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
202 Replies
Sort by :Filter by :
  • Originally Posted by rm_noida
    Thanks again Sir.

    Pls share your cell number via PM, let me call you & talk in detail.
  • Originally Posted by vivhunter
    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.

    People are suffering like you....but hoping for DLF to see logic defies logic. :) Have you kept proofs of late delivery?
  • Originally Posted by rahul40
    These trick they use to play,
    My POV is., when you already paid int for delayed payment and company accepted that interest in lieu of delay, that means you are already compounded your offence of delaying, now you came up as innocent., legally they should not deny delay penalty to you in the end.
    Lets see, what they kept in store for you.

    Dear Rahul,

    What you are saying is right both legally as well as logically. Having dealt with DLF for 5 years now I assure you that is not how they think...that is what their contract says as well.

    Like I said hoping for logic from DLF is illogical.
  • Dear Rahul

    Same is the case with me, We have two flats in NTH both under DP plan with all payments till date on time, We have already received our TPR, should get Delay possession Penalty at the time of possession (One can never be certain with DLF).

    I have not been fighting since last 4 years for myself but for all of us in the NTH family. I do not wish to wait till the same thing happens with me to wake up. If today one of my future neighbor is getting exploited tomorrow something similar can happen with me. How can one ever justify what is happening in the case of vivhunter.

    Why should we be required to be 100% compliant with their conditions howsoever illegal or abusive they might be but they can delay projects by 3 years & get away without paying anything. Also is Rs 10 sqft enough when they charge us 18%?

    It has been too long that we have been fighting for ourselves. Time has come for India to fight back against abuse (regardless of whether one has personally been victim or not) for each other that is what will change this country. I am not sure how successful I will be but I think it is worth trying.

    I am happy that you are getting all the benefits which you rightly deserve. Also thanks for all your support....I love the fact that you are aware of your rights.... Keep at it.
  • I would like to correct myself not only me but the whole core team of the NTH association has their TPR & delay possession penalty valid having made their payments on time yet that at no point of time stopped any of us from questioning things which are wrong or for standing up for others in the family.
  • FAOA INDIA launches Green letter movement for refund of Parking in Karnataka. it is available on the facebook page of FAOA India
  • nbkp4gk, the quoted link is not working . Do quote a valid link .

    Thanks .
  • One can see the letter on the facebook page of FAOA India. Seems like the link can't be posted here. :(
  • Originally Posted by nbkp4gk
    Pls try the below mentioned link & let me know if it is working.


    This one is not working too .

    Would request u to amend the link in the original post, so that unnecessary posts can be removed .

    Thanks, once again .
  • Originally Posted by nbkp4gk
    One can see the letter on the facebook page of FAOA India. Seems like the link can't be posted here. :(

    See, if this helps -

    Indian Real Estate Forum - - FAQ: Reading and Posting Messages
  • How do we get our parking money back ?

    We have talked enough but how do we get this money back ? I have a unit in Emaar MGF Commercial, how do I ensure that they do not charge me ?
  • Nitin any response from DLF on your letter reg parking?
    You gave them 5days to respond which have elapsed long back
    Would help if cud spills the beans on what actions you have initiated further
  • We have already taken the next step will share details soon.
  • Stilt Car Parking is not chargeable as per supreme court decision

    Stilt/Open Parkings in Buildings Cannot be sold
    Posted on September 14, 2010
    Below is the head note of the judgement delivered by the Supreme court which states that stilts/open parkings cannot be sold by the developer.
    2010 SCCL.COM 567(Case No: Civil Appeal No.2544 of 2010 with C.A. Nos. 2449, 2456, 2545, 2546, 2547, 2548 of 2010)
    Nahalchand Laloochand P. Ltd. Appellant versus Panchali Co-op. Housing Society Ltd. Respondent
    Date of Decision(mm/dd/yy): 8/31/2010.
    Judge(s): Hon’ble Mr. Justice R.M. Lodha and Hon’ble Mr. Justice A.K. Patnaik (Vacation Bench).
    Subject Index: Maharashtra Ownership Flats (Regulation of the promotion of construction Sale Management and Transfer) Act, 1963 — section 2(a-1) — the questions that arise for consideration are : (i) whether stand alone `garage’ or in other words `garage’ as an independent unit by itself is a `flat’ within the meaning of Section 2(a-1) of MOFA; (ii) whether stilt parking space/open parking space of a building regulated by MOFA is a `garage’; (iii) If the answer to aforesaid questions is in the negative, whether stilt parking space/open parking space in such building is part of `common areas and facilities’ and (iv) what are the rights of the promoter vis-à-vis society (of flat purchasers) in respect of open parking space/s / stilt parking space/s — MOFA must be construed strictly and there is no provision either express or by necessary implication in MOFA restricting the sale of stilt or open parking spaces. MOFA does restrict the rights of the promoter in the block or building constructed for flats or to be constructed for flats to which that Act applies. The promoter has no right to sell any portion of such building which is not `flat’ within the meaning of Section 2(a-1) and the entire land and building has to be conveyed to the organisation; the only right remains with the promoter is to sell unsold flats — the promoter has no right to sell `stilt parking spaces’ as these are neither `flat’ nor appurtenant or attachment to a `flat
  • NTH's Declaration of Independence

