Banking Law

Law to know while purchasing Apartment (Apartment Ownership Act)

Here we will discuss the law of Apartments (Apartment Ownership Act) ;


What is an Apartment– A part of constructed area of the property, provided by the promoter/developer in a Multi-storied building to be used independently for residence or office or for the practice of any profession or for carrying on of any occupation, trade, or for business or such other type of other users, with a direct exit to a public street, road or highway or to a common area leading to the such street, road or highway, is “APARTMENT.

A person becomes an Apartment (Flat) owner only after payment of the entire consideration and when the apartment is finally transferred or sold to him by the promoter/owner, as the case may be, by executing a Registered Sale Deed in his favor. Very clear here that an allottee/transferee shall not become entitled to the ownership and possession of that apartment and the common areas, allotted to him until full payment has been made of the consideration and the Sale Deed is duly executed in his favor.

Here it will be relevant to clear that agreement to sale is a legally enforceable contract, wherein terms and conditions are mentioned and rules of specific performance under chapter II of the Specific Relief Act.  is applicable.  But to complete the contract, execution of a Registered Sale Deed is required.

Who is entitled to execute Regd. Sale Deed-

There are two conditions, first is where the owner is himself a promoter and the second is the owner is not a promoter but has executed a development agreement in favor of the developer/promoter. If the owner is himself a developer, there is no legal issue. The owner has entitled to execute and to get the sale deed registered in favor of the purchaser. But where the owner is not a developer and has executed a development agreement in favor of a developer/promoter, the owner shall execute and register a development agreement, stating all the terms and conditions of the agreement including the portion of the building and land to be shared by the Developer/promoter and the owner.  The agreement shall also include that after the completion of the construction of the building, the respective share/constructed area of the building and the proportionate common areas of the owner and the developer shall be absolute. They will be entitled to sell/transfer their shares separately.


Other points to view-

  1. The project/building must be registered under Real Estate (Regulation and Development) Act. 2016. This was enacted to safeguard the interest of the Landowner, developer, and as well as an apartment owner. In case of a violation in construction and/or in dispute between the parties, one can go before the authority to safeguard his interest.
  2. If the building is complete, there must be a Completion certificate, duly issued by the competent authority certifying that the real estate project has been developed according to sanctioned plan, layout and specifications, as approved by the competent authority under the local laws
  3. The sale deed should be executed in accordance with the provisions and conditions provided under the Apartment Ownership Act
  4. It is prescribed to collect all the title documents, development agreement, Power of Attorney, duly approved House building Map, RERA certificate, Completion Certificate and other relevant documents before entering into an agreement to sell the apartment. And the same documents should be verified by the competent lawyer in due course.



This opinion has been derived from the perusal of Law and practice. I am in the view that the above opinion may help to safeguard the interest of the purchaser.