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Can you sell your car parking slot?

There's nothing new about parking woes. Every day you hear about builders charging between Rs 1 lakh and Rs 15 lakh for a single parking slot along with their flats. Mumbai-based Vishwanath Sahu is among the lucky few on the other side of the fence. When he purchased a flat in the Gorai area of Malad six years ago, the developer offered to sell him a parking slot in addition to the space he was officially allowed to purchase, as there were no takers for it.

"The car park cost me around Rs 1 lakh, but since I had a motorcycle and a car, I thought it would be better to take two slots," says the 39-year-old cinematographer. Today, given the increasing number of car owners in his housing society, there is a shortage of parking space and Saha is keen to capitalise on it. "A member has offered me Rs 5 lakh to purchase my slot. I am planning to sell it, but don't know how to go about it," he adds.


Chances are that Saha will find it a legal nightmare to sell his slot, especially if someone challenges the transaction. This is because of the 2010 Supreme Court ruling, according to which flat buyers need not pay extra money to buy parking spaces, both open and closed, from property developers. The judgement, delivered by Justices RM Lodha and AK Patnaik, rejected real estate development company Nahalchand Laloochand's argument that they were entitled to sell garages/stilt parking areas as separate flats to owners who wanted to use it as a parking.

According to the ruling, "If a promoter does not fully disclose the common areas and facilities, he does so at his own peril. Stilt parking spaces will not cease to be part of common areas and facilities merely because the promoter has not described the same as such in the agreement with the flat purchaser. The promoter has no right to sell any portion of the building which is not a flat."

Ravi Goenka, advocate, Mumbai High Court, explains that though a developer cannot sell the car park to a person who purchases a flat from him, he can "allot the same on a first come, first served basis without charging any money from him". According to him, the housing society has to then take the responsibility for reshuffling the parking spaces to other members at periodic intervals. "The allotted space means that the member has the right only to park his vehicle. He is not the owner of the space and cannot sell it to others at a premium," says Goenka.

The housing society is allowed to frame its own parking rules. Most of them ask for a copy of the vehicle documents before allotting a parking slot. This is to restrict non-members from parking inside the society premises. The rule of thumb is that no member will be eligible for allotment of more than one stilt/covered parking space per flat. If any slots remain vacant for want of applicants, which is sometimes the case for open parking, a second parking space may be allotted to interested members. This procedure is supposed to be followed on an annual basis, provided the empty slots are not required by a member who is yet to bag even one designated parking space.

The bad news

Far from accepting the ruling and living by the book, developers in most cities are actually charging flat owners twice for the same parking space. "In most of the top metro cities, where transactions generally take into account the super built-up area (total area of land where the project is spread divided by the total number of flats), the parking area is also divided and added to it," says Ganesh Vasudevan, vice president of , a Chennai-based real estate portal. This means that the developer has charged flat buyers for the parking space even before possession. Despite having charged for the total land, the developer then sells parking slots at exorbitant rates.

Typically, car parking slots sell for Rs 1-3 lakh in mid-level housing projects and can go up to Rs 10 lakh in premium housing projects in the metro cities. According to Goenka, even if developers take extra money and sell the parking space to the buyer, they take utmost care not to mention it in the agreement as it is illegal and can be challenged in court.

New tricks of the trade

Given that selling parking spaces is a lucrative source of additional revenue for developers, they are trying hard not to forgo it. So they have come up with innovative ways to carry on business as usual. Says Subhankar Mitra, head, strategic consulting (west), Jones Lang LaSalle India: "If developers are restricted from selling slots directly, they find ways to apportion the cost, say, by increasing the charge for the super built-up area or by raising the overall per square foot rate. In other words, property buyers will continue to pay for parking either directly or indirectly."

According to him, many high-end transactions have been known to fall through due to the developer's inability to meet buyer requests for multiple parking slots with each flat. This problem has cropped up in areas such as Bandra, Nepean Sea Road, Peddar Road and the like in Mumbai. In the case of commercial property, the acceptable industry norm is to provide one parking slot per 1,000 sq ft. If a project provides more than this, it can command a premium price, claims Mitra.

