ET Article :

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
Read more
Reply
202 Replies
Sort by :Filter by :
  • Originally Posted by kinjalchato
    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.

    ------------------------------------------------------------------------------


    Hi Kinjal
    Pls write back to IREO asking for calculations of common areas. You would realize that they have already loaded the parking area in it. Else the loading wont be 30% of super area.

    Also do use the letter of FAOA which is available on their website (submitted to SS Dhillon) and send the same to IREO

    When you ask for the calculations they would know what they are getting into.

    Also ask them to submit their legal council opinion which they are quoting. You would realize nothing like that exist
    CommentQuote
  • Originally Posted by krishna99
    Hi Kinjal
    Pls write back to IREO asking for calculations of common areas. You would realize that they have already loaded the parking area in it. Else the loading wont be 30% of super area.

    Also do use the letter of FAOA which is available on their website (submitted to SS Dhillon) and send the same to IREO

    When you ask for the calculations they would know what they are getting into.

    Also ask them to submit their legal council opinion which they are quoting. You would realize nothing like that exist


    Thanks krishna, will do the same and appreciate your response.

    your edc calculation basis was very usefull and some of us including rushil, sh saxena have been able to pester ireo and get some reimbursement. i am pestering them more to share the calculation and they are reluctant.

    will be writing to them based on your inputs in the relevant thread.

    Thanks and keep it coming, helps lot of people.
    CommentQuote
  • Originally Posted by kinjalchato
    Thanks krishna, will do the same and appreciate your response.

    your edc calculation basis was very usefull and some of us including rushil, sh saxena have been able to pester ireo and get some reimbursement. i am pestering them more to share the calculation and they are reluctant.

    will be writing to them based on your inputs in the relevant thread.

    Thanks and keep it coming, helps lot of people.


    Hi
    Here is the green letter of FAOA on illegal parking charge which you could use it with IREO
    http://faoaindia.org/wp-content/uploads/2013/01/new_parking-letter_24122012.pdf
    CommentQuote
  • What about UP Builders?

    Originally Posted by rahul40
    Merely mentioned in the BBA that parking is not under common area, wont save builder, this is what written in CCI’s order dt 3rd Jan'2013.

    These all clauses fall under 'unfair clauses'.
    All builder are doing like dlf. all will have to correct themselves as per CCI order and modify BBA,

    If we study minutely the order of CCI dt 3rd Jan’13, it only suggest the implementation of rule/act in the state i.e.

    The Haryana Apartment Ownership Act 1983,

    The Haryana Development And Regulation of Urban Areas Act, 1975,

    The Haryana Development And Regulation of Urban Areas Rules 1976

    The Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963.


    nothing special mentioned in CCI order except these acts.


    Are bhai esa koi Act UP ke choro ke liye bhi hai kya? :D
    CommentQuote
  • I am loving this...thank you all for getting involved with so much passion in our common cause. Just by builder saying that he has got some legal opinion telling him what he is doing is right does not make his acts legal.

    Pls ask the following questions:

    1) What about condition 13 of BRIII which requires you to declare Parking as common area.

    “The basements shall be used for parking and services as prescribed In the approved zoning plan and building plans. The parking lots proposed In the scheme shall be exclusively for the use of flat owners/residents of the group housing scheme. The parking lot shall not be leased out/ transferred to any person who is not a flat owners /residents of the group housing complex. The parking lots shall form part of common areas along with other common uses in the declaration to be filed under Apartment Ownership Act, 1983.”

    2) What about Section 3f Haryana Apartment Ownership Act? Which declares parking as common area.

    3) Even the SC judgement is clear & asks builders to declare parking as common area

    “It was argued that under MOFA it is for the promoter to prescribe and define at the outset the `common areas' and unless it is so done by the promoter, the parking area cannot be termed as part of `common areas'. We are quite unable to accept this submission. Can a promoter take common passage/lobbies or say stair case or RG area out of purview of `common areas and facilities' by not prescribing or defining the same in the `common areas'? If the answer to this question is in negative, which it has to be, this argument must fail”.

    4) What about CCI order which has declared sale of parking as illegal?

    All this makes it clear that builder can not sell parking, If the builder did not as per him add cost of parking in BSP that is his fault not ours. Any per contract act any contract or term of contract which is in violation of any law is not enforceable.

    One has to understand no builder will be folding his hands & coming to us accepting his mistake & returning the money. We have to force builders to follow the law. They will try & convince us with all types of arguments which don't mean anything. It is for us to learn about our rights & take what is ours back. Like shared by Krishna you can use our (FAOA) letter to understand your rights.

    Happy to see the fire we started at FAOA India is spreading.

    Keep at it we all will be successful. Again let us know if you need help.

    Together we will win.
    CommentQuote
  • I would also like to thank the moderators of the forum on behalf of FAOA India for this wonderful platform.

    I believe this forum is doing a great job in getting customers together & giving a great place to interact & learn from each other.

    Thanks for your support.
    CommentQuote
  • Originally Posted by nbkp4gk
    I would also like to thank the moderators of the forum on behalf of FAOA India for this wonderful platform.

    I believe this forum is doing a great job in getting customers together & giving a great place to interact & learn from each other.

    Thanks for your support.


