Odisha govt introduces new law for apartment ownership

Months after withdrawing the Odisha Apartment (Ownership & Management) Bill, 2023, from the Assembly, the state government has notified the same in the form of an ordinance to consolidate the laws relating to ownership of individual apartments in buildings and make the state compliant to Real Estate Regulatory Authority (Rera) Act 2016. The new ordinance has been introduced to protect ownership of an individual apartment in a building with an undivided interest in common areas and facilities. 

According to a recently issued gazette notification, the ordinance would extend to the entire Odisha and would be applicable to all buildings or apartments converted into apartments on leasehold land or on freehold land if the lease for such land is for a period of thirty years or more. The notification further stated that all apartments used or proposed to be used for residence, office, practice of any profession or for carrying on any occupation, trade or business or for any other type of independent would be governed by the provisions of this ordinance.

Under the ordinance, common areas like staircases, corridors, lifts, play areas and the entire land of apartments will be registered in the name of buyers’ association. The ordinance states, “Every person to whom any apartment is allotted, sold or otherwise transferred by the promoter, whether before or after commencement of this ordinance, shall, subject to the other provisions of this ordinance, be entitled to the exclusive ownership and possession of his apartment, and be entitled to such undivided interest in the common areas and facilities as may be specified in the deed of transfer of apartment and such undivided interest shall be computed by taking, as a basis, the built up area of the apartment in relation to the built-up areas of all the apartments in the building”.

However, the ordinance will not apply to a building used as the office of a government department or undertaking or in cases where the building is owned and used by the owner himself or for letting it out to others. Odisha is the first state to facilitate the formation of an ‘association of allottees’ – a body that will administer the affairs of the apartment project or property including the common areas and facilities in accordance with the provision of the ordinance. 

The association has to be formed immediately after booking seven or 50% of the apartments, whichever is lower. “The promoter shall be considered as one member of the association and shall have one voting right irrespective of the number of unsold apartments in its possession and shall cease to be a member of the association as and when it is not in possession and has transferred all the apartments in the project.” Similarly, an allottee will cease to be a member of the association if the allotment letter is cancelled by the promoter at any point before the execution of the deed of transfer.

The promoter has to submit a declaration to the Competent Authority in respect of the building, whether constructed before or after the commencement of this Ordinance, within 30 days of issue of occupancy certificate. Each allottee or apartment owner, as the case may be, has to comply strictly with the bye-laws and with the covenants, conditions and restrictions set forth in the Deed of Transfer of Apartment and failure to comply with any of them shall be a ground for action to recover sums due for damages, or for injunctive relief, or both, by the association of allottees, or in a proper case, by an aggrieved apartment owner, the notification added.