details of construction, etc. as set out in sub-sections (c), (d) and (e) require to be furnished to the intending owner.
Intending owners are also required to be informed as to terms and conditions as well as other particulars pertaining to the flat and/or block and the date of possession to be given to the intending owner.
  Sub-section (h) of section 3 (2) requires a promoter to state the precise nature of the society to be formed and to which the title is to be given as more particularly stated therein. In this, it is pertinent to note that rule 10 of The Co-operative Societies Act requires sub-classification of housing societies which may have relevance for these provisions.
  Sub-section (i) requires completion certificate under municipal law duly allowing occupants to occupy the premises.
  Sub-section (j) and (k) requires disclosures of outgoings as also of other documents and other matters as set out therein.
  Sub-section (l) requires display of the documents, plans, specifications, etc. as set out therein.
  Sub-section (m) prescribes that when flats are advertised for sale, the extent of the carpet area inclusive of balconies, etc. as set out and the price including the proportions for common areas, etc. and the nature extent and description of the common area and facilities and to common areas.
It has been found that while undertaking development projects, the promoter and/or the builder incur violations of the rules pertaining to development as set out by local authorities. These violations get many a time reflected and are visited upon the intending purchasers after they occupy the premises. Such malpractices at times used to result in shrinking of common facilities as also of usable areas as also of facilities. Further, the conditions imposed by the local authorities, if ignored can also visit consequences on the premises affecting the occupants. With a view to obviate such difficulties, the obligations such as are mentioned in section 3 are enacted. The obligations per se make violations actionable when they affect the occupants. This, therefore, is a deterrent factor which makes it prevalent that violations do not take place.
  Agreement for sale of flat – payment of earnest money by plaintiff – No payment of installments as documents of title of defendant not shown to plaintiff – Sale of flat to defendant No. 5 – Challenged – objection by defendant that oral agreement regarding production of certificate of title was after thought – Held, evidence of plaintiffs has gone unchallenged. It is but natural for plaintiffs to withhold payment till defendants satisfied him their title to plot and entitlement to make construction on said plot. Showing existence of certificate of title or marketable title in favour of defendants was statutory requirement under provisions of section 3 of Ownership Flats Act. Jeetmal Mangalchand Sakhlecha & others v/s Neelkanth Building Corporation & others 2004(6) Bom.C.R. 303; 2004 (3) All.M.R. 288
  Charges under—Validity—Promoters of building agreeing to construct building and thereafter hand over flat to petitioner—Wilful refusal to deliver possession of said flat to petitioner—Promoters selling said flat to other party—Agreement not registered—Held, it could not be said promoters could not be prosecuted on ground that agreement was not registered. Promoters could be charged with offences of criminal breach of trust or cheating or any of offences under Ownership Flats Act.
  Where the promoters of the building who agreed to construct the building and thereafter hand over the flat to ‘A’, had refused to deliver possession of the said flat to ‘A’ and they could not be prosecuted for the offences under sections 406, 409. 420 read with section 34 of I.P.C. and sections, 3,4,5,9, read with sections, 13,14 of Ownership Flats Act on the ground that the agreement between promoters ‘A’ was not registered under  the Registration Act and since the agreement was not registered, the agreement had become void and therefore, no party could claim any right therein. It may be that certain civil rights of the parties under the agreement which has become void may come to an end. The criminal liability of a party, however, will not be extinguished. A from the entire transaction between the parties. The oral representations made by one party to another or written documents besides the Agreement may amount to an offence. In a specific case the charge of cheating may depend upon the transaction apart from the Agreement which remained to be registered. Therefore, it could not be said tat the promoters could not be charged with the offences of criminal breach of trust or cheating or any of the offences under the Ownership Flats Act. Pradeep Bhupatrai Vasa v/s Bombay Builder Pvt. Ltd. & others 1987(1) Bom C.R.327
  Building permission and sanction plan – Permission granted only for ground floor – Construction carried out upto 7 floor, agreement executed with all flat purchasers and possession handed over – Held, Act enacted for executing an agreement for sale of flat. Law provides inspection of section plan before execution. No leniency required to show to professional builder/appellant who has handedly proceeded with illegal construction of seven floor. Leela Enterprises v/s Bombay Municipal Corporation & others 2006(2) Bom.C.R. 368; 2006 (6) AIR(BomR) 142

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