Development agreement with a person who is now deceased
I intend to purchase an apartment from a builder. The builder has obtained the land from two brothers A & B to construct a multi storied building there. Following are the salient features of the deal.
1) The land is owned by the father of the said A & B (deceased long back). A & B received the land through inheritance (their mother also deceased)
2) The builder entered into a development agreement with A & B (notarized though I am not sure if it is registered) - with some initial amounts being paid to A & B
3) This was followed by a registered GPA with A & B for the purpose of construction, development and sale of apartments
4) Now the construction is 6-8 months away from completion. But A passed away a few months back
5) The builder has a new GPA with the heirs of A and also included B in this new GPA (registered). However, he has not renewed the development agreement with the heirs of A. He continues to utilize the same development agreement which was signed by A & B
Does this represent any legal threat to me as a potential buyer of an apartment in the property (assume all other documents are proper and are in place)? Should I need to insist that the builder enters into a new development agreement with the heirs of A as A is now deceased?
Asked in Property Law from Kolkata, West Bengal
1) since builder has new GPA signed with heirs of A he can proceed with development of plot .
2) it is necessary to peruse development agreement signed by builder with A and GPA with legal heirs to advise .
3)since development agreement is coupled with consideration and amounts have been paid to A the development agreement would be binding on his legal heirs too
1. This does represent a very potent threat to your rights.
2. The heirs of A can move to court and obtain a stay against the construction. Furthermore, if you go ahead and purchase the apartment and take the possession you can be evicted if his heirs impeach the right of the builder to start construction without renewing the development agreement with them.
3. To be on a safer side insist that the builder should renew the development agreement.
1) As a potential buyer of the property there is no threat perceived if you proceed to purchase the property as GPA has been duly renewed incorporating the new legal heirs of A.
2) However you can still ask the builder to enter into a new developmental agreement with the owners as the developmental agreement ought to be registered.
1. What has been mentioned in the Development Agreement in case of the demise of any of the land owners?
2. Has it been mentioned that the demised land owner's legal heirs will inherit his share of the construction?
3. If yes, get the Development Agreement renewed by the legal heirs of A to be safe,
4. Get the renewal agreement registered.
1. The DA clearly mentions that in case of death of either of the landowners, the terms of the DA will be binding on their legal heirs. The agreement is also witnessed by a couple of the heirs (one each of A & B)
2. Legally, what is the difference between a DA which is witnessed and notarised versus a DA which is also registered along with notarised? what are the cons of an unregistered (but notarised) DA?
Asked 2 years ago
1) DA would be binding on legal heirs .
2) it is not necessary to register development agreement . it is sufficient if it is notarised
3) There are several documents which are not compulsorily register able under Section 17 of the Registration Act.
The following are the list of documents that do not require registration:
Power of attorney that is given except power to sell property
Agreement of sale given by a land owner to a developer
Lease deed for less than one year
Memorandum of oral partition
recording a past transaction.
1. Get the DA renewed by the legal heirs and get it registered,
2. Notarised Agreement means the agreement which has been affiormed before a notary Public and Registered Agreement that both the parties appear before the Registrar and apend their signatures before the egistrar which is recorded with the registration office,
3. In case of loss of the registered original Agreement, its certified copy can be applied for whereas in case of loss of notarised Agreement no copy can be recovered.
1. Since the agreement mentions that its terms will be binding on the heirs it is safe to rely thereon.
2. An unregistered DA agreement can, in a manner akin to a registered DA, be the charter of rights and duties if it has been witnessed.