Society Conveyance Deed: All You Need to Know
Property

Society Conveyance Deed: All You Need to Know

Did you know that a Conveyance Deed is required to acquire property in a housing society? Many people do not know that such a Conveyance Deed exists.  After developing a housing structure with a number of flats, common areas, etc., the developer sells these flats to multiple buyers for a price (making a profit in the process). The buyers come to own the individual flats, and they all have a common right to utilize the common areas. The flat-buyers then come together to form a housing society. The housing society regularly raises subscriptions from the members. It uses the proceeds to service the common areas, provide common services (such as electricity backup and water supply), hire employees for maintenance and housekeeping, and so on. Having a Conveyance Deed confers the legal ownership of the common areas of the housing society and plays an important role in proving legal ownership and later redevelopment projects. 

 

The Importance of a Conveyance Deed in Housing Societies

The ownership of the land is first transferred from the original landowner to the developer. With their newly acquired rights over the land, the developer can now develop society on this land. They commence construction and meanwhile begin marketing the to-be-completed society to prospective buyers. Those who agree to buy the completed flats enter into an agreement with the buyer. This agreement may be called by different names, such as ‘Sale Agreement’ or ‘Purchase Agreement’ and so on, but they are all the same in essence. There may be a number of clauses in this agreement. Amongst these, the most important one typically states that the developer promises to hand over the flats to the owners once the construction is completed.

When construction is completed, the developer hands over the flats to the respective buyers. However, there’s a catch. As a buyer, you have only acquired possession of your flat. The developer continues to own the whole land and all the buildings which stand on it. A possessor has some but lesser rights than an owner. Hence, in some sense, the developer can still continue to lord over you since they have more rights over the property than you do. To transfer the ownership of the whole land and the buildings standing on it to the respective buyers, the developer must execute a Conveyance Deed. 

A Conveyance Deed is a legal document that conveys some rights over an immovable property from one person to another. The developer must execute the Conveyance Deeds of flats and common areas to transfer their ownership rights to the respective owners and the housing society. Thus, the buyers will then become the owners of their respective flats, and all the buyers will then become the common owners entitled to jointly use the common areas.  

 

How to Execute the Conveyance Deed 

Keep the following pointers in mind while executing each required Conveyance Deed: 

  1. It must be written and signed by the parties. 

  2. It must be attested by at least two independent witnesses. 

  3. The required stamp duty must be paid. To ensure this, the Deed must be executed on non-judicial stamp paper of the same value as the stamp duty required to be paid. 

  4. It must be compulsorily registered with the local Sub-Registrar of Assurances. 

  5. It must clearly identify, at the very least, the land and other properties being transferred, the identity of the parties, the title history of the land and properties in question, and the fact that ownership rights are being transferred. 

 

People Also Read This: Buying a House? Have You done your Legal Checks?

Documents Required for Executing the Conveyance Deed

  1. The duly executed and stamped Conveyance Deed must be presented to the office of the local Sub-Registrar of Assurances for registration. 

  2. Some states may require the advocate, or registered deed-writer, who drafted the Conveyance Deed to affix a declaration, and their registration number, on the Deed. 

  3. Proof of payment of the registration fees payable, if any. 

  4. Identity, and Address, Proofs of all the parties and the attesting witnesses. 

Those who read this Article also Consulted a Lawyer about Conveyance deed.  

In practice, members of housing societies often have trouble getting developers to execute Conveyance Deeds for their buildings. In such cases, some states allow the members of the housing society to request the State Government to provide them a Deemed Conveyance Deed. For instance, Maharashtra allows members of housing societies in the state to request a Deemed Conveyance Deed

Deemed Conveyance Deed

Once the State Government provides a Deemed Conveyance Deed, although the developer has not really executed the required Conveyance Deed, the law will consider that it has been executed. This is a fiction of the law. Consequently, the members of the housing society will be entitled to the same rights they would have possessed had the developer executed the required Conveyance Deed. 

If your state allows you to obtain a Deemed Conveyance Deed, you have to file an application for this purpose before the competent authority, supported by the required documents. The authority will usually hear both the parties and pass a reasoned order. Accordingly, they will either accept or reject your application. If they accept the application, you will be able to obtain the Deemed Conveyance Deed. The documents typically required to obtain a deemed conveyance deed are:

  • Relevant land records, such as municipal records, land revenue records, etc. 

  • Copy of development agreement between landowner and builder. 

  • Copies of registered and stamped agreements of each flat

  • Approved building plan. 

 

In Maharashtra, the fee for deemed conveyance is INR 2000. Earlier, there was also a need to submit an occupation certificate from the builder, but now this requirement has been scrapped. The housing society can obtain an occupation certificate from the municipal corporation after the conveyance has been done. 

It is always preferable to take legal help while drafting a Conveyance Deed. Many builders do not adopt the traditional Conveyance method, and the flat-owners have to resort to deemed Conveyance.

