RERA- Understanding Parking

 In 2018, a strange news became headlines. A parking space was sold for 5.6 Crores in Hong Kong. Sounds outrageous but its true. Buying a home or office now comes with added pressure to have your own appropriate parking in the project. No matter what the size of the unit, every home owner desires to park his car conveniently, preferably in a covered location. Understanding the regulation around parking is very essential to make the right purchase decision.

This blog today is dedicated to understanding the regulation around parking and how can you make an informed decision as a buyer. Lets start by classifying the parking in three major categories:-

1) Parking that can be Sold by Developers:-

As per the latest Circular 36/2021 by Maharera a developer is allowed to sell a covered car parking spaces and garages. Covered car parking space or garages are simply areas which can house cars in a space that is covered by three sides and a roof. 

An important fact to note is that multiple judicial pronouncements have held that a parking without a roof cannot be considered as a covered parking space even if they are covered by walls on three sides. Further Covered parking space need not have walls but must necessarily have roof.

If as a customer you are purchasing a covered parking space from the developer the Circular 36/2021 allows you to demand that you be made aware the exact location of the parking along with the same being marked on a map. For agreements registred post 1st Aug 2021 , covered parking space need to be exactly identified with the consideration taken, type, number and size as well as the place where such parking are situated.  Its an incorrect understanding to say that the Developers "Cannot Sell parking", restriction is only on selling of open parking.

Even covered parking space are of multiple types. Covered parking can mean parking on stilt, basement, stack parking, provision for stack parking, double height parking provision, parking along the walls of the society with roof. Each has its own advantages and disadvantages. As a customer, if you are paying for the same it is in your interest to understand in depth the type of the parking.

With the rise of EV it would also be in the customers interest to ask if the provision to have EV charging is available in the parking you are purchasing.

2) Parking that can be Allotted by the Developers:-

Not all customers may chose to purchase parking. Further a Developer may chose not to sell any parking. The Developer has an unhindered right to allot parking to the customers if he has not charged any specific consideration to the customers for the same.

Usually this allottment is done based on a chronological order as per agreement registered or booking dates. This allottment may be done on or before completion of the said project. The allottment by developer means that the Developer on his discretion can assign exclusive right to occupy and use a space to flat owners base on their purchase in the project.

Allottment can be of all covered car parkings and open parking spaces too. Open parking spaces are parking spaces that are not covered by roofs. As clarified by Circular 36/2021 , open parking spaces are free of FSI. All parkings can be allotted by the Developer in the project. However the society that is subsequently formed after completion may decide to change the allottment based on rules framed by the society.

3) Parking that can neither be Allotted or Sold by Developers:-

A sanction plan as approved by a municpal authority has certain specific conditions ingrained in it. Certain portions are marked as amenity space, certain are under specific reservations. Such locations can neither be used not allotted as parking by the Developers. If a customers buys such space even knowing that such space is seperately allocated to specific reservations then he is bound to loose his money. 

Open Parking Spaces cannot be sold by the Developer in any circumstance after circular 36/2021. This position was always such under previous laws too.

What is essential to note while dealing with a parking is that the same due deligence done for purchasing an apartment needs to be done while acquiring the parking that comes along the said apartment.

Parking is an expensive commodity. It is as valuable, if not more, than the flat itself. A parking without a flat still has value but a flat without a parking is a loosing game. RERA has ushered in a new era of transparency in buying Real Estate. This is all that a authority can do. The remaining job is of the buyer to understand what he is buying and then take appropriate decisions.

The recent circulars and orders by Maharera are a proof on how the authority is trying its best to educate the buyer. Now on the Maharera website you not only get the details of whether your apartment is sold to anyone else by the Developer, you also get to know if it is mortagaged specifically or not. Maharera has asked the Developers to upload a specific declaration letting the buyer know if the apartment is presently sanctioned or is in the process of being sanctioned. The Legal title issued by the developers lawyers is now made to be issued in a standard format so that by reading a single page the buyer can understand if the title to the project is clear. Due deligence still needs to be done by the buyer.

Points to Note before buying a parking:

1) Check the size of the parking as per the Sanctioned plans. Whether the pakring is SUV size or a small car size depends on what is approved on the Sanctioned plan.

2) Developer has discretion to allocate/allot parking anytime before completion of the project. Hence unless you are buying the parking, the only right that accrues to you is to be made known which type of parking you will get before completion

3) A purchased parking allottment cannot be changed by Society norms in any form or manner. However a allotted parking is subject to change by Society rules. its very rare when an allotted parking is changed by the Society

4) A Purchaser of apartment cannot demand a specific allottment of a parking at a particular location unless the Developer has sold the same to the Purchaser.

5) The size of the Parking is as approved in the Sanctioned Plan by the Municipal authority. Developer has no discretion in the matter.

6) Key regulations that have an impact on your parking purchase are RERA, MOFA, Local approving authority rules.

As a concluding remark, this author believes its always better to buy your Parking by paying a few extra bucks. Peace of mind in enjoyment of your new home is more relevant than saving a few lakhs. I would love to hear your thoughts on the same. Do leave your comments on the post.

- CA Saransh Dey

MBA- IIMK, F.C.A, L.LB, B.com