The concept of apartment ownership has now since developed and is an established proposition. It is an advance form of joint ownership or co-ownership of a property. The partition means a partition with metes and bounds having nexus to the land. The partition used to mean division of the land as well. If the land is not divisible by metes and bounds, any division of the structure would used to be regarded as joint ownership or co-ownership. But with the paucity of land in urban areas multi-storeyed buildings have come up, where division of land is not feasible. The concept of apartment ownership has come into being with proportionate share in the land occupying defined portion of a building, comprising of a flat together with right to enjoy the common areas and common facilities, without being joint owners or co-owners/sharer. With the advent of this concept following the necessity of the society and the economic development, development schemes are being undertaken. A group of promoters had come up as developers of such schemes where the owners of the land are unable to venture to undertake the development of their land on account of various reasons, namely, paucity of funds or absence of expertise etc. When such development agreement is entered into between the owners and the developers, the developers by reason of such development agreement are not mere agents, of the owners. Inasmuch as by reason of such development agreement, the developer apart from being an agent of the owners, acquires an interest in the property and does not remain a stranger to the property.
The development agreement is a kind of assignment of interest in the property somewhat similar to an agreement for sale. The impact of Section 53-A, T. P. Act in a case where possession is delivered, is yet to be examined. Therefore, it cannot be denied that the developer, though a stranger, has acquired interest in the property after the development scheme is undertaken.
When the owner enters into an agreement for development with a developer, the development undertaken by the developer is definitely that of the owner through the developer, who is also an agent as well. By reason of such development agreement as agent of the owner, the developer acquires an interest in the property being subject-matter of development and agency, by reason of Section 202 of the Indian Contract Act, 1872 (Contract Act), An agency, in which the agent acquires interest in the property being the subject-matter of the agency, cannot be terminated to the prejudice of such interest of the agent in the absence of an expressed contract.
The developer is an agent. By reason of the development agreement, the developer has acquired an interest in the property. Under Section 204 of the Contract Act, a principal is precluded from revoking the authority given to the agency, once the agent has partly exercised such authority, in respect of action/ obligation arising from acts already done in the agency. In other words, after the agent exercises the authority conferred upon him by the principal in part and by reason of such acts so done, some obligations do arise, then the principle cannot terminate the agency. Now if Developer constructed some of the buildings and delivered possession to some of such intending buyers. He is obliged to provide for the facilities provided in the scheme. He is obliged to such intending buyers, to perform those parts of the acts, which were conferred upon him. Therefore, in such a situation the principal is precluded from revoking such contract.
- His right is in a suit for specific performance or damages.
- In the absence of any agreement with the co-owners, the developer cannot develop the property except the portion covered under the agreement.