Builders Cannot Keep Ownership Of Society Open Spaces After Handover: Bombay HC

Mumbai: Bombay High Court has observed that open spaces meant for residents’ use in cooperative housing societies cannot be retained by developers for their own control or ownership. Such spaces are an inseparable part of the residential project and are meant for the collective use of all residents, as stated by the court. 

This observation emerged from a significant ruling in which a petition was filed by a cooperative housing society in Bhandup. The society had challenged an order denying the transfer of rights over the building’s base area and the surrounding open spaces. Justice Amit Borkar, while hearing the case, ruled in favour of the society and emphasised that developers cannot selectively transfer only certain portions of the property. 

According to the report, the society was developed by Shriji Builders and established in 2015. Under the Maharashtra Ownership Flats Act (MOFA), the residents had later sought a deemed conveyance, claiming that the developer had failed to transfer the land and related to the society. The dispute dates back to October 2023, when the Deputy District Registrar (DDR) granted a deemed conveyance to the housing society. However, the approval was limited only to the plinth area, meaning the ownership rights were restricted to the constructed portion of the building.

Unsatisfied with the decision, the society approached the Bombay High Court and demanded inclusion of open spaces, common facilities and undivided proportionate rights over recreational areas within the property.

Despite the earlier proceedings, the DDR once again refused to grant rights over the open and common areas. This forced the society to move the High Court for a second time.

The court was informed that although the society had been registered in 2015, developer Shreeji Developers had still not executed the conveyance deed in favour of the society.

The developer of the building argued that only the building’s base area and a small surrounding portion should be transferred to the housing society, while the larger open spaces and recreational areas should remain under the builder’s control. 

Following this, the Bombay High Court rejected this argument. The court said that open spaces, access roads, ventilation areas, parking movement spaces and other common facilities are essential for residents and cannot be separated from society.

“Even if such spaces are compulsory under building rules, builders cannot keep ownership of them after handing over the project to society,” as said by the High Court, directing officials to issue a fresh deemed conveyance certificate to the society within eight weeks, while cancelling a 2025 order passed by the authority.

 The court also clarified that even if such spaces are compulsory under building rules, builders cannot keep ownership of them after handing over the project to the society.

Cancelling a 2025 order passed by the authority, the High Court directed officials to issue a fresh deemed conveyance certificate to the society within eight weeks.

The ruling is considered important for housing societies across Maharashtra, as it strengthens the rights of residents over common and open spaces in residential complexes.