Legalise purchase of parking space

Builders are inflating flat prices or selling this space, making life quite difficult for home buyers

Ask any car owner in Mumbai or Delhi about their worst nightmare and it invariably has to be — absence of parking space in their cities. And this begins at home, literally.

Whenever anyone purchases a property, they have to pay separately for parking space — sometimes it becomes part of the sale agreement and other times, they have to pay the amount in cash (read black). Often, these amounts are significantly high — in excess of Rs 5-10 lakh in big cities.

The Supreme Court, in 2010, had ruled builders cannot sell car parking space, as these are common areas and facilities, and not independent units. But builders seem to have found a way around it.

As advocate Vinod Sampat says, “Builders sell car parking space by bundling its charges within the sale agreement value.” That is, they club the price of the parking space along with the flat’s price and claim that it is being given free of cost. Here, the buyer is completely in the dark about the amount being charged for the car parking space. Otherwise, if the amount has to be paid in cash, buyers have to run around to arrange this money.

But things could change if the proposed Maharashtra Housing (Regulation and Development) Bill is passed. The Bill proposes that the sale agreement should contain ‘the total price of the flat including price of the limited common areas and facilities and parking spaces should be shown separately, to be paid by the flat purchaser’. Other states are also working on this.

It simply means, the builder will be allowed to legally charge the home buyer for that space and will have to compulsorily show it in the sale agreement. The Bill is awaiting the governor’s nod.

This Bill will solve another problem. Many buyers or investors in new housing societies enter the project early and buy a number of car parking spaces. After new people move in, they sell these car parking spaces at a premium. This problem will also get addressed.

Experts say the overall cost of parking space may also come down, thanks to the Bill. For one, the builder will be unable to sell more than one space to a house owner, which otherwise creates a false sense of scarcity. Two, investors will no more be able to corner parking spaces. “The cost of parking may also come down once they have to show the amount they are charging for it,” says Neha Jagtap, advocate with Legal Pundits International Services.

The current rule restricts builders from selling the parking space, but it also gives them the power to allot it. In other words, one cannot utilise the space unless it is allotted to him by the builder. “Allotting and selling are two sides of the same coin. While the clause is in place, developers have been taking advantage of this law by selling the space instead of only allotting it,” says Anil Harish, advocate, DM Harish & Co.