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Legal Checklist to buy a property from a builder
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BUYING AND SELLING OF PROPERTY BUYING AND SELLING OF PROPERTY
APURVA AGRAWALAPURVA AGRAWAL
ROTARY CLUB OF BOMBAY WORLIROTARY CLUB OF BOMBAY WORLI
MAY 19, 2007MAY 19, 2007
WHAT IS A CHEQUE?
The title of the property should be clear,
marketable and free from encumbrances
All dues on the property should have
been paid
Always use the services of a competent
Advocate for verifying the title of
Property
TITLE
INSPECTION OF DOCUMENTS
Builders liability produce the following documents which shall be part of the Agreement of Sale
(a) Approved plans/specification(b) Commencement certificate(c) I.O.D.(d) Occupation Certificate(e) Building Completion Certificate(f) Title Certificate
Book or Buy your flats only when Builder
has obtained BMC permission’s like I.O.D. ,
sanction of plans and commencement
certificate from the Concerned Authorities
BOOKING / BUYING OF FLAT
CONSTRUCTION OF BUILDING
Flat purchaser should check that the
construction is according to the sanctioned
plans and specification granted by
Concerned Authorities.
The Builder must ensure good quality
materials and proper workmanship
AGREEMENT FOR SALE
Upon receipt of the any payment exceeding 20% of the sale price of the flat, the Builder has to execute the Agreement for Sale
Carpet area of the flats should be clearly and unambiguously defined in the agreement of sale
The nature, extent and description of all AMENITIES and common facilities to be clearly mentioned in the Agreement
PAYMENT SCHEDULE
PAYMENT SCHEDULE should be according
to the progress of the work, under the
provisions of the MOFA, 1963 / MAOA ,1970
The Builder should not enhance (Escalation)
the price of flats on any account whatsoever
once the agreement for sale is executed
except for additional government
levies/taxes/court orders
DETAILS OF FLAT PURCHASERS
The Developer must prepare and maintain
details of other flats purchaser like their
names, flat numbers, addresses, price
charged etc.
STAMP DUTY
Stamp Duty is payable on the higher of the market value of the property or on consideration paid under the agreement
Document has to be adjudicated before stamping
The rate of stamp duty payable is 5%
The stamp duty has to be paid before signing or executing the document i.e. Agreement for Sale
Agreement for Sale has to be registered with the Sub-registrar of Assurances on whose jurisdiction the property is located Registration should be completed within four months from the date of execution of the Agreement for Sale
The present registration fee is 1% of the market value of the property or the consideration whichever is higher subject to a maximum limit of Rs. 30,000/-
REGISTRATION
CHANGE IN PLAN / SPECIFICATION
All conditions with regard to infrastructures should be approved by Municipal authority / Planning authority and fully complied with the same
No alteration, additions or deviations in the plan and specifications of the buildings without the consent of the Flat Purchaser once the same is furnished and disclosed to the Flat Purchaser
DELAYED COMPLETION OF BUILDING
In case of delayed completion beyond the period stipulated under the 'Agreement for Sale’
(a) Demand for refunding the amount received by the Builder / Developer with interest @ 9 % p.a. or as specified in the agreement
OR
(b) Wait for completion and get the possession
of the flat
The Builder should specify in writing the date
on which the possession of flat is to be handed over to the Flat Purchaser and ensure timely possession
The Builder should obtain completion and occupation certificate prior to giving possession of the flat to the Flat Purchaser
POSSESSION
DEFECTIVE CONSTRUCTION
The Builder should attend to all bonafide complaints of defects expeditiously
The defect liability period of the Builder is three years from date of completion of the building
If the Builder fails to rectify the defect in the building, the Flat Purchaser has a right to receive reasonable compensation
ACCOUNT OF PAYMENTS
The Builder should maintain
(a) separate account in respect of sums
received for purposes such as the
capital
for promotion of the society, towards the
maintenance till the society is formed, etc
(b) the same should be utilize only for those
purposes for which it was collected
SOCIETY FORMATION
The Builder has to form the society
Builder should submit an application to the
Registrar within four months after atleast ten
persons or 60% of total flat is sold or have
taken possession of the flats
It is the duty of the Builder to cause the
conveyance of the title and interest in the land
and the building to the society.
REMEDIES
The remedies available to the Flat Purchaser against Builder are the following:
(a) A complaint in Consumer Forum as deficiency of services under Consumer Protection Act 1986
(b) Suit for specific performance under Specific Relief Act, 1963 and Indian Contract Act,1872
(c) Criminal complaint under the Maharashtra
Ownership of Flats Act , 1963
PENALTIES
The penalties that maybe imposed on the Builder are as under:
CONSUMER PROTECTION ACT:
(a) remove the defects complained of ; OR
(b) return the price to Flat purchaser ; OR
(c) pay compensation if any injury is suffered
by the Flat Purchaser ; OR
(d) provide for adequate costs
PENALTIES …Contd
SPECIFIC RELIEF ACT AND INDIAN CONTRACT ACT
(a) The Flat Purchaser can get the specific performance of the breach under
the Agreement for Sale
OR
(b) Adequate Compensation
PENALTIES …Contd
MAHARASHTRA OWNERSHIP OF FLATS ACT , 1963
(a) Contravention of Sec. 3,4,5,10 or 11, leads to punishment for maximum imprisonment of 3 years or with fine or with both
(b) Contravention of Sec 5, leads to imprisonment for a term which may extend to
5 years or with fine or with both
(c) Contravention of any other provisions, on conviction, may be imprisoned for a term
which may extend to 1 year or with fine or with both
THANK YOU
CONTACT US
• UNIVERSAL LEGAL 5th Floor, Kimatrai Building 77/79 Maharshi Karve Road Mumbai – 400 002
• Phone: 2203 4293 - 95 • Fax: 2203 9845• E-mail: [email protected]
