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Anybody wishing to book a flat with a developers / promoter in India is expected to keep in mind following few basic points before deciding to book a flat on ownership basis.
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Today the societies are opting to go for redevelopment than repair for the following reasons:
How to choose a Property Anybody wishing to book a flat with a developers / promoter in India is expected to keep in mind following few basic points before deciding to book a flat on ownership basis.
card or other revenue record of the land/plot on which the flats are going to be constructed should be attached to the agreement for sale.
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Under the Maharashtra Ownership Flats Act, 1963 a promoter who intends to construct a building of flats has to enter into a written Agreement for Sale with each of the persons who are to take or have taken such flats. It is also provided that the agreement should contain the particulars and also annex to such agreement the prescribed documents or the copies thereof. In case of a building, which is yet to be constructed, the agreement has to contain the particulars regarding the liability of the promoter to construct it according to the plans and specifications approved by the local authority. The other particulars which the agreement should contain are possession date, price to be paid by the purchaser and the intervals at which the installments for the full payment are to be made specifying stage of construction, the precise nature of the body to be constituted of the persons who would take the flats, details regarding the common areas and facilities specifying the percentage of undivided interest in the common areas and facilities appertaining to the apartment agreed to be sold, a statement of the use for which the apartment is intended. The Act also specifies that copies of the title certificate issued (as specified earlier in this manual) and a copy of the approved plans and specification a list of fixtures and amenities including provisions for lifts to be provided/provided for the flat to be sold should be attached to the agreement. A promoter, while he is in possession, and where he collects from persons who have taken over flats or are to take over flats, sums for payment of out goings even thereafter, has to pay all out goings until he transfers the property. The out goings would include ground rent, municipal and other local taxes, taxes on income, water charges, electricity charges, revenue assessment and interest on any mortgage or other encumbrances, if any. One should also ensure that the area of the apartment has been mentioned in the agreement. It is also mandatory for the developer/promoter to convey the land in favour of the society/association of flat owners/condominium/Company within a period of 4 months of completion of the project. In the sale agreement there should be a declaration /representation by the promoter/seller that he has not encumbered the property in any manner whatsoever and entered into any other agreement to sell/lease/license with any other party. It needs to be specified whether the property is vacant or in possession of any other party other than the seller.
Payments of Stamp duty followed by the registration of the agreement are two important acts when one enters into an agreement with a developer/seller. Both, the developer/seller and the purchaser need to be present at the sub-registrar’s office for registering the agreement. Stamp Duty: Stamp duty is a State subject and hence would vary from state to state. The stamp duty in many states is paid as per the True market value as assessed by the Stamp Office. When an agreement is to be stamped, it needs to be unsigned and undated and after the Stamp Office affixes stamps on the agreement, one may execute the agreement. The Stamp Duty payable in various states could be ascertained from the Stamp Duty Calculator provided. Registration of an agreement: The agreement should be registered with the Sub-registrar of assurances under the provisions of the Indian Registration Act. Stamp duty should be paid prior to the Registration. 2
For premises being purchased in a registered co-operative society: Share certificate of the society bearing the name of the seller Previous chain of conveyance/sale deeds, Sub – Registrar’s receipt 37 (I) clearance if applicable 230 A certificate from the Income Tax authorities (to be obtained by seller) Original stamped receipts of payment made to previous sellers No objection certificate from the society for transfer and sale of flat Last receipt for the out goings bill paid to the society and electricity bill Set of society transfer forms for transfer of ownership Certificate of Title from an advocate When one sets out to purchase a flat in a registered co-operative society the documents that need to be checked initially are –
Original stamped receipts for payments made to the previous sellers. Once these documents are vetted by the purchaser’s advocate and the purchaser decides to go ahead with the transaction then intending purchaser could ask the seller to apply to the society to issue a no objection certificate indicating that the society has no objection to transfer the share certificate in favour of the intended purchaser and admitting the purchaser as a member of that society. The certificate should also mention that the seller has no default/outstanding payments to be made to the society as of date. Once such a certificate is obtained one could proceed the Agreement for sale and filing the 37-I form with the Income Tax (if applicable), preparing the sale/conveyance deed /agreement. Apart from obtaining the 37 – I clearance, the buyer should ask for the 230 A tax clearance certificate of the seller which requires to be obtained by the seller from the concerned tax authority. It is also necessary to check the latest payment receipt made by the seller to the society for the out goings to ascertain and ascertain if the seller has paid all the dues to the society. One also should ask for a copy of the last electricity bill paid by the seller. There also should be a mention in the agreement that the said property is not mortgaged to anyone and if there happens to be a mortgage then on or before the date of execution of the sale/conveyance deed, the seller should ensure that the mortgage account is clear. Prior to the execution of the sale/conveyance deed of the property the purchaser should ask the seller to produce a 230 A certificate issued by the Income Tax authorities. For this the necessary application has to be filed in Form no. 34A. This certificate would indicate that the seller has no dues/outstanding in terms of the income tax payable him. As per the Income Tax Act, 1961, this certificate is a mandatory requirement for a property transaction where the value of the transaction is in excess of Rs. 5.00 lacs. Set of society transfer forms, etc for transfer of ownership needs to be duly filled and signed by the seller and purchaser and should be submitted to the concerned Society.
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