• Resale of under construction property and transfer of allotment

Can a builder change conditions mentioned in the 1st Allotment letter of a property while transferring allotment to 2nd seller. 
case: 
say, X buys a property and allotment letter is issued to X. 
X sells it to Y before possession and registry to Y.
Now in this case builder will issue another allotment letter in the name of Y. Can Builder change the conditions in the allotment letter being issued to Y.
Pl. clarify
Asked 2 years ago in Property Law from Greater Noida, Uttar Pradesh
1) no registered sale deed has been entered into between builder and X 

2) in the event X sells property to Y it would need builder consent . 

3) builder can while giving consent  charge transfer charges but terms of allotment cannot be arbitrarily changed . 

4) refuse to accept changes in terms of allotment and seek refund of money paid  to X
Ajay Sethi
Advocate, Mumbai
23346 Answers
1221 Consultations
5.0 on 5.0
1. X has not yet bought the property but booked it and probably executed agreement of sale,

2. No sale deed has yet been executed and registered in his favour and he has got allotment letter only which states that a particular flat has been agreed to be sold to him,

3. The sale deed registered by X in favour of Y, even without taking possession of the  flat and without the consent of the builder is illegal,

4. In this case the proper procedure would have been to execute and register a sale deed between the builder and Y wherein X should have been made a Confirming Party detailing his involvement in the recital of the sale deed,

5. Strictly speaking, the matter has now become legally complicated since you have sold the flat to Y before it was sold to you by the builder, without his consent,

6. However, at this stage, make a rectification deed executed and registered wherein he agrees to transfer the allotment of the flat in favour of Y by taking transfer fee,

7. He can not change the condition of the allotment letter issued to Y.
Krishna Kishore Ganguly
Advocate, Kolkata
12131 Answers
233 Consultations
5.0 on 5.0
Hello,
The fact that you have got allotment letter would mean that you have just booked the flat and probably the agreement to sell has been enterd into with an MOU.
If this be the case the Builder will have to enter into a Registered Sale Agreement with Y to whom X has 'sold' the flat alloted to him for a monetary consideration.
Since it is a new agreement minor changes may be incorporated based on the understanding between the the builder and the new purchaser.
However the builder can not make any substantial changes in the allotment as you have agreed to transfer your allotment and the builder ought to honour the original allotmnt to you(X).
In fact it would have been wise to keep the builder in the loop and make the transaction with his approval.
S J Mathew
Advocate, Mumbai
1953 Answers
65 Consultations
5.0 on 5.0
1. Talk to the builder for not charging escalation cost,

2. accept it if Y does not have to pay anything extra unreasonably since it does not matter if the builder can save on penalty,

3. If his proposal is not accepted, he should go to Court.
Krishna Kishore Ganguly
Advocate, Kolkata
12131 Answers
233 Consultations
5.0 on 5.0
1)if material changes have been made in terms of allotment dont accept   the conditions . 

2) you had agreed to purchase flat on basis that possession would be delivered on due date . further if there has been increase in costs dont agree to it . 

3)contact a local lawyer .
Ajay Sethi
Advocate, Mumbai
23346 Answers
1221 Consultations
5.0 on 5.0
if new conditions suit Y then he can accept it otherwise Y must knock the doors of court.
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
Hello,
Y is not obligated to accept the changes the builder has incorporated as the Sale deed has been executed and transfer process has been executed in consent with the builder from X 
The builder ought to have given possession as stipulated in the original allotment letter.
You can certainly take the builder to the court and seek compensation if you are compelled to abide by the new terms and conditions.Engage a lawyer locally to guide and assist you.
S J Mathew
Advocate, Mumbai
1953 Answers
65 Consultations
5.0 on 5.0
1) From the given facts, it looks the builder is trying to be smart. You can disagree to the changes he is looking for in the allotment letter i.e. change on possession date, escalation cost and many others. 


