• Selling land owner allocation

The property has been developed under a joint development agreement defining percentages to land owner and developer.there is a separate agreement on the developer company letter head defining which flat belongs to owner and which belongs to developer signed by both developer and land owner.

the construction is 60% complete.

now my question is can the land owner sell any flat from his allocation before getting possession ?if yes, then how ? what is the legal procedure for this? does he need to pay gst if he sells underconstruction flat from his allocation?

and lastly can he sell the respective flat from his allocation through developer ? if yes, then again how and how does he legally gives permission to the developer to sell his flat?
Asked 4 years ago in Property Law
Religion: Hindu

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12 Answers

Dear Client,

Agreement executed between builder and land owner is not valid as not registered, if any dispute arise, no admissible in evidence.

now my question is can the land owner sell any flat from his allocation before getting possession ? -- Yes

if yes, then how ? -- registered sale deed, don`t forget to mention the understanding between builder and LO and proportion off ownership.

what is the legal procedure for this?

does he need to pay gst if he sells under construction flat from his allocation? - yes

LO can authority builder to sell on his behalf through POA.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Sharing agreement between landowner and builder needs to be stamped and registered

2) landowner has to execute POA in favour of developer to enable him to sell flat

3) under construction flat can be sold by landowner

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

Yes Land owner can sell the under construction flat by a registered sale deed can be made with possession in future further GST has to be paid which can be recovered from the buyer. or a registered agreement to sale can be made and sale deed can be prepared once the construction is complete.

To sell through developer he need to give a power of attorney to developer.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

If POA is given to builder then payment has to be made to builder

2) stamp duty varies from state to state

3) consult a local lawyer

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

It would be around 7000 thousand if property value 40 lacs in West Bengal.

The payment cam be made to power of attorney holder.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Why your will pay, Builder owner will pay, you will pay for sale deed, POA notorised is sufficient to sell house on LO behalf.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. land owner can sell the flat from his share before he receives the possession

2. a tri party agreement will be required between owner, builder and purchaser. The purchaser will make payment to the owner and the builder will agree to give possession of the flat to the purchaser instead of the owner

3. when builder allots flats to owner against grant of development rights by the owner, the owner is taking construction service from the builder. But since the owner is being paid in kind (i.e. in the form of flats) and not by way of money, for grant of development rights to builder, the builder will be liable to pay GST. Since here a purchaser is buying a flat from the land owner and the builder will be allotting the flat to the purchaser, the purchaser will be required to pay GST to owner. The owner will then have to deposit the GST with government treasury

4. The owner can give POA to builder to sell the flat from the owner's share OR the owner and builder can enter into a tri party agreement with purchaser

5. you are right. POA granted to a non relative with a power to sell will attract stamp duty which is applicable to conveyance. The stamp duty paid on the POA can then be adjusted against the stamp duty payable on the sale agreement for purchase of flat from owner's share

6. you will have to make payment to the land owner since you are purchasing a flat from his share

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

1. There is no legal bar to sell a property owned by a person even before he gets its physical possession.

2. The landowner doe snot need to pay any GST for his allocation since he is not purchasing any property but getting his share in the property out of joint development agreement.

3. In the deed of conveyance the landowner needs to make developer as Confirming party while selling his share of property.

4. The Developer on the basis of POA can not sell share allocated to the landowner.

If the titile deeds and relevant papers are shown then further advice can be given.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

1. It is not a prudent step to buy under construction flat possession of which has not been taken or CC for which has not been obtained by the developer.

2. Agreements are required to be executed on stamp paper and not on letter heads to be valid as per law.

3. Since he has not collected completion certificate before July 2017, he shall have to pay GST for the payment to be received from you.

4. The developer can sell from his allocation if the same has been mentioned in the development agreement and there has been a POA executed and registered by the land owner in favour of the developer to sell the said flats.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1. As per the Judgement passed by the Supreme Court in Surya Electrics .....Vs.............The State of Haryana, sale to the third part, not related by blood, through POA (for avoiding payment of stamp duty) has been stopped.

2. First see the POA and the Development Agreement to ascertain whom the payment shall have to be made and then make the payment accordingly.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

now my question is can the land owner sell any flat from his allocation before getting possession ?if yes, then how ? what is the legal procedure for this? does he need to pay gst if he sells underconstruction flat from his allocation?

The landowner can sell his own share of property like how the builder is selling his under construction property.

Whatever GST applicable has to be paid for the under construction property.

Have you seen the JDA conditions on this, if not, you may go through the conditions of the JDA between the landowner and the builder.

All your doubts will be cleared.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

how much would such a PoA cost?...the cost of the property is like 40 lacs..i heard a PoA not given to a blood relative attracts much stamp duty etc.

What is POA doiing here?

The POA has to be registered, the registration charges only have to be paid besides minimum charges for stamp duty.

also if a PoA is given by land owner to developer to sell...to whom do I need to make payments ..to the developer or the land owner?

Since you will be entering into a sale agreement with the developer, you may have to pay the consideration amount to the builder only.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

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