Case law, Tamil Nadu land law
Appeal No.25 of 2023
The Tamil Nadu Real Estate Appellate Tribunal issued its order in Appeal No.25 of 2023 on 11 September 2023, recording a compromise between Nangooram Builders Private Limited and the Nangooram Namma Veedu House Owners' Welfare Association. The compromise modifies the Tamil Nadu Real Estate Regulatory Authority order dated 16 December 2022 by setting aside its restriction on third party transfers and allowing the Kondattam Building to be transferred with the association's consent, while protecting residents' continued use of its facilities.
What the tribunal decided
The Tamil Nadu Real Estate Appellate Tribunal disposed of Appeal No.25 of 2023 on 11 September 2023 in accordance with a Joint Memorandum of Compromise signed by the parties and their lawyers. The compromise forms part of the tribunal's order, and the tribunal did not separately decide the underlying dispute on its merits.
The appeal was filed by Nangooram Builders Private Limited and its Managing Director, Rajasekar T, against the Nangooram Namma Veedu House Owners' Welfare Association. It challenged the Tamil Nadu Real Estate Regulatory Authority order dated 16 December 2022 in Complaint No.5 of 2022.
Effect on the earlier regulatory order
The compromise recorded in Appeal No.25 of 2023 changes the earlier restriction that prevented the appellants from transferring any part of the project land measuring 5.36 acres to a third party.
Key settlement terms include:
- The association agreed to set aside paragraph (iv) of the Tamil Nadu Real Estate Regulatory Authority order dated 16 December 2022.
- The Kondattam Building may be sold or transferred to a third party only with the association's consent.
- A transfer cannot prevent association members from using the building's facilities.
- Members may use those facilities on a cost sharing basis and at a nominal cost determined by the building's Managing Committee.
- The compromise states that the layout's common areas had already been handed over to the relevant local body.
The source does not record a separate tribunal ruling on the earlier directions concerning project registration, the penalty of Rs.50,000, transfer of administration, or delivery of documents and plans.
Management and maintenance
The compromise requires the appellants and the association to create a joint Managing Committee for the Kondattam Building before 1 December 2023. The committee is responsible for facilities, security, medical and mess services, equipment maintenance, budgets and monthly assessments. The appellants must pay accrued expenses, including taxes, until the committee is formed.
The appellants must pay maintenance for unsold plots at rates fixed by the association, calculated proportionately each month. After a plot is sold, its purchaser must contribute the maintenance cost for that vacant plot.
Property and future buyers
The scheduled property is the Kondattam Building and land in Survey No.103 part, covering Plot Nos.34, 35, 36, 53, 54 and 55 at Nangooram Namma Veedu, Muthur Village, Palayamkottai Taluk, Tirunelveli District. The total stated area is 7,346 square feet.
Any new buyer of the Kondattam Building is bound by the original agreement or sale deed, if any, and the Joint Memorandum of Compromise.
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Common questions
Can Nangooram Builders sell the Kondattam Building without the owners' association agreeing?
No. The compromise permits sale or transfer to a third party only with the consent of the Nangooram Namma Veedu House Owners' Welfare Association.
Will residents lose access to the Kondattam Building if it is sold?
No. A sale or transfer cannot prevent association members from using its facilities, subject to cost sharing at a nominal cost determined by the Managing Committee.
Who must pay maintenance for unsold plots?
The appellants must pay maintenance for unsold plots at rates fixed by the association on a proportionate monthly basis. Once a plot is sold, its purchaser must contribute the maintenance cost for that plot.
Does the compromise bind a future buyer of the Kondattam Building?
Yes. The compromise states that the original agreement or sale deed, if any, and the Joint Memorandum of Compromise will bind the new buyer.
