The National Consumer Disputes Redressal Commission has admitted a complaint against Bengaluru-based Mantri Developers for allegedly defrauding homebuyers on land share and property title transfers, which could adversely affect their ownership claims if the project is demolished or redeveloped.
In the complaint accepted on August 1, 48 homebuyers of the Mantri Serenity project claimed the promoters/landowners declared an undivided share of interest in the plinth area of the building alone, whereas they had paid for the super built-up area.
The plinth area, also called the built-up area, refers to the space occupied by the building, including the internal and external walls. The super built-up area consists of the total built-up area and includes common areas such as the corridors, the lift lobbies, and the elevators.
A legal expert said this was a case of homebuyers not being aware of their rights – they should get ownership of the apartment and the land on which the apartment is built.
“We have seen many complaints regarding delays in possession,” the expert said, adding that this was probably one of the few times that homebuyers have taken up their rights on the project title.
Cost components
The cost of an apartment usually has two major components – the cost of the structure and the cost of the land. When an apartment building is demolished or redeveloped, the property owners get compensated based on the undivided share of land (UDS) in their name.
“The developers are declaring undivided share of interest only in the plinth area of the apartment building and thereby taking away the title rights of homebuyers in the rest of the common areas in the project,” said Dhananjaya Padmanabhachar, director of the Karnataka Home Buyers Forum. “However, the homebuyers are paying for the entire super built-up area.”
Paragraph 41 of the complaint document accessed by Moneycontrol said, “Clause 32 of the deed of declaration dated 19.08.2013 also makes it clear that all the ownership of the remaining undivided share will fully belong to the vendor/developer thereby proving the case of the buyers with respect to the point of UDS.”
This is problematic because homebuyers won’t be able to claim their share of compensation when a project is reconstructed or demolished in the future.
The legal expert said if the issue is not resolved, it may escalate in the future.
On June 17, the Mantri Serenity homebuyers wrote to the Directorate of Enforcement, alleging that the developer had misused the UDS clause. The directorate investigates money laundering cases and violations of foreign exchange laws.
“No ownership has been declared on the entire project land for which the builder has taken floor area ratio (FAR) approval, whereas the homebuyers paid money for the super built-up area,” said Padmanabhachar.
He said the subdivision of land in the project contravenes the FAR, which is the ratio of a building’s total floor area to the size of the land upon which it is built.
“The maximum permissible FAR in Bengaluru is 3.25. However, for Mantri Serenity, it comes to 4.73,” he added.
A list of questions has been sent to Mantri Developers and the story will be updated as and when it responds.
Check sales deed
Amith Amarnath, an advocate who deals with consumer forum cases, said when the builder executes the sale deed, the super built-up area has to be divided among the homebuyers in proportion to the plinth area of the apartment. But in the case of Mantri Serenity, even though the purchasers have paid for the land, they haven’t got what they are entitled to, he said.
“The homebuyers need to check the sales deed and DoD thoroughly, often with the help of a legal expert,” Amarnath added.
Lawyers said the homebuyers need to go for proper legal verification before signing any agreements. Additionally, they have to obtain the complete documents from the builders.
They said the sales deed must clearly mention the UDS share of the homebuyers and the super built-up area in the project. This way, the buyers know what they are getting.
Abhilash Naik, an advocate, said there are three solutions for this – the homebuyer can approach the civic courts, the regulator, or consumer courts.
Naik added that homebuyers can use the brochure and documents, including the agreements, to challenge the developers in court. The courts can also ask the builders to register the additional area to the homebuyers proportionately, in addition to compensation, he added.
Lawyers said similar complaints are pending at the Karnataka Real Estate Regulatory Authority. However, they are toothless in terms of enforcement. Amarnath said RERA was introduced to reduce the burden on the civil courts, but today cases are piling up in civil courts and consumer forums.
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