• Transfer fees charged by builder in Mumbai

I am planning to buy a property in Mumbai from a registered owner. I intend to use my savings (without taking any home loan) for this purpose.
The property is under construction and the builder has not yet handed over possession. 
The builder infoms that he will charge approx. Rs. 1000 psf as transfer charge and only then issue the NOC. 
My question is:
1. Is an NOC required for purchasing a property on resale from a registered owner? 
2. Can I get the property registered in my name without the NOC from the builder and without involving the builder in my sale-purchase agreement / transaction with the onwer?
3. Can the builder refuse to record my name as the 'new owner' in his records in the absence of NOC?
4. What are the legal consequences on me or my property
5. The owner (from whom I intent to buy) had registered the property in his name 6 months ago by paying stamp duty and registration charges. Do I still need to pay the stamp duty and registration charges. I have heard about some rule which grants some benefit of stamp duty. Can you pls clarifty.
Asked 8 years ago in Property Law
Religion: Other

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4 Answers

1) NOC from builder is required for purchase of flat from regd owner

2) since property is under construction you would need tripartite agreement to executed between seller , purchaser and builder.

3) builder can refuse to record your name as new owner in his records

4) if you purchase property without builder consent your name would not be recorded as owner by the builder . it is in your interest to wait till construction is completed and Oc issued and society formed of flat owners

5) society cannot charge more than Rs 25000 as transfer charges

6)resale of a property within one year of buying it from a developer would result in the state collecting stamp duty only on the profit from the transaction.

Ajay Sethi
Advocate, Mumbai
96803 Answers
7810 Consultations

wait for society formation .

2) let builder complete construction and obtain OC

3) most projects are plagued by delays .

4) purchase flat after society is formed

Ajay Sethi
Advocate, Mumbai
96803 Answers
7810 Consultations

Since the Flat you intend to buy is in an under construction project and the handing over of possession is yet to be done, the builder can charge a transfer fee provided there is a clause in the sale deed that even after registration but before hand over of the possession of the flat if the registered owner were to sell his right, title and interest in favour of a third party then in such a event also the seller would need to pay the builder a transfer fee for such a transaction.

Only if this is provided for in the sale deed would the builder be justified in demanding this fee. If not, the builder cannot demand this amount, neither are you inclined to pay this.

However since possession has not been given yet, you would need to take an NOC from the builder as the same would be required by you post registration in order to take physical possession of the flat. And in order to get the NOC if the builder demands a fee in the guise of "Transfer Fees" he would be justified in doing so. However the sum of Rs.1,000/- per SFT would be wholly unreasonable.

Each time there is a sale, Stamp duty and registration has to be borne by the Purchaser. There would not be any exemption from this.

Kiran N. Murthy
Advocate, Bangalore
1298 Answers
194 Consultations

1. I always say that it is most unwise in India to purchase an under construction property as builders, majority of them, are dishonest who either flee or dilly dally after receipt of advance amount. Be that as it may, if the sale deed executed in favour of the present owner mandates a NOC from the builder then alone the NOC is required. If the requirement of NOC is not traceable to the sale deed in favour of the present owner then it is not at all required.

2. If NOC is mandatory, and it is not obtained, the builder may refuse to incorporate your name in the records.

3. Conduct due diligence to ensure that title of the property you intend to purchase is free and marketable as it is basic law that nobody can convey a title better than his own title.

4. The stamp duty and registration charges will have to be paid on the execution of sale deed in your favour.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

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