In a move to promote more efficient use of land, the Union government is planning to persuade states to enact legislation for ownership of apartments.
The legislation will meet the persistent demand for statutory recognition of an apartment as a unit of property that can be inherited as well as transferred. It will also permit ownership of common areas and land in a proportionate manner.
The government hopes the legislation will help reducing the supply-demand gap in housing. "If an individual does not have resources to build the entire permissible floor area on a piece of land, the new legislation will enable him to do so. Land is a scarce commodity and should not be wasted," said an official.
This proposal among others in the National Urban Housing and Habitat Policy will be put up for approval of the Cabinet shortly.
The apartment legislation will be supported by another recommendation in the policy, according to which the present authorised floor area ratio would be reviewed and increased in line with the international practice for allowing more efficient use of scarce urban land through construction of "very high rise buildings."
The model acts and rules and regulations to this effect may be framed by the Union government, sources added.
This is not the first time that the government has sought introduction of such a law. The Delhi Apartment Ownership Act, 1986, was repealed as it lacked penal provisions and was therefore found to be ineffective. In lieu of this, the Apartment Ownership Bill, 2001, was introduced in the Lok Sabha, but lapsed.
Such a legislation could solve many problems faced by apartment buyers. In the case of co-operative societies, obtaining loans is difficult as the land title rests with the society.
When apartments are purchased by agencies such as the Delhi Development Authority, the super-structure is conveyed to the allotted and the land to a registered agency and allottees jointly. By separating the ownership of land and the building, the registered agency always has to be dealt with in future transfers of properties.
The legislation would also solve the problem of original allottees or holders of general power of attorneys not having a stake in the management and development of the housing complex.
The existing arrangements sometimes involve the intervention of private builders or agencies like the DDA in the litigation or dispute regarding management of common areas that arise between the residents. Ownership of flats and share in the undivided land could prevent this intervention.
Enactment of the legislation could also help in the reduction of the stamp duty to be paid by buyers.
"Proportionate share in land will reduce the stamp duty if a buyer purchases the flat prior to construction. The buyer will then have to pay stamp duty only on his share of the undivided land and not for the construction," said Akshay Kumar, chairman, Colliers International.
