• Buying a house from land owner's share

Dear All,

 I am exploring some property in a Gated community in Hyderabad. It has 43% share for land-owners and 57% for Builder. There are 4 land owners They are all brothers, say A, B, C, and D. The joint development agreement is registered in 2005 and it was signed by Builder and all owners. 

Later the build made three separate supplementary agreements for plot allocation. The first supplementary document is made between A and the builder, which outlines the plots allotted to A. The second supplementary document is made between B, C, D and the builder, which outlines the plots allotted to each one of them. The third supplementary document is made between C, D and the builder, which outlines some more plots allotted to each one of them. The plot that I am planning to buy is mentioned in third supplementary agreement and it came under C's share. All the supplementary agreements date back to 2007. However none of the supplementary agreements are registered. Only Joint Development agreement is registered.

 The plot that I am planning to buy came under C's share. He and Builder jointly applied for construction from Hyderabad Municial Corporation (GHMC) and got permissions to construct a Villa. Later C registered it as a gift deed for D. So, now the villa is on D's name.

 The supplementary document which mentioned my plot was not registered. I read somewhere in Internet that it was not safe to buy such plots where supplementary agreement was not registered. Is it safe to buy such property?

Please advise.
Asked 6 years ago in Property Law
Religion: Hindu

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27 Answers

1) insist on registration of supplementary agreement between A and C

2)dont purchase the property

3) un registered supplementary agreement is inadmissible in evidence

Ajay Sethi
Advocate, Mumbai
94725 Answers
7535 Consultations

5.0 on 5.0

Initially not at all, but yes you need to do a bit of research then you can go ahead and buy it.

Like you should go to the registrar office and inspect about the property about its title, if any dispute on it, present title over it.

Sanjay Baniwal
Advocate, South Delhi
5474 Answers
13 Consultations

5.0 on 5.0

In your case the nature and the terms in the development agreement and the power of attorney has to be looked into, however it is advised to chech the Encumbrance certificate of the plot from 2005 and get the builder to register a confirmation deed confirming that the project is developed by him and the plot is allotted to the share of C and in turn the C has executed a gift deed in favour of D.

Rajashekar
Advocate, Bangalore
591 Answers
4 Consultations

4.8 on 5.0

Basically, the supplementary agreement vide which the plots were allocated was not registered so as to save on stamp duty.

The non-registration of this agreement will not have any immediate consequences on your purchase. However, the problem lies in the fact that this document is not an admissible evidence in the Court.

Thus, god forbid at anytime there arises any dispute with respect to your purchase, you will not be able to rely on this supplementary agreement for it is having zero evidentiary value in the eyes of the Court.

Vibhanshu Srivastava
Advocate, Lucknow
9600 Answers
303 Consultations

5.0 on 5.0

Can you just have an email consultation with me through Kaanoon. So that would be able to have a look at your documents, and advice you correctly precisely.

Sanjay Baniwal
Advocate, South Delhi
5474 Answers
13 Consultations

5.0 on 5.0

1) the problem is suplementary agreement by which you derive title for plot is not regsitered

2) it would create problems if there is dispute between land owners

Ajay Sethi
Advocate, Mumbai
94725 Answers
7535 Consultations

5.0 on 5.0

Hello,

It is not possible for you to know the dispute if any with regards to the property.

However, if he title of the land is clear and D has a marketable title then you may purchase the land from D.

Also make sure that there is a clause in the Sale Deed which says that the property is free from any litigation and is not sub judice and later if it is found that the property is sub judice then D will refund the sale amount along with interest.

Regards

Anilesh Tewari
Advocate, New Delhi
18078 Answers
377 Consultations

5.0 on 5.0

Make sure that you do not purchase the said property without this clause.

Because encumbrance certificate just clarifies the title of the land and rest it is your duty to check the status of the land.

Regards

Anilesh Tewari
Advocate, New Delhi
18078 Answers
377 Consultations

5.0 on 5.0

Yes obviously that will help, chip them in as a witness to the sale deed.

And also make a clause that the witness does not have any objection in the said deal.

Regards

Anilesh Tewari
Advocate, New Delhi
18078 Answers
377 Consultations

5.0 on 5.0

ask other 2 landowners to be witnesses for sale deed executed in your favour

2) it would help in the sense that tomorrow they cannot claim that they were not aware of sale deed executed in your favour

Ajay Sethi
Advocate, Mumbai
94725 Answers
7535 Consultations

5.0 on 5.0

There's no serious trouble involved in making this purchase.

Since you have already verified the title, you may go ahead and close the deal.

Vibhanshu Srivastava
Advocate, Lucknow
9600 Answers
303 Consultations

5.0 on 5.0

Witness is someone who can say yes the transaction was in my knowledge. He can’t say you is the real owner.

His role is very limited.

You please show all the documents that you have.

Sanjay Baniwal
Advocate, South Delhi
5474 Answers
13 Consultations

5.0 on 5.0

Sir in this matter ass mentioned earlier the land is already a part of a project which has been entered by a registered JDA. In such a case all the owner along with the developer needs to sign the document to be registered to change the title in your favor.

If there is any other clauses then the JDA has to be looked in first.

