Did you know that a Conveyance Deed of society 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 Conveyance Deed of 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 Conveyance Deed new rules.
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:
It must be written and signed by the parties.
It must be attested by at least two independent witnesses.
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.
It must be compulsorily registered with the local Sub-Registrar of Assurances.
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.
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Documents Required for Conveyance Deed
The duly executed and stamped Conveyance Deed must be presented to the office of the local Sub-Registrar of Assurances for registration.
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.
Proof of payment of the registration fees payable, if any.
Identity, and Address, Proofs of all the parties and the attesting witnesses.
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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.
Conveyance deed cost varies from state to state. 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 Conveyance deed new rules, and the flat-owners have to resort to deemed Conveyance.