The Maharashtra

Ownership Flats
Act, 1963
 Object of the Act
Non-disclosure of key information
✓Rationale behind enacting this Act
✓Applicability of the Act Delay in possession
✓Object ofTo
theprevent
Act abuses and Regulate and
malpractices related to the promote
construction and sale of the flats Misrepresentation in advertising
construction, sale,
management and
transfer of flats on
Financial Malpractices
ownership basis;

Lack of transparency
 Definitions
✓Flat: -
✓“A separate and self-contained premises, which is used or is intended
to be used as a Residence, Office, Show-room, Shop, Godown,
carrying on of any industry or business including a Garage and the
premises forms part of a building.” The term flat also includes an
apartment. The Explanation to the definition provides that even if a
separate bathing, washing, sanitary, etc. arrangement is made between
two or more premises, they shall be deemed to be separate and self-
contained.
✓"Flat" refers to a separate and self-contained set of premises that can be used for
various purposes, such as:
• Residence
• Office
• Show-room
• Shop
• Godown (warehouse)
• Industry or business (if specified)
✓Additionally, the definition of a flat includes:
• A garage
• An apartment
✓Explanation:
✓Even if certain facilities (such as sanitary, washing, or bathing conveniences) are
shared among two or more sets of premises, each set of premises is still
considered separate and self-contained.
 "promoter"
✓"promoter" means a person and includes a partnership firm or a body
or association of persons whether registered or not] who constructs or
causes to be constructed a block or building of flats [or apartments] for
the purpose of selling some or all of them to other persons, or to a
company, co-operative society or other association of persons, and
includes his assignees; and where the person who builds and the
person who sells are different persons, the term includes both;
✓ A "promoter" is defined as:
• A person
• A partnership firm
• A body or association of persons (whether registered or not)
✓ Activities of a Promoter:
✓ A promoter is involved in:
• Constructing or causing the construction of a block or building of flats or apartments.
• Selling some or all of these flats or apartments to:
• Other individuals
• A company
• A co-operative society
• Another association of persons
✓ Additional Points:
• The term "promoter" includes assignees of the promoter.
• If the person who builds the flats or apartments and the person who sells them are different, both are
considered promoters.
✓"to construct a block or building of flats 1[or apartments]" includes of
to convert a building or part thereof into flats 1[or apartments];
 General Liabilities of Promoter
✓(a) Disclosure of Title
✓(b) Disclosure of Encumbrances
✓(c) Inspection of Plans
✓(d) Disclosure of Fixtures and Amenities
✓(e) Disclosure of Design and Materials
✓(f) Possession Date
✓(g) List of Flats
✓(h) Organization of Persons
✓(i) Completion Certificate
✓(j) Disclosure of Outgoings
✓(k) Additional Information and Document Disclosure
✓(l) Display of Documents
✓(m) Advertisement Disclosure
✓(n) Sale Basis
 Section 4 Promoter before accepting advance payment or
deposit to enter into agreement and agreement to be
registered
1. Advance Payment and Written Agreement:
✓(maximum 20% of the sale price)
✓agreement must be registered
2. Contents of Agreement: Particulars to Include:
•Construction Liability: Promoter's liability to construct according to approved plans.
•Possession Date: Date by which possession will be handed over.
•Carpet Area: Extent of carpet area, including separate balcony area.
•Price Details: Price of the flat, including common areas, payment schedule.
•Organisation Nature: Organisation of flat owners.
•Common Areas: Description of limited common areas and facilities.
•Undivided Interest: Percentage of undivided interest in common areas.
•Usage Statement: Intended use and any restrictions.
 Section 4 Promoter before accepting advance payment or
deposit to enter into agreement and agreement to be
registered
✓Copies of Documents to Attach:
▪ Certificate under Section 3(2)
▪ Property Card or relevant revenue record
▪ Approved plans and specifications
3. Registration of Agreement:
▪ Agreement to be presented for registration within the allowed time.
▪ Execution must be admitted by the person executing the document or
their representative
 Section 4 Promoter before accepting advance payment or
deposit to enter into agreement and agreement to be
