In the landmark case of Nahalchand Laloochand v. Panchali Co-op Housing Society [2010 INSC 563], the Supreme Court ruled that open or stilt parking spaces are “common areas” intended for the use of all residents.
Consequently, these spaces cannot be sold as independent units. In practice, these areas must be handed over to the housing society and shared among the apartment owners.
Builders are required to include the cost of common parking in the total price of the flat. Buyers should not be charged extra for these spaces beyond the amount specified in the sale agreement. Charging separately for an open or stilt parking slot is considered an unfair trade practice.
Distinction Between Private Parking and Shared Parking
A distinction exists between private parking and shared parking in the law and that is as follows:
- Private Parking: A fully enclosed garage or designated basement parking shown on the approved plan is treated as a private spot. Developers may sell these separately if they are clearly defined in the building plan.
- Shared Property: Open parking is recognized as shared property. Any attempt to sell it separately is illegal. Builders must disclose all parking details in the plan and can only charge extra for truly private spaces.
The Legal Framework in Kerala
In Kerala, builders and promoters are legally prohibited from selling common areas, as these belong collectively to the apartment owners.
The above principle is reinforced by the Kerala Apartment Ownership Act, 1983, the Real Estate (Regulation and Development) Act, 2016 (RERA), and various Supreme Court judgments.
Under these laws, common areas include the land, staircases, lifts, lobbies, fire escapes, entrances, basements, gardens, parks, play areas, and open parking spaces.
Section 6(4) of the Kerala Apartment Ownership Act explicitly states that the “undivided interest” in common areas cannot be separated from the apartment itself. The Act reads:
“The percentage of the undivided interest in the common areas and facilities shall not be separated from the apartment to which it appertains, and shall be deemed to be conveyed or encumbered with the apartment even though such interest is not expressly mentioned in the conveyance or other instrument.”
The Kerala High Court, in Babu P.T. v. Sub Registrar and Others [2020:KER:25193], emphasized that common areas are deemed to be transferred along with the apartment, regardless of whether they are specifically mentioned in the sale deed. Selling any area marked as “common” in the approved plan is a violation of both RERA and the building permit.
About Real Estate law RERA
The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a landmark legislation in India designed to regulate the real estate sector, bring in transparency, and protect the interests of homebuyers. It came into full effect on May 1, 2017.
- All commercial and residential projects, where the land exceeds 500 sq. meters or more than 8 apartments are proposed, must be registered with the State RERA authority.Promoters must deposit 70% of the funds collected from buyers into a separate bank account to cover construction and land costs, preventing diversion of funds to other projects.
- The law provides for fast-track dispute resolution mechanism through the Real Estate Regulatory Authority and Appellate Tribunal. Each state must establish its own RERA Authority and Appellate Tribunal hears appeals against the decisions of the Regulatory Authority. The RERA Appellate Authority, known as the Real Estate Appellate Tribunal (REAT), is a statutory body established under Section 43 of the Real Estate (Regulation and Development) Act, 2016, to hear appeals against orders passed by the RERA Authority or Adjudicating Officer. Appeals must be filed within 60 days of receiving the order, with tribunals mandated to endeavor disposal within 60 days. It consists of a chairperson (a retired/sitting High Court Judge) and judicial/administrative members. Orders passed by the REAT can be further challenged in the High Court.
RERA Speaks of Covered Parking Alone
The RERA (Real Estate (Regulation and development) Act, 2016) speaks of covered parking space but not about open parking. Hence, a developer has right to sell covered parking alone but not open parking.
In 2017, the Ministry of Housing and Urban Poverty Alleviation specified that in Section 2 (n) of the RERA Act, common areas include open parking spaces and therefore, open parking spaces cannot be sold by the seller of flats.
Resolving Parking Disputes
If a builder or society violates these rules—for instance, by illegally selling common parking spaces—homeowners have legal recourse:
File a RERA Complaint: You can file a formal complaint with the local Real Estate Regulatory Authority (RERA). This requires evidence such as the sale agreement, the approved building plan, and any relevant correspondence.
Review and Refund: RERA will review the case. If a violation is found, the authority can direct the builder to refund the amount paid for the parking space, often with interest.
Appeals: RERA decisions are enforceable. If parties are dissatisfied, they can appeal to the RERA Appellate Tribunal or the higher courts.
RERA acts as a vital safeguard, ensuring that builders adhere to approved plans and protecting the rights of homebuyers.
