Conveyance Problems

Conveyance Problems

v     General

Getting an ownership title for a co-operative housing society is indeed a great problem that haunts several societies in Mumbai and elsewhere. This has become a perennial problem causing anxiety to Society members for no fault of theirs.

The problem of executing a conveyance in favor of the co-operative housing society has become difficult and complicated. The purchasers of flats and co-operative societies are put to great hardship and inconvenience.

Abnormal delays in executing conveyance deeds is worrying many societies since the builder who is supposed to respond first, loses nothing and the flat owners continue to stay in flats which they really do not own on paper. The owner, without the necessary title finds himself in a peculiar situation which needs to be corrected as early as possible by some special measures.

Section 11 of the Maharashtra Ownership Flats Act, 1963 states that promoters should convey the right, title, interest etc. and execute documents according to agreements.

In spite of this mandatory provision, the promoters do not take the necessary steps to complete the title and convey the property to the Builder. The Builders may be co-operative societies or companies or association of flat or apartment owners in the building. The Promoters avoid executing all relevant documents in accordance with the agreement executed under Section 4 of the Maharashtra Ownership Flat Act, 1963. The promoter is expected to execute the conveyance within a prescribed period mentioned in the agreement. However, if the period is not mentioned, he is required to execute the conveyance within the prescribed period under the rules and deliver all documents of title relating to the property which may be in his possession or power. The rules are also prescribed under this Act.

According to rule 9 of the Maharashtra Ownership Flat Act, it is mandatory to take necessary steps to execute the conveyance within a period of four months of registration of the Society or limited company.

It must be noted that promoters are basically Builders or Developers before they enter into agreements with the owners of the land that may be an individual or joint family or a firm or a trust on whose behalf they take the work of developing the property. Many irregular powers of attorney are collected by the Builder/Developers from the persons purchasing the property.

v     Some of The Major Difficulties of not Executing Conveyance are

(i)                  The Original owner of the land finds it difficult to get a certificate under Section 230(A) of the Income Tax Act as he has not cleared his liabilities.

(ii)                Internal disputes between the members of the family, Board of Directors in case of limited companies, or among trustee in case of trust.

(iii)               Difficulty in getting certificate under Urban Land (Ceiling & Regulation) Act, 1976 also creates difficulty in executing conveyance.

(iv)              The promoter delays or avoids the work of executing conveyance as he wants to retain control over ownership of land and building because:

(a)    Directly or indirectly he is benefited if there is additional FSI as well as Transfer of Development Right (T.D.R.) due to change in the Law from time to time for the purpose of construction.

(b)   When the flats are transferred from one purchaser to the other he gets transfer money or a share in the second sale.