‘Why did the Twin Tower Fall’ – A review of the Condominium management laws in the Country
Why Did the Twin Tower Fall
On 28th August 2022, the Noida twin tower named Apex and Ceyna were reduced into absolute nothing except for about 55000 tons of debris, following its demolition. Apex and Ceyna housed 900 apartment units, with a construction cost, estimated at 90 crores and market price of 700 crores, approximately. The demolition followed a judgement of the Apex Court.
The Supreme Court[i] has cited three major reasons for arriving at its conclusions for demolition of the twin tower, namely (1) Violation of the distance requirements under the building regulations, (2) Consent of the Resident Welfare Association (RWA) not obtained before the construction, and (3) Collusion and illegal Construction. This Article focuses only on the second reason, ‘Failure to obtain Consent of RWA’.
The Apex Court found the consent of the individual flat owners of the original fifteen towers, individually or through the Resident Welfare Association (RWA), was a necessary requirement under the UP Apartments Act 2010 and UP 1975 Act before Tower No.-16 (Apex) and Tower No-17 (Ceyna) could have been constructed, since they necessarily reduced the undivided interest of the individual flat owners in the common area by adding new flats and increasing the number of apartments from 650 to 1500.
A study of 1975 and 2010 enactments of Uttar Pradesh, is also the story of the Condominium management laws in the Country. Such local laws received more attention, when the Real Estate (Regulation and Development) 2016 (RERA) came into force. There is a general feeling that the condominium management methods put forward by such local laws is far more better RERA.
What is a legal condominium and how is it constructed?
A Condominium[ii] means an apartment building in which each apartment is owned separately by the people living in it, but also containing shared areas. The construction of a legal condominium will not be complete by building its superstructure, but it either requires the application of either the provisions of the RERA Act or the Condominium Management Laws.
Construction of the Legal Condominium under RERA.
RERA, primarily operates by creating obligations upon various stake holders, namely Promoter, Allottee, Real Estate Agents etc. The Promoter is obligated to form an Association of Allottee, which could either be a Society or Co-operative Society, under the law applicable[iii]. Further, the Promoter has to convey the title of the undivided proportionate title in the common areas to the Association, through a registered conveyance deed, while the private apartment is transferred to the respective allottee[iv]. Moreover, they are obligated to hand over physical possession along with the necessary documents[v], to the allottee and the Association of Allottee, as the case may be. These processes are sufficient enough for completing the legal condominiums, however, the transfer of undivided common properties to the Association of Allottees, is not generally acceptable to the home buyers, for they are divested with title over the common properties. The application of the Condominium Management Laws, could offer better relief to the home buyers.
The Condominium Management Laws and their application.
The Utter Pradesh Ownership of Flats Act 1975, Maharashtra Apartment Ownership Act 1970 and the Kerala Apartment Ownership Act 1983 appears to have a common origin, as most of these provisions are identical. The UP went for a total repeal, while in Maharashtra, it underwent several amendments, while in kerala there was neither any amendments nor were it implemented, either.
Let us examine the preamble and the provision for the application of the statute, in an attempt to understand the purpose of these local Condominium Management Laws . The preamble[vi] reads as follows:
“An Act to provide for the ownership of individual apartment in a building and to make such apartment heritable and transferable property.:
Section 2 Application of the Act[vii]
“This Act applies only to property, the sole owner or all of the owners of which submit the same to the provisions of this Act by duly executing and registering a declaration as hereinafter provided:
Provided that no property shall be submitted to the provisions of this Act, unless it is mainly used or proposed to be used, for residential purposes.“
Even though, these statutes were enacted with salutary objectives, most of the promoters as the ‘sole owner’ refused to execute and register the requisite declaration, for the application of the law. Once the conveyance deeds are executed, in favor of the apartment owners, and they became the title owners of the proportionate undivided common areas of the property, the second part of the provision, which required ‘all the owners;, would practically become impossible.
The ideal mechanism for construction of legal condominiums:
The Condominium Management Laws required the Owner of the property (either the promoter or the apartment owners) to execute a declaration in the prescribed form, describing the private areas and the common properties of the apartment building. Each Apartment Owner has to execute a deed of apartment in the prescribed form, immediately before the execution of sale deed by the Promoter/Builder or their joint venture partner owning land, in his favor. A byelaw approved by all the apartment owners has to be annexed along with such declaration be submitted before the Competent Authority. Thereupon, the Association of Allottees/Owners become functional.
Conclusion
The legal consequence of the construction of this legal condominium, is that the individual apartment owner would gain exclusive ownership over his common properties and the association of owners get the right to manage the common areas and facilities, described in the declaration, in accordance with the byelaws. The benefit of applying this law is that the apartment owners can retain their proportional title in the common areas, and get over the harsher mandate provided in RERA.
[i] Supertech Limited Vs. Emerald Court Owner Resident Welfare Association and Others 2021 (10) SCC 1
[ii] https://dictionary.cambridge.org/dictionary/english/condominium
[iii] Section 11 (4)(e) of the Real Estate (Regulation and Development Act 2016
[iv] Section 17 (1) of the Real Estate (Regulation and Development Act 2016
[v] Section 17 (1) and (2) of the Real Estate (Regulation and Development Act 2016
[vi] Preamble of Apartment Ownership Laws in Utter Pradesh, Maharashtra and Kerala
[vii] Section 2 of the Kerala Apartment Ownership Act 1983.
[viii] Kerala Apartment Ownership Act
