Introduction

In 2016, Real Estate (Regulation and Development) Act, popularly known as RERA Act was brought into effect. It was an attempt from the government to bring more transparency to the Real Estate sector in India. Prior to the enactment of the Act, the Real Estate sector lacked transparency and builders used to harass the homebuyers by delaying the possessions of their property or giving them possession of a property which was totally different from what was promised. The builders used to alter the original layout and sanctioned plans causing homebuyers to face losses and things used to happen on the whims and fancies of the builders. Thus, the act was brought with the intent of protecting the interests of the homebuyers. The act contains many provisions that bind builders to adhere to the sanctioned plans.

Adherence to the Sanctioned Plans.

The act makes it mandatory on the part of the builder to stick with sanctioned maps and layout plans approved by the competent authorities prior to starting a real estate project. The builder must develop the project in accordance with such sanctioned plans and in normal circumstances builder cannot deviate from the same. It is both a builder’s liability to make the sanctioned plans available to the allottee at the time of booking or allotment as well as a right of the homebuyer to obtain the information relating to sanctioned plans, layout plans along with specifications approved by the competent authority.

In What Circumstances Can Alterations be Made?

It is a settled principle that in normal circumstances builder cannot make any changes to the sanctioned plans, layout plans and other specifications but it is not the case that the builder cannot deviate from the sanctioned plans at all. Following are the cases when a builder becomes eligible to make the structural changes:

• Additions or alterations in the sanctioned plans, layout plans and specifications with respect to an apartment/ plot can be made by the builder if prior consent of the buyer is taken.

• Minor Alterations or Additions which are necessary because of architectural and structural reasons can be made by the builder without taking the consent of the builder, but:

1. Such minor alterations must be recommended and duly verified by an authorized architect or engineer.

2. Buyers must be duly informed by the builder regarding such alterations.

3. Minor Additions or Alterations do not include any structural changes like Any addition to area, change in height, removal of a part of the building, construction or removal or cutting into any wall or portion, column, beam, floor including a mezzanine floor, changing or closing any required means of access, changes to fixtures or equipment.

• Builder cannot make any alterations or additions to the sanctioned plan, layout plans of the entire project and the common areas of the building without obtaining the prior written consent of 2/3rd of the allottees which do not include the builder itself. Any person who has booked more than one flat in the project (whether on his own name or on the name of his family) for the purpose of this clause will be considered as one allottee only.

Leading Cases

The principle under the RERA Act that sanctioned maps cannot be altered without the consent of the buyers also exists in the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act 2010. It was such provisions in the UP Apartment that led the Hon’ble Supreme Court in Supertech Ltd vs Emerald Court Owner Resident Welfare Association (CA 5041/2021) to order the demolition of the infamous Twin-Towers built by builder M/s Supertech Ltd. by revising the building plans without taking prior written and informed consent from the buyers who had booked flats by relying on the original building plans.

Taking the prior approval of the home buyer is an imperative condition the same was held in case of Deepesh S Singh and ors vs. M/s. Neelkanth Constructions, the Maharashtra Real Estate Regulatory Authority (MahaRERA) vide its order dated July 30, 2020 directed the respondent builder not to carry out the construction of any floors in the project without taking prior approval from the existing buyers. It was contended by the Complainants that, despite Clauses 24 and 25 of the sale agreement with respect to construction of extra floors (modifications to the sanctioned plan) to utilize the Floor Space Index (FSI) of the whole project land, Section 14 of RERA would supersede as the project is registered with Maharashtra RERA. MahaRERA while interpreting while interpreting Section 14 of the Act, restricted Respondent builder from commencing any construction activity or make any modifications in the sanctioned plan without the 2/3rd consent and approval of the existing (allottees) buyers i.e., those who already have bought the flat.

The homebuyers are bound by their written consents given under the provisions of the act, MahaRERA in case of Sunil Wadhwani v. Pashmina Realty Private Limited applied section 62 of the Contract Act (Principle of Novation). Section 62 implies that if there is a contract in existence and some new contract is substituted for it, it results in the discharge of the old contract.  The complainant booked flat no. C-701 having a carpet area of 1,436 sq. ft. consisting of four-bedrooms for Rs. 2,76,00,000/- However, the plans had been revised and a two-bedroom and three-bedroom flats were proposed to be constructed with the consent of 2/3rd of allottees of the project including the complainant. The complainant gave express consent for the change in plan and executed the consent terms, he agreed to take two flats in the new building/project. After the Consent, the Complainant sought refund of his amount with interest under Section 18 of the RERA claiming that the Respondent failed to handover the possession of the original flat on the agreed date. MahaRERA dismissed the complaint and held that there is novation of the contract and only a formal contract in writing is to be executed. The consideration of the original flat is to be adjusted against the new flats, otherwise, the terms and conditions are similar. In view of the same, the Complainant’s claim for withdrawal is not maintainable and the same is dismissed.

What if the Builder changes the Sanctioned Plans?

The builder has to strictly abide by the provisions of the act and is bound to develop the project in lines with the sanctioned plans, layout plans and specifications. If in case builder does not abide by the plans and make changes arbitrarily or in case the builder does not seek permission from 2/3 of allottees in case alterations are being made in the whole project or the common area, the aggrieved persons could file a complaint against the builder under Section 31 of RERA act. RERA Authority upon determining that the act of builder is against the spirit of the provisions laid under the act can impose a fine on the builder that may extend up to 5% of the total cost of the project. In severe cases if it is found out that developer is engaging itself in some fraudulent practice the authority may also cancel the registration of the project under Section 7 of the act.

