Monthly Archives: October 2014

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Happy Dipawali to You and Your Family.


Responsibilities of the Promoter/Builder/Developer under ‘The Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963’

Research work on ‘The Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963’

The said Act is basically for the regulation on the practice of selling flats/ taken on ownership basis. An Act to regulate for a certain period, in the State of Maharashtra, the promotion of the construction of the sale and management, and the transfer of flats on ownership basis.

As per the interpretation of this statute no part of statute is to be interpreted in isolation. The said interpretation has to be depending on the text and also the context. [S. Gopal Reddy v. State of A.P. AIR 1996 S.C. 2184].

The said Act contains 18 Sections with rules. It extends to the whole of the State of Maharashtra.

Promoter [Section 2(c)] – Promoter mean a person who constructs or causes to be constructed a block or building of flats for the purpose of selling some or all of them to other persons, or to a company, co-operative society or other associations of persons, and such a person if he assigns the flats or the building, would also include his assignees.  [Ramniklal kotak v. Varsha Builders AIR 1992 Bom 62]

The object of the said research is to explain the Responsibilities of the Promoter.  The MOFA casts onerous responsibilities upon a promoter who constructs a building of flats which are to be taken on ownership basis. The liabilities of the Promoter are explained under Section 03 of the said Act. The General Liabilities of the Promoter are following:-

  1. Promoter who intend to constructs building of flats which are to be taken or taken on ownership basis by the other persons.
  2. Promoter shall make full and true discloser of the nature of his title to the land on which the flats are constructed, or are to be constructed, such a title to the land as aforesaid having been duly certified by an Attorney-at-law or by an Advocate of not less than three years standing, and have been duly entered in the property, card or extract of Village Forms VI or VII and XII or any other relevant revenue record. [ Entry in the Property Card ]
  3. Promoter shall make full and true discloser of all encumbrances on such land, including any right, title, interest or claim of any party in over such land.
  4. Promoter give inspection of seven day notice or demand of the plans and specifications of the building built or to be built on the land, such plans and specifications having been approved by the local authority under any law for the time being in force.
  5. Promoter discloses the nature of fixtures, fittings and amenities provided or to be provided.
  6. Promoter discloses on reasonable notice or demand.
  7. Promoter specifies in writing the date by which possession of the flat is to be handed over or shall be hand over.
  8. Promoter should prepare and maintain list of flats with their numbers which is taken or agreed to be taken by the parties, name and address of the parties, price charged or agreed to be charged and terms and conditions of any on which the flats are taken or agreed to be taken.
  9. Promoter state in writing the precise nature of the organization of persons to be constituted, title to be passed and terms and conditions governing such organization of persons who have taken or are to take the flats. [ Conveyance]
  10. Promoter shall not give the possession until a completion certificate which is issued by the local authority.
  11. Promoter makes a full and true discloser of all outgoings. [Rates, Municipal Taxes]
  12. Promoter makes a full and true discloser of such other information and documents.
  13. If promoter advertise the flats for sale then he should disclose extent carpet area including balconies, price of the flat with intervals of installments, nature and description of common area and facilities and all documents, plans or specifications.
  14. Promoter is responsible for paying all outgoings including taxes in respect of the flats until he transfers the property to the flat owner/society/company, etc.
  15. If promoter fails to give possession of the flat as per the date specified in the agreement or any further agreed date or any reason beyond the control within the further extended time of 6 months, then promoter shall be liable on demand to refund the amounts received by him along with 9% interest per annum till the date of refund.
  16. After execution of the agreement for sale, the promoter cannot create any mortgage, charge on the flat without consent of the flat purchaser.
  17. As per section 4 of the MOFA, before accepting any payments as advance not more than 20% of the sale price or deposit from flat purchaser to execute a written agreement which registered under the provisions of Registration Act.
  18. As per section 10 of MOFA, promoter to take step for formation of co-operative society or company. Submit the application for formation of society within 4 months from the date of possession of the flats.
  19. As per the section 11 of MOFA the promoter must convey the title to the society of the flats takers within 4 months from date of formation of society. [Conveyance]

As per the research concern the above explanation are sufficient for stating the Responsibilities of the Promoter/Builder/Developer under ‘The Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963’