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The Odisha state cabinet, chaired by Chief Minister Naveen Patnaik, has given its approval to the Odisha Apartment (Ownership & Management) Bill, 2023, to make the laws governing housing projects comply with the Real Estate (Regulation and Development) Act, 2016. The bill is expected to be tabled in the current session, after the Orissa high court expressed hope that the state government would be ready with a RERA-compliant bill during the ongoing session scheduled till April 6.
According to a senior government official, the bill will require the formation of associations of allottees of housing projects before the first sale deed of any flat in an apartment. The registration of the common areas of the apartment, the entire land, staircases and play areas will be registered in the name of such associations, whereas, under the existing provisions, the common areas were registered proportionately in the name of house buyers.
A Bhubaneswar-based apartment owner, Bimalendu Pradhan, has challenged the validity of the Odisha Apartment Ownership (Amendment) Rules, 2021, on the grounds that it is contrary to the provisions of the Real Estate (Regulation and Development) Act, 2016. However, the two-judge bench of Chief Justice S Muralidhar and Justice M S Raman dismissed it stating that the state government had come up with the bill after the HC had directed it to come up with a RERA-compliant Apartment Ownership and Management Bill enacted so that all anomalies are fully addressed.
The HC had made enactment of a RERA-compliant apartment ownership and management bill a pre-condition for lifting its ban on sale deeds without adhering to the RERA norms. On May 12 last year, the high court had ordered an immediate halt to registration of sale deeds related to apartments in cases in which the builders do not specify transfer of common areas in favour of the Association of Apartment Owners. The HC had made it clear that actual registration of sale deeds where sharing of common areas has been conveyed to individual owners cannot be legally sustained as it is inconsistent with the requirement of RERA Act.
The Amended Rules of 2021 provide that the process of formation of an association of apartment owners shall start only after eight apartments have been sold or 33% of the apartments have been occupied. But the RERA Act provides that an association of allottees should be formed and be in existence when the majority of the booking in a project has taken place, and in any event before the first sale of an apartment in a project takes place.
The implementation of the Odisha Apartment (Ownership & Management) Bill, 2023 will lead to the establishment of more transparent regulations for apartment owners in Odisha. It will ensure that the common areas in apartments are properly registered and owned by the associations of allottees, rather than being registered proportionately in the name of individual buyers. This will provide greater protection to apartment owners and ensure that they are better able to address any issues or concerns related to their apartment buildings.
Moreover, the bill will also help to make the housing industry in Odisha more compliant with the Real Estate (Regulation and Development) Act, 2016, which will lead to greater transparency and accountability in the sector. This will help to promote the interests of both buyers and sellers of apartments and ensure that there is greater trust in the housing sector in Odisha.
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