Act 16 of 1973
Separate law is being made to declare that flats or apartments in multi-storeyed building may, for all purposes, be heritable and transferable immovable property. Owners of such flats or apartments enjoy exclusive ownership of their flats or apartments while retaining an undivided interest in the common areas and facilities which are to be used and owned by all such owners jointly.
An enterprising individual or group of individuals may either construct out of his or their own funds multi-storeyed buildings consisting of a number of self contained flats or apartments and sell them to individuals on ownership basis, or construct such buildings after collecting contributions from intending purchasers of such flats or apartments.
In the interest of the intending purchasers who advance funds it is necessary to regulate the construction, sale, management and transfer of flats or apartments by individuals or group of individuals who construct such multi-storeyed buildings. Hence the Bill.
(a) ‘flat’ means a separate and self-contained set of premises used or intended to be used for residence or office or show-room or shop or godown (and includes a garage), the premises forming part of a building.
(c) ‘promote’ means a person who constructs or causes to be constructed a block or building of flats or apartments for the purpose of selling some or all of them to other persons or to a company, co-operative society or other association of persons and includes his assignees; and where the person who builds and the person who sells are different persons, the term includes both.
(e) ‘to construct a block or building of flats’ includes to convert a building or part thereof into flats.
3. General liabilities of promoter:
(2) A promoter, who constructs or intends to construct such block or building
of flats, shall,-
(a) make full and true disclosure of the nature of his title to the land on
which the flats are constructed, or are to be constructed; such title to the land as
aforesaid having been duly certified by an Advocate of not less than seven years
(b) make full and true disclosure of all encumbrances on such land,
including any right, title, interest or claim of any party in or over such land;
(c) allow inspection on reasonable notice 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 which he is required so to do under
any law for the time being in force;
(d) disclose the nature of fixtures, fittings and amenities (including the
provision for one or more lifts) provided or to be provided;
(e) disclose on reasonable notice or demand if the promoter is himself the
builder, the prescribed particulars as respects the design and the materials to be
used in the construction of the building and if the promoter is not himself the
builder disclose, on such notice or demand, all agreements (and where there is
no written agreement, the details of all agreements) entered into by him with the
architects and contractors regarding the design, materials and construction of the
(f) specify in writing the date by which possession of the flat is to be
(g) prepare and maintain a list of flats with their numbers already taken or
agreed to be taken and the names and addresses of the parties and the price
charged or agreed to be charged therefor, and the terms and conditions if any on
which the flats are taken or agreed to be taken;
(h) state in writing, the precise nature of the organisation of persons to be
constituted and to which title is to be passed, and the terms and conditions
governing such organisation of persons who have taken or are to take the flats;
(i) not allow persons to enter into possession until a completion certificate
where such certificate is required to be given under any law, is duly given to the
(j) make a full and true disclosure of all outgoings (including ground rent
if any, municipal or other local taxes, taxes on income, water charges and
electricity charges, revenue assessment, interest on any mortgage or other
encumbrances, if any);
4. Promoter before accepting advance payment or deposit to enter into
agreement and agreement to be registered.-
Notwithstanding anything contained in any other law a promoter who intends to construct or constructs a block or building of flats, all or some of which are to be taken or are taken on ownership basis, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than twenty per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under the Registration Act, 1908 and such agreement shall contain the prescribed particulars; and to such agreement there shall be attached such documents or copies thereof, in respect of such matters, as may be prescribed.
6. Responsibility for payment of outgoings till property is transferred.-
A promoter shall, while he is in possession and where he collects from persons
who have taken over flats or are to take over flats sums for the payment of
outgoings even thereafter, pay all outgoings (including ground rent, municipal or
other local taxes, taxes on income, water charges, electricity-charges, revenue
assessment, interest on any mortgage or other encumbrances, if any), until he
transfers the property to the persons taking over the flats, or to the organisation
of any such persons.
7. After plans and specifications are disclosed no alterations or additions without consent of persons who have agreed to take the flats; and defects noticed within a year to be rectified.-
(1) After the plans and specifications of the building, as approved by the local authority as aforesaid, are disclosed or furnished to the person who agrees to take one or more flats, the promoter shall not make,-
(i) any alterations in the structures described therein in respect of the flat
or flats which are agreed to be taken, without the previous consent of that
(ii) any other alterations in the structure of the building, or construct any
additional structures, without the previous consent of all the persons who have
agreed to take the flats.
