Madras High Court · Division Bench · 20.01.2023
Land shown as a common area belongs to the flat owners, not the builder
A Division Bench of the Madras High Court held void the builder’s sale of a non-FSI block and land meant as a common facility, directed the authority to hand the block over to the owners’ association, and ordered the builder to correct the undivided share of every flat owner.
Key points
- Once land is shown as a common area and a common facility is developed on it, it belongs to the owners of that facility, the flat purchasers.
- The builder’s sale of the non-FSI block and its land to a third party was in breach of the planning permission and void.
- By inflating the total built-up area, the builder had reduced each owner’s undivided share (UDS); it was directed to execute rectification deeds within three months.
The facts
The builder of a 77-flat project in Alwarpet, Chennai, was required by the planning authority to put up a non-FSI block in front of the residential buildings, intended as a common facility. The undivided share of land conveyed to the flat buyers was calculated on a total built-up area of 2,00,000 sq.ft. instead of the approved 1,30,000 sq.ft., which reduced each owner’s share. The builder then claimed the non-FSI block and its land as its own and sold them to a third party, who let the block out for a supermarket. Earlier litigation and planning enforcement followed, and the owners’ association finally sought a direction to hand the block over to it.
What the Court held
The Court held that the non-FSI area was not saleable and that its sale to the third party, along with undivided share in the land, was void. It rejected the builder’s claim of a genuine mistake, holding that the buyers had paid for their full entitlement because a builder charges a single rate covering land and building; reducing the UDS did not mean the buyers had not paid for it. The CMDA was directed to hand over the vacant block to the association, and the builder to execute rectification deeds correcting each owner’s UDS within three months. The Court refrained from imposing costs only in the hope of compliance.
Why it matters
Although decided under Tamil Nadu law, the reasoning is close to Maharashtra’s position under MOFA and RERA and the Supreme Court’s decision in Nahalchand Laloochand: areas shown as common amenities belong to the purchasers and cannot be sold separately by the developer. Societies seeking conveyance should check how the undivided share or land area was calculated in their agreements.
Twenty-one-page judgment in English. This page summarises the decision for general information; it is not a substitute for the full text and not legal advice. Check whether the decision has since been appealed, modified or overruled.
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