• JDA, sharing agreement and GPA

Sir/Madam
I have finalized a villa project for purchase in Bangalore. I need clarification on following topic as I have got different opinion from two lawyers
1. In this case, father is the land owner and son is the developer. Mr. Son is managing director of a company e.g. XYZ Builders Pvt Ltd, Bangalore
2. Father (land owner) has signed MoU and sharing agreement with XYZ Builders Pvt Ltd, represented by director Mr Son. Both the MoU and Sharing agreement are notorized copy, (not registered copies). 
3 As per the sharing agreement my villa belongs to developer (XYZ Builders Pvt Ltd,)
4. In the MoU it is mentioned that, land owner will sign GPA to land developers. 
5. In the GPA, which is registered, GPA is executed by landowners (Father) to Mr Son's name directly instead to son's company i.e XYZ Builders Pvt Ltd .
My question is, does this property have clear title? Does the company has right to collect the cheque in the favour of XYZ Builders Pvt Ltd and sell the villa to me? Do you see any corrupt practice here?
Asked 4 years ago in Property Law
Religion: Hindu

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9 Answers

1) sharing agreement between land owner and developer should be registered to avoid legal complications

2) GPA should have beenexecuted by father in name of XYZ builders pvt ltd and not in na e of son

3) don’t purchase the property

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

1) Get your Developing agreement register with registrar and its understanding of the two parties to come together a form the new contract.

2) Actually property should be get registered in the company's name for further developing and if its purchase on the son's name he can mention in that he is the director of the company and on Company's behalf the property is registered on son's name.

3) What ever transcations you have made it's look like corrupt practice here.

Ganesh Kadam
Advocate, Pune
12338 Answers
191 Consultations

4.9 on 5.0

The land owner (father) must have executed a registered Joint Development agreement with developer (son) coupled with JDA, he must have executed a registered GPA in order to authorize his son (developer) to sell the developers share in the constructed portion. Lastly the land owner and developer must have executed amongst themselves a sharing supplementary agreement demarcating each others share in the developed or constructed portion.

In your case, the land owner has executed a notarized MOU and a sharing agreement, based on the notarized MOU and sharing agreement, the developer XYZ cannot collect payments from you, nor execute the sale deed, as the company does not have the power to do so.

This looks like a sham transaction. Get it ratified by an advocate before proceeding.

Kiran N. Murthy
Advocate, Bangalore
1298 Answers
194 Consultations

5.0 on 5.0

If land owner title is correct there is no problem, he will do GPA and also entered into sharing agreement. But sharing agreement will better to register and also verify the incorporation certificate. Even GPA entered into land owner with builder (no difference between relatives and other than relatives) he should one of the party in sale agreement as well as sale deed and also irrespective of their sharing property. All the best.

C. V. Jadhav
Advocate, Bangalore
545 Answers
18 Consultations

4.7 on 5.0

This is my response to you:

1. The GPA should have been mentioned in XYZ company's name;

2. If it is mentioned in name of son, is there any clause which says that Mr.Son on behalf of the company?

3. If not then the GPA is only given to Mr.Son and not the company;

4. Therefore the company cannot sell you anything only Mr.Son can;

5. Then again the MOU is between XYZ and the father, which itself is wrong;

6. The son and father and the XYZ company are trying to hide something from you;

7. After the sale either the son or the company may file a case against you to claim it;

8. Therefore ask the father, son and XYZ company to execute proper documents otherwise you can withdraw from the transaction.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

The GPA should be executed in name of company xyz instead of the son it may be case that it can be executed in name of Mr. Son but in capacity of director of xyz not in individual capacity.

Therefore the company cannot sell.

Further more the agreements need to be registered to avoid future problems.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Dear Client,

It should be mention on the GPA that Mr. Son is authorized to act on behalf of XYZ company and same is agreed to father. attach authority letter.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Dear Sir,

My answers are as follows:

1. In this case, father is the land owner and son is the developer. Mr. Son is managing director of a company e.g. XYZ Builders Pvt Ltd, Bangalore.

Ans: Well, no problem.

2. Father (land owner) has signed MoU and sharing agreement with XYZ Builders Pvt Ltd, represented by director Mr Son. Both the MoU and Sharing agreement are notorized copy, (not registered copies).

Ans: It must be registered to avoid future complications, normally there cannot be such issues since parties are related to each other.

3 As per the sharing agreement my villa belongs to developer (XYZ Builders Pvt Ltd,)

Ans: Ok. No problem.

3. In the MoU it is mentioned that, land owner will sign GPA to land developers.

Ans: Ok., no problem, but it is better take signature of the original party.

4. In the GPA, which is registered, GPA is executed by landowners (Father) to Mr Son's name directly instead to son's company i.e XYZ Builders Pvt Ltd .

Ans: To avoid such complications better take signatures of both son and father.

My question is, does this property have clear title?

Ans: Other documents to be perused to give opinion on title. Mother deed has to be perused.

Does the company has right to collect the cheque in the favour of XYZ Builders Pvt Ltd and sell the villa to me?

Ans: Yes with some complications, but if both of them (son and father) sign agreement of sale then there would be no problem.

Do you see any corrupt practice here?

Ans: In civil cases we cannot anticipate corrupt practice but we must take all precautions as told above. It is better to get verified all other documents with me. The law on GPA is as follows:

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No property sale on power of attorney: Supreme Court

Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer.

In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovableproperty sales is not a valid form of transfer of property.

A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds.

"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA.

The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

The property is sold by GPA on behalf of the land owner.

No doubt the son is the builder and owns the company.

But he cannot receive sale consideration amount on his name, the builder company may accept payment on behalf of the seller.

As far as the title is concerned you may obtain legal opinion from a local lawyer.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

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