The Supreme Court ruling ensures that even if you find a buyer for your parking slot, you won't be able to sell it. However, you may consider renting out the space if it is agreeable to the housing society. As yet, there are no tax implications on such rental income, but it will be better to check with a tax expert before doing so.


Source : Can you sell your car parking slot? Find out your legal rights - Economic Times
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  • Originally Posted by Rahul DeSi
    Are there no watch dogs over this industry who have an accountability on the things which are happening in the market....

    All this is not a secret....

    No checks and balances over this industry

    Is there some kind of department who fights for you....who is supposed to watch it all....even if the consumer is not watching....


    Yes a dept. is there but it needs to be woken up.... Department of Town & Country Planning :)
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  • It was 2009 recession time, unfortunately we come together when we are in trouble, at present many of us are having attitude 3-4 lakhs give it, why to take headache, we will charge from person who will buy it
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  • This may be true for investors. But for end users, situation is same whether it is recession or not, it is always tough to manage extra 3-4 lakhs.
    I appreciate Nitin and his team efforts for this initiative.

    Originally Posted by vibhusjain
    It was 2009 recession time, unfortunately we come together when we are in trouble, at present many of us are having attitude 3-4 lakhs give it, why to take headache, we will charge from person who will buy it
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  • This may be true for investors. But for end users, situation is same whether it is recession or not, it is always tough to manage extra 3-4 lakhs.
    I appreciate Nitin and his team efforts for this initiative.



    I do appreciate it,
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  • In the right direction. But I have a worry. If builders are allowed to consider this as part of common area, They will get the ability to increase the loading in super area like hell. 1700 sq ft 3 bhk can become 2000 plus.
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  • True, they will either increase the super-area to include the parking basements OR since in future, they may need to charge based only on carpet area, they will simply raise the price sky-high.
    There's no way builders will take the hit themselves.
    I just checked my IREO Uptown agreement and the Common area definition does not include
    parking space. So Im sure if I approach IREO on parking refund, they will simply say that we didnt include parking in Common area and offer to include it in common area instead of separately (which is what they are doing for new bookings I believe), which will cost same or probably more as the parking cost, so Im not planning to ask IREO on this.

    Originally Posted by Ranjeetnew
    In the right direction. But I have a worry. If builders are allowed to consider this as part of common area, They will get the ability to increase the loading in super area like hell. 1700 sq ft 3 bhk can become 2000 plus.
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  • Originally Posted by Ranjeetnew
    In the right direction. But I have a worry. If builders are allowed to consider this as part of common area, They will get the ability to increase the loading in super area like hell. 1700 sq ft 3 bhk can become 2000 plus.


    Buddy.....the issue of super area is myth. let me ask you when you buy a box of sweet is the shopkeeper allowed to add the weight of box? No 1 Kg sweet means 1 kg of sweet exclusive of weight of box. Was this the case always? No. When I was a Kid (Not too many years back) :D I remember an order came where sweet shop owners had to display that the weight of box is not included in the weight of sweets. When the govt. cares about us not being taken for a ride by a small sweet shop owner worth Rs 100, why not do the same for real estate.

    The fact is as per law the builder can not sell the box. If you read the Apartment Act rules especially a document called deed of declaration it only allows sale & registration of built up area. Builder have been getting away for way too long selling non-existent area which needs to stop.

    On your point of builders adding parking in common area to be honest ask your builder to justify the super area & give you the calculation for the same he will not be able to cause it does not exist. The concept today is build 1 lakh Sqft & sell 2 Lakh in the name of super area. So regardless of the fact that you buy parking from them or not they will continue to cheat us till we stop them.
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  • Originally Posted by sh-saxena
    True, they will either increase the super-area to include the parking basements OR since in future, they may need to charge based only on carpet area, they will simply raise the price sky-high.
    There's no way builders will take the hit themselves.
    I just checked my IREO Uptown agreement and the Common area definition does not include
    parking space. So Im sure if I approach IREO on parking refund, they will simply say that we didnt include parking in Common area and offer to include it in common area instead of separately (which is what they are doing for new bookings I believe), which will cost same or probably more as the parking cost, so Im not planning to ask IREO on this.