Reason & Jurisprudence

Apartments are immovable property and an immovable property must be attached to land. The Apartment Ownership Acts of all states entitles every apartment owner of an apartment project to have a proportionate undivided share in the land over which the sanction for constructing apartment project is passed by the competent authority. Let’s assume that a an apartment project is sanctioned and being constructed on 25000 sqmtr of land with 100 flats of equal size. As per apartment ownership act every apartment owner will mandatorily be owner of 250sqmt of undivided undemarcated land attached to his apartment. As per te sanctioned builder has sold some apartments and now wants to add let’s say 10 more apartments. Now by increasing the number of apartment the builder is actually decreasing the land right of previous buyers. When 100 apartments were there every apartment owner has land right of 250 sqmt. but when 110 apartments will be there every apartment owner will have 227.27 sqmt. This way around 23sqmt. of land of previous buyers will get compromised. No one can encroach upon or use others property without either paying for it or by taking express consent for it. Thus, to add any new facility or flats in the an already sanctioned and sold project the builder will have to take informed consent from the previous buyers and if buyers want they can seek compensation against the decreased area in there share of land.

Conclusion:

RERA Act being a welfare legislation has intents to protect and safeguard the interests of the home buyers. It has taken care of the problem of builders’ practice of revising building plans to maximise their profits which was also reason for delaying the projects. But RERA Act under section 14 has made it mandatory for the builders to seek prior consent from the two-third of the allottees for altering, amending or changing the building plans. Without the conset of the 2/3 allottees project can’t be amended. Furhter, the local apartment acts of different state like that of Uttar Pradesh may even demand for 100% consent as per provisions of section 5 of the UP Apartment Act 2010.

FREQUENTLY ASKED QUESTIONS

What is undivided share of apartment owner or UDS?

Undivided share is a part of land held by the buyer / owner of an apartment in a commercial or residential project on the plot of land over which the entire condominium is constructed. Each and every apartment built on that particular plot of land will have an undivided and undemarcated share proportionate to the size of apartment. The proportion is calculated by dividing the total built up area of the project from super area of the apartment.

Does RERA Act mention about UDS?

UDS is mentioned in the apartment ownership act of the states and is mentioned by RERA Act. The ownership rights in the apartments is created by state apartment ownerships act.

Can builder purchase additional FAR/ FSI without the consent of the previous buyers?

Well FAR is property attached to the land and if it is getting increased it means that number of apartments in the project will be increased. The Hon’ble Allahabad High Court in Designarch case has held that the FAR/ FSI or any additional FAR is a property, appended to rights in the property on which the building is constructed, and is thus a property in which the apartment owners have an interest by virtue of the provisions of the UP Apartment Act, 2010. The purchase of additional FAR is not permissible to be appropriate by the builder without any common benefits to the apartment owners. The consent of the apartment owners obtained by resolution in the meeting of the apartment owners by majority will be necessary for purchasing additional FAR. Its utilization will also be subject to the consent of the apartment owners.

What to do if builder is proposing amendments in the Project plan?

In such case, as an allottee or as an apartment owner a person should raise his grivance and make objections in writing to the builder as well to the authority which has sanctioned the building map of such project.

If the apartment owner has problem with the changes and seeks to be compensated for the decrease in the land rights and increase in the population density etc. then seeking compensation would be the appropriate remedy. The buyer has every right to seek compensation in terms of money from the builder and builder does not grant that he can approach RERA Adjucating Officer by filing a complaint as prescribed in Form-N under section 31 of the RERA Act. A buyer can seek compensation even if 2/3 of the project allottees have given consent for changes without taking any compensation from the builder.

In case a buyer is not at all satisfied with the project changes and want to challenge the revised sanctioned map on technical grounds then he can approach High Court for cancelling of the revised building maps.

Whether for making changes the builder has to compensate the buyers?

The proprtionate undivided interest in the land of an aprtment owner will decrease if any additional apartment or any other facility will be constructed. This means that your land or property is being taken away without paying you for that. Thus, every apartment allottee or owner has a right to seek compensation from the builder when the builder will propose for amending the building plan. In fact as a matter of practice every builder should come with compensation scheme for previous allottees/ owners when he proposes change in the project plan.

Whether the Association of Allottees or Apartment Owners can give consent on behalf of the buyer/ allottees?

The Hon’ble Supreme Court in the case of Supertech Ltd. v. Emerald Court RWA has held that rights under the UP Apartment Ownership Act 1975 and UP Apartments Act 2010 have been provided to individual flat owners, and not to collective bodies like the RWA. Hence, even the non-constitution of the RWA will not extinguish the rights of individual flat owners. Indeed, however, when such RWAs do exist, developers may use them to seek a common consent from all the flat owners instead of approaching them all individually. Same principle will also be followed for taking consent under the RERA Act.

Hence, apartment owners / allottees/ resident welfare association cannot give consent on behalf of the buyers rather developers may use them to seek a common consent from all the flat owners instead of approaching them all individually.