Arun V S
Advocate, Jaipur
64 Answers

4.0 on 5.0

If ABCD are the owners of the said property and partitioned as per JDA and not registered. However, if the real owner is reflecting in records, you can buy and get the legal heirs of the owner and obtain a NOC from others. Go further to check the revenue records.

Rajaganapathy Ganesan
Advocate, Chennai
2132 Answers
8 Consultations

4.9 on 5.0

The allocation of the plots is between the owner and the builder therefore if any change to allocation has to be made it is the Builder and the allocation deed is not registered therefore it is necessary for the builder to execute and register a confirmation deed in favour of D admitting and acknowledging the title of the plot on D.

If all other land owners a ready to join the deed as consenting witness which is also good go ahead.

Rajashekar
Advocate, Bangalore
591 Answers
4 Consultations

4.8 on 5.0

The supplementary agreement is among the builder, and the land owners.

This need not be registered once the principal joint development agreement between the land owners and builder is registered.

The landowner remains the owner of the property he is allotted and would be willing to sell to a third party.

The landowner or the seller should execute a registered sale deed in favor of the purchaser.

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

I went to registrar office and applied for an Encumbrance certificate. The title looks clear.It is on D's name from whom I planning to buy the property. It shows the JDA between builder and owners. And then gift deed from C to D. How can I know if there is any dispute(if any)?

You can come to know about the disputes if any through your lawyer.

It is always advisable to obtain a legal opinion from a qualified lawyer before buying an immovable property.

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

he owner says he can bring any other land-owner that I choose as witness just in case if I am afraid that the other land owners claim ownership. Does having them as witness help?

You can get the land owner other than the seller as witness to get the registered sale deed executed in your favor.

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

Hi

1) Though Joint development agreements are NOT conveyancing deeds as per transfer of property act, it is mandatory that the Joint development agreement needs to be compulsorily registered. Please note Joint development agreement does not confer ownership, title to the builder and hence cannot be considered parent title deed.

2) In your supplementary deeds, actually properties are allocated to different parties which means the real conveyancing of properties( transfer/ assignment of ownership, title and interests) has effectively been imbibed in supplementary deeds and hence it is mandatory that the supplementary deeds have to be registered.

3) Given that the Supplementary deeds are not registered in the year 2007, the options available to you are

a) Ask D to register the sale deed in your favour, by making A, B and C as the consenting parties in the said sale deed.

b) Also ensure to take the original document (gift deed by C to D) soon after the registration.

Hope this information is useful.

Rajgopalan Sripathi
Advocate, Hyderabad
2173 Answers
394 Consultations

5.0 on 5.0

If there is no problem with the previous purchasers on this then you may take a legal opinion, by producing the legal documents in respect of the property, and if recommended you may go ahead.

You can express your apprehensions about the property to the lawyer seeking opinion and can decide after that.

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

See, yes you can go and buy it, but still I advice you show the documents to an expert like us so that we can also go through the same before saying eventually as according to me villa number just have been there.

So, a little more effort from your side needed.

Sanjay Baniwal
Advocate, South Delhi
5474 Answers
13 Consultations

5.0 on 5.0

if supplementary agreement is registered wherein plot / villa allocation is made of landowner / builder share you can go ahead and purchase the villa

Ajay Sethi
Advocate, Mumbai
94725 Answers
7535 Consultations

5.0 on 5.0

Yes you can go ahead with this

Anilesh Tewari
Advocate, New Delhi
18078 Answers
377 Consultations

5.0 on 5.0

On the basis of the following statement I am saying to purchase the same:

"Moreover property tax is also generated from Hyderabad Municipal Corporation (GHMC) and I could verify this online. "

Additionally also I do not see any legal impediment

Anilesh Tewari
Advocate, New Delhi
18078 Answers
377 Consultations

5.0 on 5.0

Don’t purchase villa

Never take a risk where your hard earned money is concerned

Ajay Sethi
Advocate, Mumbai
94725 Answers
7535 Consultations

5.0 on 5.0

A Joint Development Agreement is an arrangement between an owner of the land and a builder where the land owner contributes the land and the developer undertakes the responsibility of obtaining approvals, property development, launching and marketing the project with the help of his financial resources.

A certain percentage of constructed area is set aside for the owner. Usually he gets a 30-40% share in the total outcome.

The developer himself does not buy the land/property from the owner.The developer is not the transferee or buyer of the flats as per the Transfer of Property Act, 1882 under the Joint Development Agreement.

he license/authority to enter the land is typically given by way of a power of attorney issued in favor of the developer.

Once the plan is approved, the owner should get an allocation agreement done recording the constructed area which comprises his share and the area going to the developer.

Thus in your situation out of the share of C he has gifted the property you propose to buy to D.

Therefore you may not worry about the registration of supplementary agreement which is a mere specification of the flats allotted.

You were advised to seek legal opinion from a local lawyer for clarifying your further doubts.

T Kalaiselvan
Advocate, Vellore
84925 Answers
2196 Consultations

5.0 on 5.0

Dear Sir,

For the present there will be no problem. If you enter into possession you will safe. However you have to face 10% litigation at any future day.

Kishan Dutt Kalaskar
Advocate, Bangalore
6136 Answers
487 Consultations

4.8 on 5.0

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