• Builder NOC, sublease deed

Dear Experts,
Need support for the following --

Background.
Planning to buy a apartment in Indirapuram, Ghaziabad (NCR) in resale from Mr x in a xyz Builder Project.

Key points --
Ghaziabad Development Authority has give land on 90 years lease to Builder xyz
Offer of possession of apartment was given to Mr x. (apartment is ready to move)
The ownership of property in name of Mr x is by a Sub lease deed between the builder (Lease PARTY ONE) and Mr x (Sub lease PARTY TWO). This Sub lease deed to registered in Ghaziabad Sub Registrar Office.

Queries --
Can Party TWO further sub lease to me i.e transfer all property rights 
Will I be further able to sublease to PARTY FOUR in future
Is builder NOC required by PARTY TWO to  transfer all property rights to me.

Regards
Asked 1 year ago in Property Law from Ghaziabad, Uttar Pradesh
Religion: Hindu
1) if no cooperative society is formed you would need builder NOC 

2) party two can transfer apartment to you ,just check whether all property taxes etc and other dues have been paid by seller 
Ajay Sethi
Advocate, Mumbai
23125 Answers
1215 Consultations
5.0 on 5.0
1) you have to check whether title is clear and marketable 

2) check whether building completion certificate , occupation certificate is issued by GDA

3) also ask for inspection of original documents . 

4) there must be clause  in lease deed that for creating third party rights prior permission of lessor is necessary . 

5) you can create sub lease after prior approval of lessor 
Ajay Sethi
Advocate, Mumbai
23125 Answers
1215 Consultations
5.0 on 5.0
1. You will find answers to your said questions in the Sub-Lease executed by and between the Lease PARTY ONE and Sub-Lease PARTY TWO,

2. If there is o bar in sub-leasing the property by the PARTY ONE, then you can go for it,

3. You should also scrutinise the Lease Agreement executed between the Gaziabad Development Authority and te Lease PARTY ONE to find out if there is any restriction on leasing the flats constructed upon the leased land.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
There are two ways you can buy the lease of a council flat:

by buying the lease from the present leaseholder (if the flat has already been bought under the Right to Buy and is being sold again)
you are currently a council tenant and living in a flat/maisonette subject to certain criteria.
In both cases you should get a solicitor to act for you in buying the lease. If you are buying from the present leaseholder it is important that you know what service charges are outstanding on the property so that you can make sure that they are cleared before you complete the purchase. You may have to pay some charges owed by the previous leaseholder (unless you are the first leaseholder) if they are not cleared before the purchase.

You can sell the property at any time. This is known as assigning the lease. If you bought your home under the Right to Buy, you may need to repay all or part of the discount you received should you sell in the early years after your original purchase.

You can go through the documents or get them vetted by your advocate before venturing into the purchase of the property proposed to buy. also take a confirmation from the builder who is the original lessee. 
T Kalaiselvan
Advocate, Vellore
13943 Answers
127 Consultations
5.0 on 5.0
Will I be further able to sublease to PARTY FOUR in future:
You can sell the property at any time. This is known as assigning the lease. If you bought your home under the Right to Buy, you may need to repay all or part of the discount you received should you sell in the early years after your original purchase.You must ensure that you make any prospective purchaser aware of the leasehold nature of the property and of any rules or conditions which apply.




Since the Sub lease deed is registered with the Registrar, do I need to check other documents such as Encumbrance Certificate, Completion Certificate issued by Ghaziabad Authority to Builder

You can obtain encumbrance certificate and confirm the  clear and marketable title.  You can insist on completion certificate or occupation certificate is issued by GDA.  Check if there is a clause for creating third party's right in the agreement and whether the permission of the original lessee/lessor is necessary. You can also ask for inspection of original documents, get them vetted by your lawyer, take his opinion and can create sub-lease after getting NOC from the original lessee.


T Kalaiselvan
Advocate, Vellore
13943 Answers
127 Consultations
5.0 on 5.0
1. Since X is a sub-lessee he cannot further sub-lease the property except with the permission of the lessee i.e the builder. No right of lease or ownership will accrue to you if the sub-lessee executes the sub-lease in your favour without the consent of the lessee.