registered
4. Summons for Execution Admission:
• If the executant does not appear for registration, the registering officer
issues a summons.
• If the executant fails to appear, execution is deemed admitted.
• If the executant denies execution, the registering officer proceeds to
register if satisfied of its validity.
 Section 5. Promoter to maintain separate account of sums
taken as advance or deposit and to be trustee therefor and
disburse them for purposes for which given.
✓Separate Bank Account:
• Promoter must maintain a separate account in a bank for sums taken as advance or
deposit from flat buyers.
✓Purpose of Account:
• Account to include sums for:
• Advance or deposit payments.
• Share capital for co-operative society or company.
• Outgoings (ground rent, municipal taxes, income taxes, water charges, electricity charges,
revenue assessment, mortgage interest).
✓Usage of Funds:
• Funds to be used only for the purposes they were given.
✓Disclosure of Transactions:
• Promoter must provide full and true disclosure of all account transactions on
written demand by a Competent Authority.
 Section 6. Responsibility for payment of outgoings
till property is transferred.
✓ Responsibility for Payment of Outgoings
✓ Promoter's Obligation While in Possession:
• Promoter must pay all outgoings (e.g., ground rent, municipal taxes, income taxes, water charges,
electricity charges, revenue assessment, mortgage interest) while in possession of the property.
✓ Collection from Flat Owners:
• Promoter must continue to pay outgoings if he collects sums from flat owners for this purpose,
even after the flats are taken over.
✓ Transfer of Property:
• Promoter's responsibility to pay outgoings continues until the property is transferred to the flat
owners or their organization.
✓ Liability for Unpaid Outgoings:
• If the promoter fails to pay outgoings before transferring the property, he remains liable to pay such
outgoings and any penal charges even after the transfer.
• Promoter is responsible for any legal proceedings initiated by authorities or persons to whom the
outgoings are payable.
Section 7. After plans and specifications are disclosed no alterations
or additions without consent of persons who have agreed to take the
flats; and defects noticed within [three years] to be ractified
✓ No Alterations Without Consent:
• After disclosing approved plans and specifications to flat purchasers, the promoter must not:
• Make any alteration in the flat(s) without the previous consent of the purchaser.
• Make any other alterations or additions in the building without the previous consent of all flat purchasers.
✓ Construction as per Plans:
• The building must be constructed and completed according to the disclosed plans and specifications.
✓ Rectification of Defects:
• If any defect in the building or materials used, or any unauthorized change in construction is noticed within
three years of possession, the promoter must:
• Rectify the defect without additional charge where possible.
• Provide reasonable compensation if rectification is not possible.
✓ Dispute Resolution:
• Disputes about defects, unauthorized changes, or compensation to be referred
for decision within three years of possession to:
• A competent authority in urban agglomerations.
• A Deputy Chief Engineer or equivalent officer in other areas, as specified by the State Government.
• The decision by the designated authority or officer is final.
 Section 8. Refund of amount paid with interest for failure
to give possession within specified time or further time
allowed
✓Conditions for Refund:
• The promoter fails to give possession of a completed flat by the specified date or any
further agreed date.
• The promoter is unable to give possession due to reasons beyond their control or their
agents' control, even after an additional period of three months.
✓Promoter's Charge on Property:
• The refunded amount and interest will be a charge on the land and construction where the
flat was to be constructed.
• This charge is subject to any prior encumbrances.
✓Liability:
• The promoter must refund the amounts received for
the flat on demand.
• The refund includes simple interest at 9% per annum from the date of
receipt until the date of refund.
9. No mortgage etc. to be created without consent of
parties after execution of agreement for sale
✓Prohibition on Mortgage or Charge:
• After executing an agreement to sell a flat, the promoter cannot mortgage or