2) What should Y do. Accept or not accept or go to court against the builder

He should not accept the new conditions. Placing him in your shoes will help you understand the situation.
Deepak Tiwari
Advocate, New Delhi
40 Answers
8 Consultations
4.7 on 5.0
Yes you you have kept in agreement that it can be registered to any one whom you mentions
Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultations
3.5 on 5.0
1) terms of contract signed by builder with allottee are sacrosanct

2)  Allotment  letter includes all the details regarding the flat, the payment options and any extra charges that you may have to pay in case of maintenance or additional facilities. It also includes construction schedule, house plans, delivery date and builder’s liability in case of late completion or problems after possession. 

3) This allotment  has all the clauses, terms, conditions and legal implications for the buyer and developer should there be a default on either side. Important points are interest, penalty and default charges for a buyer and clauses of refund of payment in case the project is not completed or is scrapped. Also, the clause regarding sale of flat during construction .
Ajay Sethi
Advocate, Mumbai
23346 Answers
1221 Consultations
5.0 on 5.0
1.best remedy for Y  is that builder first must cancel the allotment letter issued to X.

2.then builder issue a fresh allotment to Y stating new terms and conditions in it and if it suits Y then Y can accept it.
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
You have to understand the following:
1) In cases of sale of flats under construction, a tripartite agreement is entered into between the seller (who had originally booked the flat), the purchaser and the builder. 

2) Under this agreement, the seller assigns his rights to the under-construction flat to the purchaser with the consent of the builder, the purchaser agrees to pay the balance of the original purchase price payable to the builder and the builder agrees to give possession of the ready flat to the purchaser directly. 

Here keyword is "the purchaser agrees to pay the balance of the original purchase price payable to the builder and the builder agrees to give possession of the ready flat to the purchaser directly." 

3) Thus, the purchaser has to pay the amount agreed with the builder. If he feels the amount is unjustified he may talk to builder, go to consumer court.
Deepak Tiwari
Advocate, New Delhi
40 Answers
8 Consultations
4.7 on 5.0
read provisions of Real estate Bill which has been passed by Parliament 1) ‘‘allottee’’ in relation to a real estate project, means the person to whom a
plot, has been allotted, sold or otherwise
transferred by the promoter, and includes the person who subsequently acquires the
said allotment through sale, transfer or otherwise, 

2) builder has  to at time of registration of project with Authority file  proforma of the agreements proposed to be signed with the allottees;

3) 13. (1) A promoter shall not accept a sum more than ten per cent. of the cost of the
apartment, plot, or building, as the case may be, as an advance payment or an application
fee, from a person without first entering into a written agreement for sale with such person.
(2) The agreement referred to in sub-section (1) shall be in such form as may be
prescribed and specify the particulars of development of the project including the construction
of building and apartments, along with specifications and external development works, the
dates and the manner by which payments towards the cost of the apartment, plot, or building,as the case may be, are to be made by the allottees and the likely date on which the possessionof the apartment, plot, or building is to be handed over and such other particulars, as may be prescribed.

4) under section 16 of real estate ACT 2013 16. (1) If the promoter fails to complete or is unable to give possession of an apartment,
plot or building,—
 (a) in accordance with the terms of the agreement or, as the case may be, duly
completed by the date specified therein or any further date agreed to by the parties; or
 (b) due to discontinuance of his business as a developer on account of suspension
or revocation of his registration under this Act or for any other reason,
 he shall be liable on demand to the allottees, without prejudice to any other remedy available,to return the amount received by him in respect of that apartment, plot, building, as the casemay be, with interest at such rate as may be prescribed in this behalf including compensationin the manner as provided under this Act.


4) in your case you are covered by definition of allot tee . agreement has to be as proforma filed with Authority . if builder fails to honour terms as per agreement you are entitled to refund
Ajay Sethi
Advocate, Mumbai
23346 Answers
1221 Consultations
5.0 on 5.0
the consumer protection act particularly sections 1 to 14  safeguard ur interests in ur case.

if builder breaches the allotment letter terms and conditions and fails to provide services in stipulated time then you can file consumer complaint in consumer forum to get desired reliefs.
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
1. The answer is hidden in your question itself,

2. it is a transfer of allotment,

3. It is not a fresh allotment to incorporate new terms or price,

4. Only the name of the transfaree will be changed.
Krishna Kishore Ganguly
Advocate, Kolkata
12131 Answers
233 Consultations
5.0 on 5.0

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