2. Whether or not you will be at liberty to further lease the property will depend on the sub-lease executed in your favour. With the consent of the lessee i.e the builder the sub-lessee can confer on you the right to further lease out the property.
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
5.0 on 5.0
1) it is necessary to peruse the sub lease deed between builder and seller 

2)as per clause cited by you sub lessee can transfer the flat 

3) you would need permission from builder if no society has been formed for transfer of flat and for taking bank loan 

4) as far as GDA is concerned it is necessary to peruse lease deed to advice 
Ajay Sethi
Advocate, Mumbai
23125 Answers
1215 Consultations
5.0 on 5.0
The Sub lease deed between Builder and the Seller has the following clause --
" Subject to all applicable laws, rules and guidelines of the Authority/State Government the sub lessee shall be entitled to transfer the title of the said Flat/Dwelling Unit"
I think with the above clause, the seller can transfer the property rights. However I have the following doubts
Will the permission to transfer  be required from Ghaziabad Development Authority (as its the very first party who has leased the land to Builder)

The clause is very clear that the lessee has been empowered or made entitled to transfer the title which in my opinion may not need an approval from GDA while the said alienation is being effected. However, the execution of the  said deed may be by a registered document paying the proper stamp duty for the purpose. 



Will the permission to mortgage (I have to take Bank Loan) be be required from Ghaziabad Development Authority (as its the very first party who has leased the land to Builder)

If the permission form GDA was not obtained while buying the property from the subsequent lessee then in my opinion the permission from GDA may not be necessary for mortgage loan too, however if the bank insists on it, then a formal application may be applied for. 



Will the permission to transfer  be required from Builder (the sub lease deed is already registered with GDA)

I dont think the builder may need to accord permission for this transaction since the permission from the original lessor itself was not obtained. The clause referred above would suffice the requirement



Will the permission to mortgage(I have to take Bank Loan)  be required from Builder (the sub lease deed is already registered with GDA)

Question repeated in a different manner, see the above answer 



Also is it necessary to get the Agreement to Sell registered. If Agreement to sell is simply on stamp paper and is not registered will it still hold as proper legal changeable document (In case GOD for bid some thing goes wrong in the deal)

All such documents can be duly registered by paying the proper stamp duties to avoid any type of legal problems that may arise alter. 
. 
T Kalaiselvan
Advocate, Vellore
13943 Answers
127 Consultations
5.0 on 5.0
1. In the light of the clause in the sub-lease deed the sub lease is possible. The permission from GDA is required before the transfer of title. 

2. The agreement to sell does not require a mandatory registration.
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
5.0 on 5.0
1) it is  advisable to  register agreement for sale 

2) you can move court against the seller if he commits breach of contract 

3) stamp duty and registration charges local lawyer can guide you
Ajay Sethi
Advocate, Mumbai
23125 Answers
1215 Consultations
5.0 on 5.0
OFFICE OF THE INSPECTOR
GENERAL OF REGISTRATION: DELHI
GOVERNMENT OF NCT OF DELHI
Tis Hazari Courts, Delhi 110 054
    	 
ARE YOU AWARE THAT ‘AGREEMENT TO SELL’ IS NOW REQUIRED TO BE REGISTERED.

 
     It is brought to be notice of the general public that the Government of India vide Gazette notification No. 56 dated 24th September, 2001 published in the Gazette of India, Extraordinary, Part II, section-1, has effected-following amendments:

 
Amendment of section 53(A) of Transfer of Property Act, deleting words to ‘the contract though required to be registered has not been registered’.
Introduction of section 17(1) (A) in the Indian Registration Act making contracts to transfer for consideration of any immovable property in the nature of section 53(A) of the Transfer of Property Act including agreement to sell compulsorily registerable.

Addition of new article namely article 23(A) of Indian Stamp Act, 1899, ‘conveyance in the nature of part performance chargeable to 90% of the duty payable as a conveyance’.

With the introduction of these amendments, the documents containing contracts to transfer for consideration, any immovable property including agreement to sell for the purpose of Section 53A of the Transfer of Property Act, 1882, are required to be registered if they have been executed on or after 24th September, 2001.

The stamp duty to the extent of 90% of the duty as a conveyance payable on the consideration set forth in the document shall be payable on such instrument and the rest of the 10% of the duty shall be payable at the time of completion of document. It would be in the interest of executants to secure their rights of the property, by registering such documents. Non-registration of such instruments may render these documents inadmissible in evidence in any office or court for filling any suit or claim. We request the executants of such instruments to refer to the notifications No. 56 dated 24th September for further clarification.
Ajay Sethi
Advocate, Mumbai
23125 Answers
1215 Consultations
5.0 on 5.0
1. The agreement to sale is not required to be registered. Neither unregistered nor registered agreement to sell is beyond the pale of legal challenge.

