Parking Spaces: The Conundrum

Part 1 of a two-part article, this article explores the evolution of control and allotment of parking spaces and the current situation with regards to the same.
Mansukhlal Hiralal & Co - Purvi Asher, Veena Hari
Mansukhlal Hiralal & Co - Purvi Asher, Veena Hari

Disputes over parking space allotments are certainly not unknown nor are they uncommon. Lack of space, along with lack of clarity in law are the leading causes of these disputes, especially in cities like Mumbai, Maharashtra. This article is part 1 of our quest to explore the evolution of control and allotment of parking spaces and the current situation with regards to the same.

Up until the application of Real Estate (Regulation and Development) Act, 2016 (“RERA”), the governing laws for the promotion, construction, sale, management, and transfer of flats in Maharashtra was controlled by the Maharashtra Ownership of Flats Act, 1963 (“MOFA”).

MOFA lays down that the common areas are to be transferred to the Co-operative Housing Society (“CHS”). However, it failed to define “common areas”, it was hence unclear if parking spaces would be included thereunder. Alongside, it was observed that certain promoters had been selling parking spaces within the building premises for monetary consideration. This led to numerous disputes, which were eventually resolved in Nahalchand Laloochand, wherein the Apex Court laid down that parking areas, whether open to the sky or stilted portion, fall within the purview of “common areas and facilities” under MOFA. Further it was clarified that parking spaces are not independently saleable.

Going on the premise that parking spaces form a part of common areas and are to be transferred to the CHS, the Model Bye-laws (2014) (“Model Bye-Laws”) brought in by the Maharashtra State under the Maharashtra Co-operative Societies Act, 1960 (“MCS Act”) provides that the CHS will control the allotment of parking spaces.

The Model Bye-Laws states that the Society shall frame and adopt Parking Rules to regulate the Parking slots and the allotment of Parking Space shall be made by the Committee on the basis of "First Come First Served", for available parking slots. Where the number of eligible Members for parking slots is in excess of the available parking slots, the Managing Committee shall allot parking slots on annual basis by fair and transparent process, in concurrence with the General Body regulations.

Hence, it became clear on a combined reading of MCS Act, Model Bye-Law and the judgement of Nahalchand Laluchand, that parking spaces form a part of the Common Area and are to be regulated by the Housing Societies, and further, they are not saleable for monetary consideration.

The introduction of RERA in 2016 brought in certain alterations in the status of parking lots. RERA provides a definition of common areas, to the specific inclusion of “open parking areas”, and hence to the specific exclusion of “covered parking spaces” and “garages” from the definition of common areas.  This exclusion shows a slight departure from the earlier established view by virtue of the Nahalchand judgement which inter alia included closed parking spaces within the definition of common areas.  

Section 17 and Section 19 of RERA establish the same position as the Model Bye-Laws, i.e. the possession and control of the common areas lie with the CHS. However, despite the altered definition of common areas, the covered parking spaces are still kept within the purview of the CHS control by virtue of Model Bye Laws which are still in force.

To the misfortune of the public and to the fortune of the legal academicians, the plot further thickens.

The Maharashtra Real Estate Regulatory Authority (Maha RERA), recognizing the growing need for proper regulation of parking spaces, brought out a notification in 2021(“Notification”) under the RERA Act. It gives the following straight forward rule as to the allotment of parking spaces in real estate projects:

Open parking areas, garages, and covered parking spaces should be specifically marked and numbered at the real estate project site in accordance with and as per approved/sanctioned plans and tagged to the apartment to which it is allotted.  

However, quite contrary to the intent, the Notification when read in consonance with other statutory rules governing the matter, the arena gets more ambiguous than what we started out with.

As seen above, the CHS has a claim to the common areas under RERA alongside the control given to CHS by virtue of the Model Bye-Laws. However, the Notification, effectively contradicting RERA, states that the Promoter shall allot individual parking spaces, including the open parking spaces which form a part of common areas, to specific apartments and thereby to the respective allottees. Hence, now there are effectively 2 claimants of parking spaces. Moreover, when the claim to common areas eventually is handed over to the CHS as per RERA provisions, it remains unanswered if the allotment of open parking spaces made by the Promoter under this Notification is of any value or not.

Further, the initial control over the parking spaces, by virtue of the Notification, stands with the Promoter. Once he allots a parking space to any specific apartment, the right to use the same is endowed onto the allottee of the respective apartment. The control once again shifts to the CHS by reason of Model Bye-laws and the general practice in force up till now. It is hence quite evident that ambiguity as to parking spaces has once again crept in. 

Moreover, it hasn’t been made clear what the meaning of allotment by the Promoter of parking spaces means. Whether the allotment be for additional consideration by the apartment allottee or whether it be for consideration included within the consideration for the apartment, it is not clear if the same amounts to any sort of claim of the allottee as to that specific piece of land constituting the parking space or is the allottee’s claim subject to any claim of the CHS over the parking spaces.

In order to avoid a new set of disputes arising from the above stated ambiguities, it is pertinent at this stage to bring all the governing statutes with respect to parking spaces in consonance with each other such that all scope of ambiguities is done away with.

Further the Notification permits and regulates the sale of closed parking spaces and garages and to that extent overrides the Nahalchand judgment. The following part of this article explores the arena further.

Purvi Asher is a Partner and Veena Hari is an Associate at Mansukhlal Hiralal & Co.

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