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APARTMENT
(Ss. 3 (a) 4 and 5)
QUESTION BANK
Q.1 Define ‘Apartment’ and explain various contents of Bye-laws annexed to the Deed of declaration.
Q.2 Define Apartment and explain provisions as to state and ownership of apartments.
Q.3. Define Apartment and state the difference between ‘flat’ and ‘apartment’.
SYNOPSIS
The Maharashtra Apartment Ownership Act, 1970
I. Introduction and Object of the Act.
The Regulatory Landscape
1. The Maharashtra Ownership Flats Act, 1963 (MOFA):
2. The Maharashtra Apartment Ownership Act, 1970:
II. Statutory Definitions and Core Provisions
1. Definition of "Apartment" [Section 3(a)]
2. Legal Status of an Apartment (Section 4)
3. Heritable and Transferable Ownership (Section 5)
III. Difference between Flat and Apartment
1. Foundational Concept of Ownership
2. Status of the Underlying Title
3. Mandatory Formation of Society
4. Transferability and Alienation
5. Mortgage and Financial Ease
IV. The Instrument of Subjection: Deed of Declaration and Bye-laws
1. The Deed of Declaration
2. The Bye-laws Annexed to the Declaration
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The Maharashtra Apartment Ownership Act, 1970
I. Introduction and Object of the Act.
The Maharashtra Apartment Ownership Act, 1970 (hereinafter referred to as "the Act") was enacted to provide a distinct statutory mechanism for the ownership of an individual apartment within a building, making such an apartment fully heritable and transferable property.
The Regulatory Landscape
In the real estate and housing domain of Maharashtra, two distinct statutes operate concurrently to regulate flats, apartments, and multi-storey schemes:
1. The Maharashtra Ownership Flats Act, 1963 (MOFA): Focuses primarily on regulating the promotion, construction, sale, management, and collective transfer of flats through cooperative societies or corporate bodies.
2. The Maharashtra Apartment Ownership Act, 1970: Focuses on individualizing titles, creating absolute ownership over a specific block or apartment, and securing independent heritable and transferable rights for the purchaser.
II. Statutory Definitions and Core Provisions
1. Definition of "Apartment" [Section 3(a)]
Under Section 3(a) of the Act, an ‘Apartment’ means:-
“ (i) a part of the property, intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floors (or part or parts thereof) in a building,
(ii) intended to be used for residence, office, the practice of any profession, or for carrying on any occupation, trade or business or for any other type of independent use and
(iii) with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway”.
The Act further defines ‘Building’ means a building containing five or more apartments or two or more buildings, each containing two or more apartments, with a total of five or more apartments for all such buildings, and comprising a part of the property (S. 3 (e)).
2. Legal Status of an Apartment (Section 4)
Under Section 4, each apartment owner is entitled to the exclusive ownership and possession of their individual apartment. The statute elevates an apartment from a mere occupancy right into a distinct, independent parcel of immovable property. Consequently, an apartment owner can execute a sale, lease, mortgage, or gift over their specific unit completely independent of the other occupants in the building.
3. Heritable and Transferable Ownership (Section 5)
Section 5 mandates that an apartment, along with its undivided interest in the "common areas and facilities" (such as corridors, elevators, lobbies, and land), constitutes a fully heritable and transferable property. Upon the demise of the apartment owner, the title passes directly to their legal heirs through testamentary or intestate succession without requiring the intervention or approval of a housing society.
III. Difference between Flat and Apartment
To assist in property practice and conveyance drafting, the following comparative table highlights the profound legal and structural distinctions between a "Flat" under MOFA and an "Apartment" under the 1970 Act:
1. Foundational Concept of Ownership
Flat (MOFA): Under the Maharashtra Ownership Flats Act, 1963, a flat purchaser lacks individual absolute ownership of the real estate. The primary ownership of the entire land and building structure vests collectively in the Housing Society, while the buyer holds occupancy rights.
Apartment (MAOA): Under the Maharashtra Apartment Ownership Act, 1970, the law confers absolute individual ownership upon the purchaser. The buyer owns a clean, distinct, and marketable title to their specific unit.
2. Status of the Underlying Title
Flat (MOFA): The land and building must be formally conveyed by the promoter to the Co-operative Housing Society. Consequently, the individual flat buyer does not own the land but holds a share certificate issued by the society.
Apartment (MAOA): Under the apartment structure, the title is legally split. The purchaser owns the apartment unit absolutely, alongside a specific, undivided percentage interest in the common land and facilities.
3. Mandatory Formation of Society
Flat (MOFA): It is strictly incumbent upon the developer or promoter to form a Co-operative Housing Society or a company consisting of the flat purchasers to manage the estate.
Apartment (MAOA): No cooperative housing society or corporate body is required under this act. The owners instead establish an Association of Apartment Owners to oversee the property.
4. Transferability and Alienation
Flat (MOFA): A flat cannot be transferred, sold, or leased to a third party without obtaining the prior permission or a No Objection Certificate (NOC) from the Co-operative Society management.
Apartment (MAOA): An apartment is freely transferable. No prior permission or NOC is required from the Association of Apartment Owners to execute a sale, transfer, or lease deed.
5. Mortgage and Financial Ease
Flat (MOFA): Securing a loan against a flat requires a tripartite agreement involving the lending bank, the flat owner, and the Co-operative Housing Society.
Apartment (MAOA): An apartment can be mortgaged directly by the owner as an independent piece of immovable property under Section 58 of the Transfer of Property Act (TPA), streamlining the financing process.
IV. The Instrument of Subjection: Deed of Declaration and Bye-laws
An estate or building cannot be governed by the Apartment Act through an ordinary sale contract; the property must be formally submitted to the provisions of the Act through specific legal instruments:
1. The Deed of Declaration
The owner or promoter of the building must execute and register a Deed of Declaration. This foundation document provides a comprehensive description of the entire property, including:
a. The precise description of the land and the building (number of storeys, basements, and apartments).
b. The specific number, floor location, area, and intended use of each individual apartment.
c. A clear description of the common areas and facilities (elevators, staircases, gardens, security cabins).
d. The precise percentage of undivided interest allocated to each apartment in the common areas, which determines their voting power and maintenance liabilities.
2. The Bye-laws Annexed to the Declaration
To regulate the day-to-day administration, upkeep, and financial management of the property, a comprehensive set of Bye-laws must be mandatorily annexed to the Deed of Declaration. These Bye-laws govern the internal operations of the Association of Apartment Owners and typically outline:
a. The composition, election process, powers, and duties of the Board of Managers.
b. The mechanism for holding annual and extraordinary general meetings, setting quorum requirements, and counting votes based on undivided percentage interests.
c. The method of calculating, collecting, and enforcing periodic assessments or maintenance charges from individual apartment owners to cover common expenses.
d. The explicit rules and restrictions regarding the use, maintenance, repair, and modification of individual apartments and common facilities to preserve structural integrity and harmony.
e. The clear procedure for amending the Bye-laws, requiring a strict special majority of the total voting power.
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