• Seller as consenting witness buying unreg flat via assignment

I am planning to purchase an unregistered 2 BHK flat under resale in Bangalore.
Party S who resides in China had executed Construction and Build agreement with Builder B in Apr, 2013 and paid 0.1% stamp duty.
So far till date, he has paid 90% of the sale value and had not taken any loan for the same.
Property is not yet registered on his name and it recently got OC and CC.

This is how we planned to proceed to transact. 

Me and Party S will sign the MOU first.
I will pay the impending amount to builder on behalf of Party S.
Party S gets the NOC from builder to transfer the property on my name.
Builder will execute the assignment deed in which Party S will be assigning all his rights mentioned in build and construction agreements to me. Builder will be signing the same as Confirming/Consenting witness.

Since the owner is not available in India, he wont be signing as confirming party or consenting witness during sale deed registration. He doesn't even have a registered GPA who can sign on his behalf.

 Is it recommended to register the property on my name from builder directly without his reference in sale deed? Does it add any complications when I resell the property in furture?
 Can Party S or his descendants in future can claim that it was done under duress/coercion since he is not appearing during registration process anyways.
Asked 7 years ago in Property Law
Religion: Hindu

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7 Answers

1) it is necessary to peruse documents cited by you to advice

2) owner should execute registered GPA in favour of third party to sign on his behalf if he is unable to remain personally present

3) reference to owner must be done in sale deed

4) it would complicate the issue in case you resell property in future

5) ideally tripartite agreement should be executed between owner builder and you

6) contact a local lawyer

Ajay Sethi
Advocate, Mumbai
95208 Answers
7610 Consultations

5.0 on 5.0

1. Without the signature of the landowner who is to be made party to the deed no valid title would pass on to you.

2. So if the landowner does not become a confirming party to your sale deed, do not buy the proeprty. Your titile would not be perfect.

3. If landowner signs the deed and Party S also puts his signature the title would be transferred to you provided the said proeprty was purchased by S from his own fund .

Devajyoti Barman
Advocate, Kolkata
22920 Answers
498 Consultations

5.0 on 5.0

Hi

Since Party S has entered into an MOU with you and that there is also a No Objection certificate issued (ideally from Party S to Builder), there is no requirement for presence of Party S at the time of builder registering the property in your name.

So the steps should be as follows:

1) MOU between Party S and you.

2) No Objection certificate from Builder and Party S for registration of property in your name.

3) Assignment deed between Builder and Party S in which party S will assign his rights in building and construction agreement to you.

4) The builder can register the property directly to you with out Party S .

5) Party S or his descendants cannot claim that the transaction was done under duress or coercion as

a) Party S is in China and out of physical reach of both you and buyer.

b) Party S is signing multiple documents that is (the MOU, No objection certificate and assignment deed).

c) Since you will be paying Party S through your bank 90% of the sale value, your transaction is legal in accordance to law.

6) Another alternative to the whole of the solution which is totally secure and eliminates any warranted future risks is

a) Party S can execute a special power of attorney document in your favour in Indian embassy.

b) MOU entered in to between Party S and YOU with both party 2 and you as signatories.

c) No Objection certificate from Builder and Party S for registration of property in your name.

d) Assignment deed between Builder and Party S in which party S will assign his rights in building and construction agreement to you.

e) Registered sale deed between Builder and You with Party S as a consenting party and the signatories in this sale deed are builder, you and Party S represented by power of attorney holder(you).

Hope this information is useful.

Rajgopalan Sripathi
Advocate, Hyderabad
2173 Answers
394 Consultations

5.0 on 5.0

1. The only flaw that I can spot in the manner conceived by you is that the S has to be in India to execute the sale deed in your favour. Alternatively, he has to execute a GPA in favour of someone to authorize him to execute the sale deed for and on his behalf. The title cannot pass to you unless the assignment deed/sale deed is registered by S or his agent.

2. In any event, direct registration by the builder in your favour should be adopted in preference to the recipe conceived by you as it would be less time consuming and will also shorten the chain of title.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

1) presence of party S is necessary to sign as confirming party

2)when you are spending your hard earned money for purchase of property never take a chance

3) insist that S remain personally present during registration process

4) tomnorrow S can take the plea that sale deed was executed by builder without his consent and seek rights on flat sold to you

Ajay Sethi
Advocate, Mumbai
95208 Answers
7610 Consultations

5.0 on 5.0

Since the owner is not available in India, he wont be signing as confirming party or consenting witness during sale deed registration. He doesn't even have a registered GPA who can sign on his behalf.

Is it recommended to register the property on my name from builder directly without his reference in sale deed? Does it add any complications when I resell the property in furture?

The builder if not authorised through GPA to sell the flats or properties under builder owner agreement, then the builder is not an authorised person to sell the property to you. The sale deed is not valid since the vendor has no marketable title to sell the property.

You can make a tripartite agreement with the owner, builder and yourself for buying this property on the terms mutually agreed.

Can Party S or his descendants in future can claim that it was done under duress/coercion since he is not appearing during registration process anyways.

The sale transaction can come under the criminal offences in the names of fraud, forgery by fabricated documents, cheating, impersonation and land grabbing etc.

It is better you take a legal opinion from a local lawyer by producing all the relevant documents/papers before him before jumping into any decision.

T Kalaiselvan
Advocate, Vellore
85409 Answers
2237 Consultations

5.0 on 5.0

The sale deed will be executed between Builder as seller and myself as purchaser, and register the same on my name. My concern is how important or necessary for Party S to be physically present and sign during the registration process as a Consenting witness/Confirming party. What is the risk if doesn't sign as a consenting witness during registration?

You have stated that Party S who resides in China had executed Construction and Build agreement with Builder B and also stated that the owner is not available in India, he wont be signing as confirming party or consenting witness during sale deed registration. He doesn't even have a registered GPA who can sign on his behalf.

Thus it is very clear from your statement that the owner of the party is not selling the property to you by executing a registered sale deed in your favor.

The builder who is a third party and has an agreement only to build the property /flat is ready to sell the property but the fact is he is not having marketable title to sell the property.

Do you think that this is legally valid transaction.

Do you think that the builder has got any right to sell the property.

Did you not notice that the builder is not having aevan a power of attorney deed in his favor to sell the property?Thus without any right to sell or any authorisation or authority to execute a registered sale deed, the builder cannot sell the property to you and any such transaction may not be legally valid, you will be in a trouble.

You may wait until the owner returns to India to execute a confirmation or sale deed in your favor instead of losing the entire investment

T Kalaiselvan
Advocate, Vellore
85409 Answers
2237 Consultations

5.0 on 5.0

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