Sir, I am buying a flat from the land owner. The joint development agreement between the builder and land owners is registered but the sharing agreement between the parties is not registered. It is just done on a Rs. 200 stamp paper before notary. Because of this, my lawyere insists that the directors of builder company or a registered GPA be brought in as consulting witness for both agreement and sale deed. The land owner says the directors have authorized an official from their side to be part of all sale deeds as one of the parties, in a board resolution and the directors need not sign any agreement as this is a private limited company. My lawyer suggests me to drop the deal in that case. What do I do now? Your advice will be of great help. Thanks in advance. Regards, Bharathiraja R
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The information is sketchy and lacks details in vital aspects.
It would be great if I could see the papers before making my views clear to you. Since it is relating to your final decision on purchasing the property, it is essential to read the wordings.
A first time home buyer should scrutinize all the property and construction related documents before buying a house from any builder to avoid property related issues in future. As the real estate crimes increase every day, it is important for home buyers to check even if the project is launched by leading real estate construction firm. Most people check the Khata, sale deed, sanction agreement etc but do not concentrate on Joint development agreement which plays a crucial role if the project is a joint venture. A joint development agreement is an agreement between a land owner or owners and the builder/promoter regarding any real estate joint venture project.
The checklist
The joint development agreement should include the names of all the owners of the particular land and the builder’s or the company’s name.
the agreement should also contain the expenses shared, effect of termination, alternative exit strategies and other legal provisions. This will help the purchasers have security even if there are issues in the construction or if either of the party wants to exit the agreement.
According to the legal process, the owner/owners of the land should grant a general power of attorney to the builder by signing the rights to his name.
The builder does not buy the property from the owner but only develop the property and share the profit. The builder only nominates the buyer and hence a separate agreement will be made between the buyer and the builder. According to this agreement, the builder fixes the cost of the property and amenities offered. The buyer is not involved in the possession of the property before the registration process.
So if you are a home buyer planning to buy an apartment or a residential property from a joint venture, it is necessary to check the Joint development agreement properly along with other document. Only after confirming the documents, book your dream home and have a trouble free home buying experience.
1) you should go by your lawyer advice
2) sharing agreement between landowners and builder should have been regd to avoid legal complications in future
3) there is no harm in the company executing regd power of attorney authorising its officer the holder to execute sale deed on behalf of the builder
4) it can be in addition to board resolution
5) don't purchase flat contrary to legal advice
The sharing agreement does not require a mandatory registration under the law. If the directors have appointed an authorized representative to sign the agreement and sale deed on their behalf then they do not need to sign the same in their personal capacity. The acts of the authorized representative are deemed to be the acts of the directors who are bound by what the former does in pursuance of the board resolution.
Typically all joint development agreement are entered into in this manner. The Joint development agreement for development must be registered as also the GPA which authorizes the builder to obtain the necessary approvals, and sanctions, including power to sell his share in the constructed area in favour of intending purchasers.
But the flat you intend to purchase has fallen to the share of the land owner, in this case in addition to the land owner signing the deed of sale, the developer holding the GPA on behalf of the land owner can represent him and also the developer and affect the sale in your favour.
Most companies authorize a representative as their authorized signatory, if this is duly approved in their board resolution it is adequate.
In the above circumstances my recommendation to you would be to proceed with the purchase if all other documents are in order for the said project.