create a charge on the flat or land.
✓Requirement for Consent:
• The promoter must obtain the previous consent of the persons who take or
agree to take the flats before creating any mortgage or charge.
✓Effect of Unauthorized Mortgage or Charge:
• Any mortgage or charge created without the required
consent, after the agreement is registered, will not affect
the rights and interests of the persons who have agreed
to take the flats.
 Section 10. Promoter to take steps for
formation of co-operative society or company.
✓ Formation Requirement:
• Once the minimum number of persons required to form a co-operative society or company have taken flats,
the promoter must:
• Submit an application to the Registrar within the prescribed period for registration of the organization.
• Join in the application for membership for flats not yet taken.
✓ Right to Dispose:
• The promoter retains the right to dispose of the remaining flats in accordance with the Act.
✓ Competent Authority's Power:
• If the promoter fails to apply within the prescribed period, the Competent Authority can:
• Direct the District Deputy Registrar, Deputy Registrar, or Assistant Registrar to register the
society upon receiving an application from the flat owners.
• Verify the authenticity of the application and give the promoter an opportunity to be
heard before directing registration.
✓ Apartment Ownership Act:
• If the promoter submits the property to the Maharashtra Apartment Ownership Act, 1970,
by registering a Declaration:
• The promoter must inform the Registrar under the Maharashtra Co-operative Societies Act, 1960.
• It is unlawful to form any co-operative society or company for such property.
Section 11. Promoter to convey title, etc., and execute
documents, according to agreement
✓Completion of Title and Conveyance:
• Promoter must complete his title and convey his right, title, and interest in the land
and building to:
• A registered co-operative society.
• A company.
• An association of flat takers or apartment owners.
• Must execute all relevant documents as per the agreement under Section 4.
• If no period is agreed upon, conveyance must be executed within the prescribed
period.
• Deliver all title documents relating to the property.
✓Filing Conveyance Copy:
• Promoter must file a copy of the conveyance with the Competent Authority within
the prescribed period.
 Section 11. Promoter to convey title, etc., and
execute documents, according to agreement
✓ Application for Unilateral Conveyance:
• If the promoter fails to execute the conveyance, members of the co-operative society, company, or association
of apartment owners can:
• Apply to the Competent Authority with true copies of registered sale agreements and other relevant
documents for a certificate for unilateral deemed conveyance.
✓ Issuance of Certificate:
• The Competent Authority will:
• Review the application within six months.
• Verify the authenticity of documents.
• Provide the promoter an opportunity to be heard.
• Issue a certificate to the Sub-Registrar if satisfied, certifying the case for unilateral conveyance.
✓ Registration of Unilateral Conveyance:
✓ The Sub-Registrar will:
▪ Issue summons to the promoter to show cause against the unilateral instrument
▪ Provide an opportunity for hearing to both parties
▪ Register the instrument as 'deemed conveyance' if satisfied.
Section 12 General Liabilities of flat-taker
✓Payment Obligations:
✓Cooperation in Co-operative Society or Company Formation:
✓Non-Compliance Penalty:
 Section 12 A Manager not to cut off, withheld,
curtail or reduce essential supply or service
✓Prohibition on Cutting Off Essential Services:
• Promoters, managers, or anyone responsible for building management cannot, without
just cause, cut off or reduce essential supplies or services to a flat owner or occupant.
✓Application to Court:
• Flat owners or occupants can apply to the Court for restoration of essential services if cut
off without just cause.
✓Court's Direction:
• If the Court finds essential services were unjustly cut off, it will order the manager to
restore them by a specified date.
✓Penalty for Non-Compliance:
• Managers who fail to restore services by the specified date may be fined up to one
hundred rupees per day for continued non-compliance.
✓Jurisdiction: Court of Small Causes in Bombay, Court of Civil Judge (Senior Division)
elsewhere3
 Section 12 A Manager not to cut off, withheld,
curtail or reduce essential supply or service
✓ • Punishment for Contravention:

• Managers who contravene this provision may face up to three months imprisonment, a fine, or both.

✓ • Offence Classification:

• The offence is cognizable and can only be tried by a Metropolitan Magistrate or a Judicial Magistrate of the
First Class.

✓ • Definition of Essential Services:

• Essential services include water, electricity, lights in passages and staircases, lifts, and sanitary services.
 Section 13 Offences by promoters (and
consequences on conviction)
✓ Punishment for Non-Compliance (Sections 3, 4, 5, 10, 11):

• Promoter failing to comply with these sections may face up to three years imprisonment, fine, or both.

✓ Criminal Breach of Trust (Section 5):

• Promoter committing breach of trust with advanced or deposited amounts may face up to five years
imprisonment, fine, or both.

✓ Other Provisions Violations:

• Promoter failing to comply with other provisions of the Act or rules may face 6 months to 1 year
imprisonment, fine between Rs. 10,000 and Rs. 50,000, or both.
 Section 13 Offences by promoters (and
consequences on conviction)
✓ Disqualification from Construction:

• Convicted promoters (except under Section 12A) disqualified from undertaking flat construction for five
years post-conviction. Existing permissions unaffected.

✓ Competent Authority's Role:

• Authority forwards convicted promoter's name to local authorities, directing non-grant of construction
permissions during disqualification.

✓ Local Authority Compliance:

• Local authorities must not grant construction permissions to disqualified promoters for the specified period.
✓1. Enhanced Sentencing Powers (Section 13A):
Metropolitan Magistrates or Judicial Magistrates of the First
Class can impose sentences of imprisonment, fines, or both as
provided under the Act, exceeding their usual powers under
Section 27 of the Code of Criminal Procedure, 1973.
✓2. Public Servant Status (Section 13B):
The Competent Authority is considered a public servant under
Section 21 of the Indian Penal Code.
✓3. Judicial Proceedings (Section 13C):
Proceedings before a Competent Authority are deemed judicial
for purposes of Sections 193 and 228 of the Indian Penal Code.
✓4. Civil Court Status (Section 13D):
The Competent Authority is considered a Civil Court for purposes
of Sections 345 and 347 of the Code of Criminal Procedure,
1973.
✓5. Legal Protection (Section 13E):
No suit, prosecution, or legal proceedings can be initiated against
the Competent Authority for actions done in good faith under the
Act.
 Section 14 Offences Committed by
Companies
✓ Liability of Company and Individuals:

• If a company commits an offence, individuals in charge at the time are also deemed guilty.

• Both the company and responsible individuals are liable for punishment.

• Exception: No liability if the individual proves lack of knowledge or due diligence.

✓ • Consent or Negligence (Section 14(2)):

• Offences committed with consent, connivance, or negligence of directors, managers, secretaries, or officers make them liable.

✓ Definitions:

• Company: Includes body corporate, firm, or association of individuals.

✓ Director: In a firm, means a partner in the firm.

 Section 15 Rule-Making Power
of State Government
• Authority to Make Rules:
• The State Government can make rules by notification in the Official Gazette.
• Rules are subject to prior publication.
• Specific Provisions:
Section 3: Design, materials, and disclosure requirements.
• Section 4: Form of agreement.
• Section 10: Registration application period for co-operative society or company.
• Section 11: Period for executing the conveyance.
• Other Matters: Any additional matters prescribed by rules.
• Legislative Oversight:
• Rules must be laid before each House of the State Legislature for 30 days.
• Both Houses can modify or annul rules within this period.
• Modifications or annulments do not affect prior actions under the rule.
 Section 16. Act to be in addition to TP Act and
to over ride contract to the contrary
• Supplementary to Transfer of Property Act, 1882:

• The provisions of this Act are in addition to those in the Transfer of Property Act, 1882.

• Superseding Contrary Contracts:

• MOFA provisions take effect even if they contradict any existing contract.