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TAX, ACCOUNTS, LEGAL & HOUSING SOCIETY CONSULTANTS

HOUSING SOCIETY ISSUES

01. Conveyance

Meaning of Conveyance: Conveyance means transfer of title of ownership of immovable property from the original owner/s to the ultimate purchaser/s by executing the conveyance deed. 

Conveyance Deed: For the purpose of transfer of ownership, interest, title in an immovable property an agreement is prepared between the original owner/s and the purchase/ and such an agreement is known as conveyance deed.

Contents in the Conveyance Deed: The conveyance deed is executed between seller/s and purchaser/s of the immovable property. The conveyance deed contains following details:

  • Name and address of the seller/s.
  • Name and address of the purchaser.
  • Description of the property which has been transferred like area of the land, survey no., construction of building, if any, other structures, trees and other immovable fittings standing on such land.
  • A brief description about the original owners, and the chain of transactions executed from beginning till the present vendor/s.
  • Consideration for which transfer is effected.
  • Name of the confirming party, if any like developer, builder, financer etc.
  • Mode of payment of consideration.
  • Other usual terms and conditions between the parties for transfer of ownership, interest, title in the said property.

Responsibility to execute the Conveyance Deed: It is the responsibility of vendors to execute the conveyance deed in favour of the purchaser/s and legally transfer the interest, title in the immovable property to the purchaser/s who have paid the consideration for the same.

Advantages of obtaining Conveyance:

  • Getting the proper title
  • Retaining Additional F.S.I.
  • Property will be free and marketable
  • Loan can be raised by Mortgage
  • Permission for reconstruction possible
  • Construct additional floor by T.D.R.
  • Receive Compensation on Development

Documents required for Conveyance: 

  • Society Reg. Cert : With Society
  • Stamp Duty & Reg Paid Proof : Each individual
  • Agreement for Sale : Promoter to Purchaser
  • Commencement Cert : Municipal Authority
  • C C / O. C : Concerned Authority to Builder
  • Approved Building Plan : Municipal Authority
  • 7/12 Extract : Tahsildar / Concerned Auth
  • Form No 6 Mutation Entry : Revenue Office
  • Search Report / Title Clearance : Advocate
  • Property Card
  • Index II : Sub Registrar of Assurances
  • N A Order : Collector of Districts
  • Development Agreement : Land Owner to Builder
  • Conveyance Deed or Sale deed : Builder to Society

Stamp Duty Aspects: The Society is liable for payment of stamp duty. The Stamp duty already paid on agreements for sale of flats by the members will be adjusted towards total duty leviable on the conveyance as per explanation I to Article 25 of Schedule I of Bombay Stamp Act, 1958. Market value would be applicable as on the date of execution of Agreements by the builder in favour of the flat purchasers provided satisfactory proof of the execution of Agreements is produced and proof for payments by cheques is also given to the stamp authorities at the time of calculation of stamp duty.

FSI/TDR: Under Section 11 of MOFA 1963, after the registration of Society, the Builder is under obligation to take all necessary steps to convey his right title and interest in the building and land to the society within prescribed time. The Builder loses his right of further construction after formation of the society. As undertaking is required to be given by the Builder at the time of registration of application. Society shall be the beneficiary of FSI/TDR even if no conveyance is executed.  However, in the absence of proper conveyance it will be difficult to get the plans sanctioned.  It is better to settle with Builder or to initiate action in Court and to challenge Builders’ rights/benefits.

Remedies & Actions available to complete the conveyance in the absence of cooperation from the builders/landowners: Following remedies are available:

  • File Civil Suit;
  • File Criminal Case;
  • File case in Consumer Court;
  • File case with the DDR – New MOFA Rules.

Now District Deputy Registrar (DDR) has been made competent authority for Conveyance.

Unsold flats: If there are unsold flats, the Society should pay the stamp duty on such flats and register the conveyance deed. Stamp Duty, Registration charges with penalty may have to be paid by the members of flats who have not registered their agreements earlier. Such stamp duty can be collected from the builder or the occupant of the flat/shop by the society, being the statutory liability. In spite of many reminders, if they fail to pay the same, a recovery case can be filed with the registrar u/s 101 of M.C.S. Act, 1960 and recover the same as the arrears of land revenue. If the members have occupied the flat, the same is purchased by an agreement for sale executed after 10.12.1985, and the stamp duty on such agreement is not paid and are not co-operating with the society by paying the required stamp duty at the time of conveyance, the society can inform such details to the collector of stamps. In such cases, the collector of stamps will issue notice u/s 46 of Bombay Stamp Act, 1958 and shall collect the same as arrears of land revenue. After the collector of stamps recovers the stamp duty, the society can execute the conveyance deed without any further payment of stamp duty.

 

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Tel: +91-22-6516 97 30 Email: banerjee.associates@yahoo.com