Conveyance Deed and Sale Deed: Two sides of the same coin?
Property

Conveyance Deed and Sale Deed: Two sides of the same coin?

It is everyone’s dream to be a proud owner of a house. Isn’t it? No matter big or small, after all your owned house is your own. While the process of buying a house in India is fairly complicated, it is a known fact that the business of real estate is marred with lack of transparency and corruption at the grass root levels. To make matters worse, there are hardly any government authorised information outlets from where you can get complete information about the process of buying a house and the legal formalities involved.

In the absence of this valuable information, the entire process of owning a house becomes even more nightmarish for prospective buyers, let alone knowing the difference between what a particular document means and why that document is important in the purchase process. Ask any individual who is going through the process and he or she will tell you certain realities that are horrifying to hear.

Nevertheless, we resolve to clear the air for you. By the end of this article, you will have a reasonable understanding about mandatory property documents like conveyance deed, sale deed, difference between these two documents and so on.

What Is A Conveyance Deed?

It is a legal document that is used to willingly transfer the title of the property from one person to the other. The transfer of title can be in the form of either a gift or a lease or an exchange or a mortgage or a sale. A conveyance deed essentially has the following characteristics:

  • Conveyance is an act of transferring ownership of property from one person to the other.

  • Deed is the legal document that is a binding contract between two parties and in India it is governed by the Registrations Act 1908.

  • Conveyance Deed is the most important document required to buy a property.

  • Without conveyance deed, property purchase is invalid.

People Also Read This: Society Conveyance Deed: All You Need to Know

What Is A Sale Deed?

Before going further, we must also understand this. It is a legal agreement between the buyer and seller of the property where seller agrees to transfer his or her ownership to the buyer through sale on meeting certain mutually agreed terms and conditions. The important characteristics of a sale deed are:

  • A sale deed is one type of a conveyance deed

  • A sale deed and an agreement to sell are two different legal documents.

  • An agreement to sell does not transfer ownership or title of property from seller to buyer.

  • Sale deed includes general terms and conditions of property sale like details about the property being transacted, current owners (seller), new owner (buyers) of property, detail of loans (if any), utility payments like water and electricity, statutory payment like property tax, details of transfer of property title, rights and ownership, agreed amount of transaction and payment mode (full or part) and indemnity clauses.

Those who read this Article also Consulted a Lawyer about Conveyance Deed and Sale Deed.  

 

What is the Difference Between Conveyance Deed and Sale Deed?

The two terms, conveyance deed and sale deed, are used very frequently in real estate transactions and not many of us know the difference between the two. To put it simply, these terms many-a-times are used interchangeably. However, there is only a small difference between these two documents – a sale deed is a type of conveyance deed whereas the conveyance deed is not considered as a sale deed.

Type of Conveyance Deeds

While there are so many jargons that you hear related to property documents, it is important to know various types of conveyance deeds that can be executed. There are three:

  • Freehold Conveyance – This means the owner of the property has free right on the property including both internal and external structure. This is issued to the owner of the property by the designated state authority (for example, Delhi Development Authority in case of properties in Delhi) marking the property as ‘Freehold’.

  • Leasehold Conveyance Deed – This means the owner of the property only has rights within the four walls of the property and not the external structure. Generally, the common area and the building is owned by the landlord.

  • Mortgaged Conveyance Deed – This means that the property is mortgaged with a bank or financial institution. However, the owner can enter and enjoy the privileges related to the property.

People Also Read This: Lease Deed Registration: Everything You Should Know

Contents Of A Conveyance Deed

It is also important to know the contents that go in a conveyance deed before two parties sign it. A conveyance deed document should have details about area of the property (demarcation), details of annexed property, full chain of titles leading up to the current owner (seller), details of property handover to buyer, possession letter(s) and all terms and conditions of the property transaction. Any person must also take care of following while executing a conveyance deed:

  • The owner of the property (seller) must certify that the property is free of any legal restrictions or disputes.

  • The seller should also produce the authorised payment receipts of utility payments like water, electricity and gas to the buyer.

  • The seller should also clear the property tax dues prior to execution of the deed and share the authorised payment receipts with the buyer.

  • The buyer must pay TDS on property sale amount to the respective state government and submit the receipt to the seller.

  • In case there is some loan taken against the property, it should also have details of the loan. The seller should clear the outstanding amount to the lender before executing the deed.

  • The seller should convey the exact date by which the final possession of property will be given to the buyer.

  • The conveyance deed should be executed in presence of two witnesses and they must sign the conveyance deed to mark their presence.

  • The conveyance deed should be submitted to the local registrar’s office along with all original documents for registration within four months of execution. This should be followed by payment of stamp duty and registration fee to the respective state government.

          Those who read this Article also Consulted a Lawyer about Conveyance deed. 

It is important to clearly draft legal document(s). It is even more important to get them executed carefully. Afterall, when it comes to matters as sensitive as property, you cannot afford any lapses. Talking to a Legal Expert is a right thing to do.

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