2. The agreement to sell can be drawn up on a stamp paper of Rs.100. 

3. The stamp duty will have to be paid on the circle rate of the property at the time of the execution of sale deed. 
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
5.0 on 5.0
1.I am uncomfortable with the statement "...........sub lessee shall be entitled to transfer the title of the said Flat/Dwelling Unit" since lease deed does not convey the Title of the property but gives the lease right for a particular lease period,

2. However, for the lease deed it is clear that the leasee  can convey the Title or Right whatever he has got to you by way of sub-lease,

3. For the said sub-lease or mortgage, no permission of the Builder will be required since the same has not been stipulated in the lease deed.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
1. In the interest of the buyer, it is required to be registered,

2. If it is not registered, the agreement can be challenged on many counts and it will be difficult to get favourable judgement from the Court if it is not registered,

3. Registration rule varies from State to State. Get it verified from your local Registration Office,

4. The amount already paid will be registered while registering the sale deed.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
 consent of all apartment owners is mandatory in case builder does not want to form apartment association under provisions of Apartment act 
Ajay Sethi
Advocate, Mumbai
23125 Answers
1215 Consultations
5.0 on 5.0
It stipulates that the plan for the apartment ownership can be amended unless all the mortgagees agree for the same.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
This clause only restrains the builder from revoking the property from the plan of apartment ownership. It is not the authority on his rights to make a sub-lease.
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
5.0 on 5.0
Is it mandatory that Agreement to Sell should be registered for it to be challenge able in court of law. The objective to 100 % safe guard the interest of buyer in the eyes of laws in case seller back out of the deal after taking 10% of the consideration amount. 

Yes, any agreement concerning transfer of property need to be registered to avoid legal hassles in future. 




If Agreement to Sell is not registered , but is only on non judicial stamp paper , is it not challenge able in court of law and does not registering it amounts to diluting the interest of buyer in any way.

Unregistered sale agreement is in valid in the eyes of law. 





If we opt for Registration of Agreement to Sale, what will the amount of stamp papers and registration fees. Consider the consideration amount of sale is Rs 100 and advance payment (mentioned in agreement to sale) is 10 % of 100 = Rs 10.

The stamp duty charges varies from one state to another, you may verify from the local registrar's office. 




Query 4
Now the final sale will be executed, will I again need to pay the stamp duty and registration charges or the amount will be adjusted against the amount paid in Query 3 above.
Total registration amount = 7% of consideration amount = 7% of 100 = Rs 70
Rs 10 already paid in Query 3
So will I need to Rs 60 when final sale deed is done ?

In the registration of sale deed, the stamp duty already suffered will be deducted, however the registration charges need to be paid once again.

T Kalaiselvan
Advocate, Vellore
13943 Answers
127 Consultations
5.0 on 5.0
" That neither the dedication of the property to the plan of apartment ownership herein shall not be revoked, nor the property removed from the plan of apartment ownership, or any of the provisions herein amended unless all the apartment owners and the mortgagees of all the mortgages covering the units unanimously agree to such revocation, or amendment or removal of the property from the plan by only registered instruments 

This is a god clause favoring the people buying the apartments. Therefore until everyone agree to revocation, the agreement (lease deed agreement) cannot be revoked. 
T Kalaiselvan
Advocate, Vellore
13943 Answers
127 Consultations
5.0 on 5.0

Ask a Lawyer

Get legal answers from top-rated lawyers in 1 hour. It's quick, easy, and anonymous!
Ask a Lawyer

Property Lawyers

T Kalaiselvan
Advocate, Vellore
13943 Answers
127 Consultations
5.0 on 5.0
Ajay Sethi
Advocate, Mumbai
23125 Answers
1215 Consultations
5.0 on 5.0
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
5.0 on 5.0
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
Devajyoti Barman
Advocate, Kolkata
5164 Answers
54 Consultations
4.9 on 5.0
Rajgopalan Sripathi
Advocate, Hyderabad
868 Answers
43 Consultations
5.0 on 5.0
Atulay Nehra
Advocate, Noida
431 Answers
15 Consultations
4.7 on 5.0
Shivendra Pratap Singh
Advocate, Lucknow
2728 Answers
41 Consultations
4.9 on 5.0
Ajay N S
Advocate, Ernakulam
1905 Answers
19 Consultations
5.0 on 5.0
Thresiamma G. Mathew
Advocate, Mumbai
1316 Answers
85 Consultations
5.0 on 5.0