Are Shops built in Group Housing in UP are part of common area

1.       Due to rising population clusters of large apartment buildings through Group Housing are developing in U.P.  To regulate the construction of such Group Housing and apartments therein, help of mainly three legislations are taken which is U.P. Apartment (Promotiion of Construction, Ownership & maintenance) Act, 2010, Urban Planning and Development Act, 1973 and U.P. Industrial Area Development Act, 1976.    While the 2010 Act deals with the promotion, construction and maintenance of such apartment buildings, the 1973 and 1976 Acts has specific chapters dedicated to building Bye-laws for Group Housing.  The building Bye-laws are prepared by the local Development Authority like NOIDA in Gautam Budha Nagar and LDA in Lucknow or GDA in Ghaziabad and then these building Bye-laws are sanctioned by the State Government. Amending these buildings Bye-laws is possible at the executive level of the state government.   On the other hand, the U.P. Apartment Act, 2010 also deals with certain basic construction-related regulations in the construction of apartment buildings and the provisions of this Act are in addition to, and not in derogation of any other law regulating such buildings. 

2.       The State Government allows the construction of Group Housing under two kinds of land use:

• residential land use and
• mixed area land use

amongst which residential land use is the preferred land use by the promoters for construction of Group Housing as cost thereof is much cheaper against mixed land use.

3.       Firstly, we will try to find whether shops built in a Group Housing project, land whereof is allotted or leased by the Development Authority, is for residents use only or for outsiders also.

4.       As per the building Bye-laws of most of the Development Authorities formed under 1973 or 1976 Act, ‘Convenient Shops’ are allowed upto one percent of the total allowed FAR in the project and at the same time the Bye-laws also provide five ‘Convenient Shops’ shall be provided for population of 1000 persons with maximum 15 sq. mtr. area per shop.

5.       As per the building Bye-laws of most of the Industrial Development Authorities like NOIDA, Group Housing means premises of size not less than 2000 sq. mtr. comprising of either residential flats or a cluster of flats and independent houses / villas with basic amenities like parking, park, convenient shops, public utilities, etc.  The definition of Group Housing does not include commercial shops rather it mentions only basic amenities which include convenient shops.  Building Bye-laws also provide that a Group Housing shall conform to the provisions of the Sector Plan and Zonal Development Plan or Scheme of the area in terms of the setbacks, ground coverage, and floor area ratio and height restrictions.  The Building Bye-laws also mention the ‘Convenient Shops’ shall be allowed equivalent to one percent of the permissible Group Housing FAR irrespective of the service population per unit.  In Notes to the Building Bye-law 24.11, that authority may allow more number of social and committee facilities but same should be non-commercial and ‘Convenient Shops’ may be allowed on Ground Floor of the housing block or a separate building block out of the permissible ground coverage.  The said Building Bye-laws also make it clear that the ‘Convenient Shops’ shall be constructed for local use i.e. for the residents of the concerned Group Housing. 

6.       The Building Bye-laws of NOIDA also define ‘Mixed Land Use’ which means mixing / planning of compatible uses, horizontally or vertically, on a property such as commercial, offices, residential or institutional.

7.       So there are definitions of Group Housing and mixed land use.  It is clear that a Group Housing does not allow commercial shops whereas a land having mixed land use allows commercial shops.  The building Bye-laws are specif and do not use the term ‘commercial shops’ in a Group Housing project rather it uses the word ‘Convenient Shops’.

8.       The U.P. Apartment Act, 2010 in its definition of ‘Common Areas and Facilities’ means, amongst others, all other parts of the property necessary or convenient to its existence, maintenance and safety or normally in common use.  

9.       The use of word ‘Convenient’ in the definition of common areas and facilities in the U.P. Apartment Act and ‘Convenient Shops’ in the NOIDA building Bye-laws and other building Bye-laws of other Development Authorities make it very clear that the ‘Convenient Shops’ made in a Group Housing are common areas and facilities.  These ‘Convenient Shops’ are necessary for the existence of such Group Housing.

Hence shops built on a plot earmarked as for residential use in the land lease deed of Group Housing shall always be ‘Convenient Shops’ and not commercial shops. Such commercial shops will not have open access to sector road rather will cater only to the needs of the population of the concerned group housing in which they are situated.

Can builders sell ‘Convenient Shops’ in a Group Housing?

As it is very clear from the above definition, the ‘Convenient Shops’ are common area of the Group Housing project as such, such ‘Convenient Shops’ cannot be sold by the builder to any person rather same is required to be handed over to the Apartment Owners Association which may lease it out to a person and make common profits out of it for the purpose of reducing common expenses on the apartment owner. 

What if the promoter has declared the shops as independent area in the Deed of Declaration?

The Deed of Declaration submitted by the builder is not a final document if it is not complying with the building Bye-laws, U.P. Apartment Act and the Guidelines given in the Design Arch case by the Hon’ble Allahabad High Court.  As per the Design Arch judgment the Deed of Declaration can be challenged before the competent authority if it wrongly demarcated common areas and independent areas.  Further as per the Design Arch judgment a Deed of Declaration submitted after 90 days from the date of judgment of Design Arch case i.e. 14.11.2013 in ongoing projects, a promoter cannot claim any independent area or limited common area.  So Group Housing projects which were approved but not completed as on 14.11.2013 had to submit a Deed of Declaration within 90 days from 14.11.2013 and if any builder did not submit the Deed of Declaration within the prescribed period of 90 days then it was disentitled from claiming any independent or limited common area in its project.  The Ghaziabad Development Authority had even issued public notices disentitling promoter from claiming any independent or limited common area in their project.  Hence promoters cannot claim the ‘Convenient Shops’ as independent area even if they filed declaration claiming shops as independent area same is ought to be cancelled by competent authority on a complaint filed by the Apartment Owners Association and pursuant thereof dub-lease made in favour of shop owners, if any, should be cancelled by the competent authority.

What AOAs can do to restore the ‘Convenient Shops’ as a common area:

The Apartment Owners Association should file an application before the competent authority for rectifying the Deed of Declaration by removing the ‘Convenient Shops’ area from independent area to common area and request for cancelling these sub-lease deeds or the sale deed. 

Once the Deed of Declaration is corrected and the ‘Convenient Shops’ are restored as common area in the Deed of Declaration then the Board of Management or the AOA should proceed as per the procedure prescribed under Section 25 of the U.P. Apartment Act, 2010 and lodge complaint against the promoter before the judicial Magistrate. 

It shall not be out of place to mention here that the Hon’ble Supreme Court in Writ Petition No. 940/2017 titled Bikram Chatterjee vs. Union of India & Ors. in its order dated 23.07.2019 in Para 121 has held that common areas as provided under Section 17 of the RERA Act (or any other law) have to be ultimately handed over to the Association of allotees or the competent authority as the case may be.  Thus any sub-lease, alienation or transfer affected by the promoter of the common areas, as defined in the RERA and otherwise reserved under the plan shall be void and inoperative.