    Confidential & Without Prejudice

    Dear Friends

    First of all a big thank you to all for the support & wishes. I am really pleased by all the wishes which came from everyone regardless of the fact that most of you have nothing to with New Town Heights.

    As you all are aware we wrote to Mr. Rajiv Singh 2 weeks back giving DLF an opportunity to do course correction. While we were hoping DLF will move forward but somewhere inside we knew that DLF did not have any answers for our questions. What can it possibly write to justify its actions? Like expected we did not get a response. That for us was never a show stopper & has only further strengthened our resolve to protect our rights.

    New Town Heights has last week declared Independence from abusive & illegal clauses of the agreement forcibly put on us by DLF. Last week we filed a formal complaint with Department of Town & Country Planning (Regulator in Haryana) on the illegal sale of Parking to customers by DLF in New Town Heights. This is the starting point of a full-fledged battle for protection of our rights. This if the relief asked for if not given will soon be followed by a petition for refund in the appropriate forum.

    The refund of parking is not about getting our money back but it is about enforcing rule of law. Like Parking there are multiple other violations that are happening in almost every project like sale of super area, builders claiming rights over community center, ownership of land, shops, school etc. All these belong to us owners & as per law the earning from these assets (Rent from leasing) needs to go towards maintenance of the complex which in turn should reduce maintenance bill drastically to almost zero.

    Than we have issues of wrongful denial of delay possession penalty (DPP), grossly inadequate DPP. We at FAOA INDIA expect builders to follow the law & not exploit us under the pretext of the one sided abusive agreement.

    We are fortunate that New Town Heights has been one group of owners that have always been aware of their rights & have fought for the same. Like shared with you we were the ones who created history in 2009 by doing that coup where we forced the largest builder in India to sit down listen to us & change.

    Today time has come for all of us regardless of the project that we have an apartment in to take things to the next level & by seeing the kind of support we are getting on this forum I know we are ready for it.

    Like I shared in my earlier posts our reason at FAOA India & NTH association to fight is not our own Timely payment rebate or denial of delay possession penalty but it is the community, the family that we all belong to as apartment owners & as residents of Gurgaon.

    I know most of you feel that even if you want you can't help us in our fight for our rights since you do not belong to NTH but that is far away from reality. You might not be able to help New Town Heights Association directly but by each one of you awakening & getting active in your own communities, by looking after & protecting each others interest, standing up for each other, uniting & fighting with your own builder for your rights you with us can bring the change that we all need, this country needs.

    Once we were ruled by the British today I feel we are all ruled by the builders. If you look within you community you will understand what I mean. Right from booking the flat they start to rule us, they impose unfair conditions on us through one sided contracts, charge heavy fines for any miss from our end, delay projects for years (in some cases like Pal & Triveni run away with our money), pay nothing for their own delay, increase loading to unbelievable levels.

    Even after possession the exploitation continues they will keep all the profits from the complex & make you pay heavy maintenance, its almost like living on rent in your own house.

    Today through this post (like I have asked everyone in the NTH family) I reach out to each one of you & ask you declare yourself free. This is freedom from exploitation, freedom from abuse. This personal declaration of freedom is also a pledge from all of us to be there for each other forever. We will no longer fight individual battles.

    If you believe in this cause than reply to this post by writing “freedom”

    Your coming together in your own communities & questioning your builder will be the biggest support to this cause for change.

    I have attached a copy of our complaint to DTCP.