    That is fine since its a choice you have, the only thing I would suggest you to go through the letter written by FAOA India to Sh. Dhillon (Head of DTCP) it will help you understand the issue better. Also read the SC judgement in Nehalchand's case where the court has clearly shot down the above argument of removing parking from common area.

    Also like Rahul shared the CCI has also in its order said the sale of parking is illegal (not abusive) which is very important.

    Even in NTH that is the same thing DLF has written.
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  • Originally Posted by nbkp4gk
    That is fine since its a choice you have, the only thing I would suggest you to go through the letter written by FAOA India to Sh. Dhillon (Head of DTCP) it will help you understand the issue better. Also read the SC judgement in Nehalchand's case where the court has clearly shot down the above argument of removing parking from common area.

    Also like Rahul shared the CCI has also in its order said the sale of parking is illegal (not abusive) which is very important.

    Even in NTH that is the same thing DLF has written.


    thanks for the detailed response and starting this useful thread.

    taking sh saxena point further, i had specifically raised this issues with ireo and this is the response i got, i had cited the supreme court judgement , the rti and the haryana acts. please advice what do we need to do further. they are basically ducking the query under legalese and it will great if collective wisdom of the forum members are used to defeat such defense of the builders. once again a great thread and thanks mods for making it sticky.
    -----------------------------------------


    I have discussed this matter with our Legal Department and what they have said is that:-

    The judgment of the Supreme Court cited by you has been misunderstood by you and in fact it does not prevent us from charging you for parking spaces allotted with your Apartment. However, as a matter of abundant caution, we discussed the judgment with a leading advocate of the Country as well as a retired CJI of the Supreme Court and they have both validated our understanding.

    In the above judgment, even the Supreme Court has acknowledged that the parking is chargeable. The only question which arose in that case was whether the Developer should load the price of the parking on the carpet area of the flat or it could be sold separately. In the peculiar facts and circumstances of that case, the Supreme Court held that the parking cost should have been loaded on the carpet area of the flat, and could not be charged separately. This is not the position in Haryana.

    Our Agreement transparently disclosed the price for your Apartment and separately the charges payable by you for the allotted parking spaces. We could very well have loaded the price of the Parking Spaces on to the Apartment cost and not charged you separately for the allotted parking and still recovered the same amount. In neither case would you get a wind fall with free parking. And that is not what the Supreme Court has said in the judgment cited by you.

    We have been reverting to all the queries raised by you. A couple of our replies do take a little longer as it requires inputs from various other departments. But we have always tried to ensure that all your feedbacks and questions are heard & addressed appropriately.

    ------------------------------------------------------------------------------
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  • KC, Thanx as always for your update on this. I was thinking of whether or not to approach IREO but will hold for now.
    I totally agree that builders need to be transparent and we need to push them to be so.
    But also I understand that they are in the business of making money so why will they not charge for creating parking basements. By one way or another, they will surely charge, either loaded on BSP or separately and looks like going forward it will be loaded on BSP which will make this discussion a moot point in near future.
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  • Originally Posted by sh-saxena
    KC, Thanx as always for your update on this. I was thinking of whether or not to approach IREO but will hold for now.
    I totally agree that builders need to be transparent and we need to push them to be so.
    But also I understand that they are in the business of making money so why will they not charge for creating parking basements. By one way or another, they will surely charge, either loaded on BSP or separately and looks like going forward it will be loaded on BSP which will make this discussion a moot point in near future.


    I think it will be worthwhile for the existing buyers to follow up as they can not increase the BSP & if it is proven to be illegal to charge for parking then they have to reimburse you for the same.

    while i do appreciate your point on the doggedness of the builders to do what is good for them, It is a matter of principle and we must pursue it.

    Happy to note that you had your EDC reimbursement communication from them, please insist on basis of calculation, as otherwise they will indicate a nominal amount only.

