Cessed and Non-cessed Buildings -- basics

A lot of people don't know the exact meanings of cessed and non-cessed buildings. Especially when it comes to redevelopment, repairs and reconstruction, or simply, transforming the ownership of a building, these terms are commonly used.


This is simply because the Maharashtra Housing and Area Development Act, 1976 (MHADA) makes special provisions for repairs and reconstruction of "cessed" buildings. So what is a cessed building?


A logical deduction would imply that a building that pays cess -- a tax commonly referred to as the "repair fund"- is termed as a cessed building. And it's ironic that the law outlines plenty of provisions for undertaking repairs and reconstruction for/ of cessed buildings but not a single one deals with that of non-cessed buildings. This lacuna of law, has led to a lot of legal advisors to conclude that any building which does not pay cess, is a non-cessed building, and whatever provisions are applicable to a cessed building, the same is not extended to a non-cessed one.


I know this interpretation is not without faults, and there are people (even those who are not of a legal background) are asking the government to clarify the status of non-cessed buildings. What do they do if they need funds for repairs? Is it a clear divide of funds between the tenants and the landlords, under the Transfer of Property Act, 1882 or is it the clear demarcation of responsibilities between the landlord and the tenant under the Maharashtra Rent Control Act, 1999?


It is high time that the government comes out of the shadows and sheds some light on this.


Now, back to cessed buildings. Under MHADA, different provisions are applicable to different categories of cessed buildings. What an overdose of legal bifurcation! The bifurcation basically happened so as to understand the amount of cess leviable on buildings as per their date of creation/ existence.


S. 84 of MHADA says:
Category A of cessed buildings - building erected before 1 September 1940

Category B of cessed buildings - building erected between 1 September 1940 and 31 December 1950 (both days inclusive)

Category C of cessed buildings - building erected between 1 January 1951 and 30 September 1959