Question :-- I am buying a flat in Mumbai from SELLER where property is fully constructed ; OC has been received by builder and Agreement is already registered between SELLER and Builder. Flat is ready to move-in. SELLER had entered into Agreement with BUILDER in December 2011 and agreement is also registered in December 2011. I will be BUYER of the said flat from SELLER who is 1st Owner of this flat. Seller is not willing to take Possession from Builder. He is asking me to take Possession directly from Builder after completion of registration of agreement with him. Seller is apparently proposing this because he wants to be eligible for Long-Term Capital Gains Tax. As per his CA, if he takes possession then date of his purchase will be date of possession and accordingly Short Term Capital Gains will be applicable for him in that case. Seller is willing to get NOC from Builder in my favour. What risks are associated for me if Seller does not first take possession from Builder and I take Possession directly from Builder ? Can Builder reject or create obstacles ? Can Builder issue Possession Letter in my name although I do not have any agreement with him ? Please advise if there is any safe solution for this?
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1) builder will not issue NOC until transfer charges are paid to him . Further you need no due certificate from builder
2) insist on N OC from builder before you purchase flat
3) builder will issue possession letter in your name only if registered sale deed is entered in your name
4) if possible request for tripartite agreement between seller , builder and you
1. There are two ways to buy such flats. One is by getting a tripartite agreement signed by the builder, the seller and you wherein you pay the consideration to the seller and the builder accepts you as the substituted buyer. Big builders refuse to enter in to such tripartite agreements,
2. In the second method, the 1st buyer apllies to the builder for substituting your name in place of his name as the buyer and the builder issues fresh allotment letter (of the flat) cancelling the one already issued to the 1st owner after collecting fees for the same which is generally in between 1 to 3% of the cost though this is not mandatory,
3. Once you get the re-allotment letter for the said flat, you step in to the shoes of the 1st allottee/buyer and act as the buyer.
There is no risk in purchasing this flat from seller even if he does not get into possession.
In the sale deed you have to make the builder as confirming party and the seller as vendor and get the deed registered.
If the title of the flat is otherwise clean which I can not say without seeing the title deed or other relevant papers you can proceed to buy it.
Do get the papers nevertheless checked by a local lawyer.
Without the sale deed being registered in favour of the seller he cannot sell the flat to you. The title can be passed only by a title holder. The seller is the one who should execute a NOC in favour of the builder to allow him to sell the flat to you. Thereafter, possession letter can be issued in your favour.