    Krishna99 has excellent posts on edc/idc calculation and can be used. His knowledge is very usefull.
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  • Agreed. But i am sure developers and sweet shop owners are not in the same boat. they will be able to influence, put their point of view before authorities or law thru best of their lawyers to recover their financial outgoes on basements. you are right that no builder will be able to justify super area calculation. But if they are allowed to include parking/basement in super area, they will not only justify, but also further increase it like anything. I hope it will become much more transparent when new rgulation bill will come (it was in today's TOI)
    To become Devil's advocate, if some builder makes more parkings/basement than what is required by law, can he charge customers for having extra parking......or why should he make basement as long as he can show he has open parking.

    Originally Posted by nbkp4gk
    Buddy.....the issue of super area is myth. let me ask you when you buy a box of sweet is the shopkeeper allowed to add the weight of box? No 1 Kg sweet means 1 kg of sweet exclusive of weight of box. Was this the case always? No. When I was a Kid (Not too many years back) :D I remember an order came where sweet shop owners had to display that the weight of box is not included in the weight of sweets. When the govt. cares about us not being taken for a ride by a small sweet shop owner worth Rs 100, why not do the same for real estate.

    The fact is as per law the builder can not sell the box. If you read the Apartment Act rules especially a document called deed of declaration it only allows sale & registration of built up area. Builder have been getting away for way too long selling non-existent area which needs to stop.

    On your point of builders adding parking in common area to be honest ask your builder to justify the super area & give you the calculation for the same he will not be able to cause it does not exist. The concept today is build 1 lakh Sqft & sell 2 Lakh in the name of super area. So regardless of the fact that you buy parking from them or not they will continue to cheat us till we stop them.
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  • My POV...

    Scenario - Refer to my IREO property...

    BBA has already been signed and property is u/c...As a consumer cant much fight for in court...but nevertheless shall taken it up at the right time...

    One mandatory parking taken...Refund shall be tough but, at time of possession or any time from now, if we request for one more space then can quote the SC guidelines...If not a covered one, atleast the builder should give an open one at no extra cost...
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  • Originally Posted by rahul40
    You reply them something like this way:

    As per my legal adviser, no where in SC judgment it is mentioned that this Judgement applicable ONLY for Maharastra Flat Ownership act 1963. This SC Judgment is binding on all over India. If your are not convince, then let it be decided at any competent forum or court of law, where we have opportunity to have opinion/view of Judicial persons/officers.

    I’m very much confirmed and even if I take your contention that SC order is pertain to Maharastra Ownership Flat Act, I request you to please refer to Haryana flat Ownership Act 1983, that too saying that car parking is in common area, like stairs, lift, Veranda, park, road, garden etc. and the same is your booking form is saying.

    If your offer is taken into consideration that you are providing basement parking, that again not in form of car garage (three side walled and a lockable gate) as observe by SC over and above you are not going to execute a separates sale deed for that in my name.
    In SC Judgement, it is clearly mentioned any place other then flat is not permitted to sale.

    Other limp of plea that is: In your sale brochure as well as on your official website, you mentioned that towers are stilt +…… floor, In this scenario I’m not inclined to have a basement parking, I’m happy with stilt parking or even open car parking, which is part of common area, and in your payment schedule chart you mentioned "Right To Use" for car parking. “Right to Use” is my ‘by default right’ and I don’t need to pay to invoke my right to use, nor you are permitted to charge for the same. When you are not selling car parking space (which you can’t) how can you ask money for same.






    Even if you have mentioned in booking/bba and got signed from me... things which are bad in eyes in law don’t sustain at law.

    As per Supreme Court order in the civil writ bearing no 2544 of 2010 of Nahal Chand Laloochand Pvt. Ltd Vs. Panchali Co-operative Housing society Ltd, judgment dt 31.08.2010

    “Developer can’t sale car parking space (open/cover/stilt) in group housing project. It falls under common area, which is flat buyer’s right to use. And apartment buyer don’t need to pay to exercise his “Right to Use”. Developer have right to sale of flats only and nothing else in the group housing.”


    Thank you it is very helpfull. will write to them and will update the forum on the same. once again appreciate the time taken to respond.
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