    Have a look at this -



    https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/37985-gurgaon-home-buyers-amp-rwa-unite-against-unethical-builders?t=39692
    CommentQuote
  • The problem is that we r fighting from our "zoned" platforms - some small, some slightly bigger & some "BIG"{ but most of these big platforms r not accessible/ people r not much aware of them . Also, there is an issue of our Indian mentality - we don't like asking for help, almost all of us think, that we know all } .


    If we pool in our resources & fight together, we can achieve much more .
    CommentQuote
  • I totally agree with what you said.

    I along with being the president of NTH association am also the General Secretory of FAOA India. I am really happy to see your efforts. All these little things add to the strength of the consumers. The fact is builders gain at our expense because we are fragmented but with efforts of people like you & your team this advantage that builders have is getting diluted.

    I think there is a lot of scope of synergy between FAOA India & IREF. While we are a not for profit organization whose membership is only open for registered association not individuals but one of our primary goal is to make individual consumers aware of their rights which will in the end will help all of us achieve our final goal of changing the real estate market in India.

    Keep up the good work.
    CommentQuote
  • Originally Posted by nbkp4gk
    I totally agree with what you said.

    I along with being the president of NTH association am also the General Secretory of FAOA India. I am really happy to see your efforts. All these little things add to the strength of the consumers. The fact is builders gain at our expense because we are fragmented but with efforts of people like you & your team this advantage that builders have is getting diluted.

    I think there is a lot of scope of synergy between FAOA India & IREF. While we are a not for profit organization whose membership is only open for registered association not individuals but one of our primary goal is to make individual consumers aware of their rights which will in the end will help all of us achieve our final goal of changing the real estate market in India.

    Keep up the good work.


    This has to be one of the best posts in IREF..:)
    Hats off to you all esp. Nitin Sir for enlightening & awakening the people.. I plan to wage a battle against BPTP in faridabad on few accounts i.e.
    1. Car Parking
    2. Misusing its dominant position in Faridabad Neher Paar & delay the posession
    3. Increase in Super Area from 1289 sq ft to 1365 sq feet which is > 5%.
    4. Any other point that fellow sufferer like me brings out.

    Please guide how should I proceed.
    CommentQuote
  • Dear Friend
    Thanks for your kind words....

    First thing I would like to ask you is your project a GHS or builder floor? Since laws are different in both cases. What ever be the case the following steps still remain common:

    My suggestion

    1) Collect customers like you...remember there is a lot of strength in Unity. Join hands form an association it is easy, all you need is a min. 7 customers to start, any CA or Lawyer in your area can help you register which does not cost much.

    2) File all the relevant RTI to get your project documents this will tell you about the key issues in your project. Issues raised by you are all valid.

    3) Go through the Apartment Act (if your complex is a GHS) you can also find a lot of relevant info from FAOA India site to know your rights. The point is unless you are aware of your rights what will you fight for?

    These three things should be your starting point. Start the process & if you have passion I assure you that you will succeed.

    I can try & guide you on the way as much as possible.
    CommentQuote
  • Originally Posted by nbkp4gk
    Dear Friend
    Thanks for your kind words....

    First thing I would like to ask you is your project a GHS or builder floor? Since laws are different in both cases. What ever be the case the following steps still remain common:

    My suggestion

    1) Collect customers like you...remember there is a lot of strength in Unity. Join hands form an association it is easy, all you need is a min. 7 customers to start, any CA or Lawyer in your area can help you register which does not cost much.

    This project name is called BPTP Princess park GHS for which I gave cheque in Jan-2006 and received offer of posession in Jan-2012.

    2) File all the relevant RTI to get your project documents this will tell you about the key issues in your project. Issues raised by you are all valid.

    Could you please elaborate more about "Relevat RTI", I mean what documents should I ask for ? Could you point me to the person who can file the RTI for a nominal fee?

    3) Go through the Apartment Act (if your complex is a GHS) you can also find a lot of relevant info from FAOA India site to know your rights. The point is unless you are aware of your rights what will you fight for?

    These three things should be your starting point. Start the process & if you have passion I assure you that you will succeed.

    I can try & guide you on the way as much as possible.


    Thanks again Sir.
    CommentQuote
  • Hi Nitin, thanks for what you are doing. I also own a flat in NTH - sec 86 and would like to know how to join the web group.

    Another question is when I spoke to DLF customer care about delayed panelty they said this will be decided at the end and we need to review if all your payments were on time. This is very annoying as there have been couple of payment which delayed from my side by 1 week or 2 but then I paid the interest to them. Could you provide your insight if they can really reduce the penalty in my case.

    Thanks in advance
    CommentQuote
  • Originally Posted by vivhunter
    Hi Nitin, thanks for what you are doing. I also own a flat in NTH - sec 86 and would like to know how to join the web group.

    Another question is when I spoke to DLF customer care about delayed panelty they said this will be decided at the end and we need to review if all your payments were on time. This is very annoying as there have been couple of payment which delayed from my side by 1 week or 2 but then I paid the interest to them. Could you provide your insight if they can really reduce the penalty in my case.

    Thanks in advance


    Its high time we need a regulator to take these bastards to task, but I know its not gonna happen soon.
    CommentQuote
  • Also note that payments which got delayed were due to the letter that we received quite late and by the time we paid there was delay.
    I am sure there might be many owner with this situation.
    CommentQuote