For the right, undivided share of land

Apartment buyers/owners must take the help of a valuer to find out their due and if there are variations from agreed terms, they should seek rectification in the sale deed. By R.P. Deshpande

The apartment culture has evolved due to heavy urbanisation, resulting in increase in land prices, especially in major urban areas. Apartment complexes to a good extent have helped in reducing the cost of land. As a number of units are constructed on ground and upper floors in an apartment building, the cost of land is shared by all individual owners proportionately. As such land, allotted to each owner, which cannot be sub-divided is termed as undivided share (UDS) of land.

While super built-up area/carpet area is the measurement of built-up portion, there will be corresponding undivided share (UDS) of land, which is conveyed to each owner along with super built-up area of apartment.

Let us analyse how UDS of land is calculated.

On a land of 100 ft. x 120 ft. (12,000 sq. ft.) an apartment complex is designed, having stilt for parking, ground floor and 3 upper floors having 7,500 sq. ft. in each floor. There are 6 units in each floor and each floor is identical. Thus the complex has total super built-up area (SBA) of 30,000 sq. ft. Different type of units, with SBA and corresponding UDS of land, in each identical floor are as indicated in the table.

If you are planning to buy a 2 BHK unit having SBA of 1,050 sq. ft. in the apartment complex, you would be buying 3.5% of total SBA of 30,000 sq. ft. (1,050/30,000), and corresponding undivided share of land works out to 420 sq. ft. (3.5% of 12,000 sq. ft.).

Ground reality

Presently there is no clear cut guideline in regard to allotment of UDS by registering authorities.

Many small-time buildersnot only show higher SBA but continue to allot lesser UDS of land, resulting in higher losses to buyers. Hence it is essential for buyers to verify whether builder is allotting proper SBA and proper UDS.

Until now (before Real Estate Regulatory Act came into effect), there has been no transparency in declaring actual SBA and corresponding UDS. However if the project is registered under RERA, one can hope, proper carpet area, super built area and corresponding UDS will be allotted.

Even now, where RERA is not applicable (for small apartment complexes constructed on land measuring less than 5,382 sq. ft. and the complex has 8 or less no. of units), the problem of allotting improper SBA and UDS continues.

Aftermath

Many small-time builders reserve 10-20% of UDS for erecting an unauthorised floor (which will not be in the approved plan) for their use and for the use of land owners (if the project is being developed under Joint Development Agreement). Buyers should verify this aspect before deciding to buy an apartment in such projects.

Considering the construction of one extra floor, the builder will allot lesser UDS to all apartment owners. So the density increases. Where there could be 24 families staying, may be 30 families will reside. This results in shortage of basic necessities like water, rise in cost of maintenance, sewage treatment etc. In future, if any regularisation scheme like ‘Akrama – Sakrama’ comes into effect, the lawful owners may have to bear the brunt of paying heavy fine to get their unit regularised, because of the unauthorised floor put-up by the builder.

Due to slow down in sales, many builders have not constructed one/two upper floors, that they had announced earlier and completed the construction and handed over the flats to all buyers.

In most cases, the UDS allotted was as per earlier plan (with more number of floors) and the sale deed, mentioning SBA and UDS of land has been registered. In such cases, it is necessary to seek rectification deed with increased UDS to each apartment, considering the actual total built-up area. Otherwise the balance UDS remains with the builder/land owner.

The owner may feel he may not lose anything, even if he doesn’t seek proper UDS registered in his favour, but in the future he is going lose heavily.

Losing market value

Suppose the owner wishes to sell his apartment after some time, with lesser UDS. He stands to lose market value of the property significantly, which may run into lakhs of rupees.

The owners of apartments with improper UDS, where some UDS of land has not been conveyed and remained with original land owners/builder, face a much bigger blow, when the life of the apartment building nears its end (say after 30-35 years). When all owners decide to re-build the apartment, the original land owners may claim their right over the balance UDS which is not conveyed at the time of sale of each apartment.

In the above case, if the builder decides not to construct third floor due to no demand for sale, a whopping 3,000 sq. ft. UDS of land remains un-allotted and the title (ownership) of the same continues to be in the name of original land owners. When after couple of decades, the apartment building comes up for re-constructing, the original owners of land may demand market value of 3,000 sq. ft. of land, which may run into a few crores of rupees. All apartment owners seeking re-building the complex may have to share the huge amounts or may have to offer few units worth the market value of UDS of 3,000 sq. ft.

Thus improper UDS of land allotted could make apartment owners not only to lose heavily but may haunt owners’ loved-ones, who inherit such properties, with avoidable litigations at a later date.

Hence it is necessary to ensure proper UDS is allotted to all apartment owners in the complex and total UDS allotted equals the total land area. It is advisable to appoint a BBMP licensed Chartered Engineer/Valuer to measure the carpet area, super built-up area and corresponding UDS of land and if any variations are found as compared to agreed terms, it is necessary to get the mistakes rectified in the sale deed.