(2) Subject to the provisions of sub-section (1), the building shall be
constructed and completed in accordance with the plans and specifications
(3) If any defect in the building or material used, or if any unauthorised change
in the construction is brought to the notice of the promoter within a period of one
year from the date of handing over possession, it shall wherever possible, be
rectified by the promoter without further charge to the persons who have agreed
to take the flats, and in other cases such persons shall be entitled to receive
reasonable compensation for such defect or change.
(4) Where there is a dispute as regards any defect in the building or material
used, or any unauthorised change in the construction or as to whether it is
reasonably possible for the promoter to rectify any such defect or change or as
regards the amount of reasonable compensation payable in respect of any such
defect or change which cannot be, or is not, rectified by the promoter the matter
shall, on payment of such fee as may be prescribed, be referred for decision to
such officer not lower in rank than a Superintending Engineer as the State
Government may by general or special order specify in this behalf, within a
period of two years from the date of handing over possession. Such officer shall
after such enquiry as he deems necessary, record his decision, which shall be
8. Refund of amount paid with interest for failure to give possession
within specified time or further time allowed.- If,-
(a) the promoter fails to give possession in accordance with the terms of his agreement of a flat duly completed by the date specified, or any further date or dates agreed to by the parties; or
(b) the promoter for reasons beyond his control and of his agents, is unable to give possession of the flat by the date specified, or the further agreed date and a period of three months thereafter, or a further period of three months if those reasons still exist, then, in any such case, the promoter shall be liable on demand (but without prejudice to any other remedies to which he may be liable) to refund the amounts already received by him in respect of the flat (with simple interest at nine per cent per annum from the date he received the sums till the date the amounts and interest thereon is refunded), and the amounts and the interest shall be a charge on the land and the construction, if any, thereon in which the flat is or was to be constructed to the extent of the amount due, but subject to any prior encumbrances.
9. No mortgage etc., to be created without consent of parties after execution of agreement for sale.-
10. Promoter to take steps for formation of co-operative society or company.-
(1) As soon as a minimum number of persons required to form a co- operative society or a company have taken flats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as a co-operative society, or as the case may be, as a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a co-operative society or as the case may be, of a company.
11. Promoter to convey title, etc., and execute documents, according to
A promoter shall take all necessary steps to complete his title and convey to the organisation of persons, who take flats, which is registered either as a co-operative society or as a company as aforesaid, or to an association of flat-takers his right, title and interest in the land and building and execute all relevant documents therefor in accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power.
12. General liabilities of a person who takes a flat.-
13. Manager not to cut off, with-hold, curtail or reduce essential supply
(1) No person, who is a promoter, or who is in charge of management or connected with the management of a block or building of flats whether as member of a managing committee, Director, Secretary or otherwise, or is responsible for the maintenance thereof (hereinafter in this section referred to as “the manager”), shall, without just and sufficient cause, either by himself or through any person, cut off, with-hold or in any manner curtail or reduce, any essential supply or service enjoyed by the person who has taken a flat (or by any person in occupation thereof through or under him) in respect of the flat taken, or agreed to be taken by him.
Explanation I.– In this section, essential supply or service includes the supply
of water, electricity lights in passages and on stair cases, lifts and conservancy or
Explanation II.-For the purposes of this section, withholding any essential
supply or service shall include acts or omissions attributable to the manager on
account of which the essential supply or service is cut off by the local authority or
any other competent authority.
14. Offences by promoter.-
Any promoter who, without reasonable excuse, fails to comply with or contravenes any provisions of this Act or of any rule made thereunder shall (where no other penalty is expressly provided for) on conviction, be punished with imprisonment for a term which may extend to one year or with fine which may extend to two thousand rupees, or with both; and a promoter who commits criminal breach of trust of any amount advanced or deposited with him for the purposes mentioned in section 5 shall, on conviction be punished with imprisonment for a term which may extend to four years, or with fine, or with both.
17. Act to be in addition to Transfer of Property Act and to over-ride
contract to the contrary.
The provisions of this Act, except where otherwise provided, shall be in addition to the provisions of the Transfer of Property Act, 1882, and shall take effect notwithstanding anything to the contrary contained in any contract.