FLAT PURCHASE-BY WAY OF SHARE CERTIFICATE METHOD

FLAT PURCHASE-BY WAY OF SHARE CERTIFICATE METHOD

Co-operative Societies Acts of many states provide for formation of Housing Co- operative housing societies.

Karnataka Co-operative Societies Act also permit the formation of Co-operative housing societies. These societies acquire the land; construct the flats, which are allotted to its members. The society allots shares to its members. Such societies need to be registered with registrar of Co-operative societies.

Members are of different category, the member, associate member, and nominal member. Individuals, Partnership firm, registered company, registered society local authority, State government, central government, public trust, any other corporate body registered under the relevant act, may become member of the co-operative housing society, subject to the rules governing the admission.

A minor can also become a member of Housing Society through his guardian; Certain states have put restriction of membership of family trust, Hindu undivided family.

There are different types of Co-operative housing societies.

1.A society purchases the land or takes on lease divide into several plots and allots to its members. The members construct houses, on such allotted lands. In such cases, the land is owned by the societies and the houses on plots to members. Such societies are caller Tenant ownership type housing societies.

2. Societies acquire land by sale or on lease and construct the buildings; flats are allotted to the members. In such cases, both the land and building are owned by the societies. These are called tenant Co-Partnership Co- operative housing societies.

3. Societies are also formed by the persons who purchase the flats from the builders, under agreement as per flats ownership acts of the respective states. In this case also, both the land and building belong to the society after the execution of conveyance by the builder in favor of the society. Such societies are called flat owners Co-operative housing society.

Flat owners co-operative societies issues shares to its members by which the members gets the right to live, reside and enjoy the flat. Flat owners Co-operative society societies are of more common. These societies are very popular in Maharastra, Gujarat, and West Bengal and not so common in Karnataka.

Flat owners Co-operative societies issues shares to its members by which the members gets to right to live, reside and enjoy the flat. It is to be remembered that the rights and interest of the member in the flat is limited only to reside and enjoy. Member can transfer only such right. He is not the absolute owner of the flat. On sale of the flat, society transfers the shares to the names of the purchaser, on purchaser complying with the formalities. After the purchaser is admitted, the purchaser becomes a member of the society and acquires right to reside and enjoy, the flat.

4. In case of death of a member the society transfers the shares to the name of the nominee;

In the absence of any nomination, the society may transfer the shares to anyone of legal heirs on consent given by other legal heirs. In case of any dispute, the legal heirs may have to obtain letter of administration from a competent court.

The flats are to be required to be occupied by the owners. In case the flats are let out, the members have to pay non- occupancy charges to the society.

In case of transfer of share to the others, the member has to give a notice to the society along with the consent of the proposed purchaser. The member may also obtain no-objective certificate from the society for transfer of share. The managing committee on considering the notice of transfer will call for the following documents:

Application of the transfer of shares along with share certificate.

Membership application for the purpose of transfer Resignation letter from the original member.

Prescribed transfer fee, membership fee, price of the shares premium amount, copy of the stamp duty paid agreement, declaration by both transferor/transferee under urban land (ceiling and regulation) act 1976, if applicable; various reasons for transfer declaration to use the flat for the purpose which it is brought, under taking to discharge all liabilities to the society, no objection letter from the financing agency, if the seller has availed loan, No objection letter from the district collector, if the land is allotted to the society by the government, No objection letters from any other statutory agency, which has given land to the society.On receipt of all these requirements, the application of transfer will be placed before managing committee. However, only general body has powers to admit a new member,

The affairs of the Housing Society are managed by a managing committee, elected by the member from out of the members.

Generally, the builders/owners sell the flats to the purchasers, but will not convey the land to the societies formed by the purchasers. In such cases the title of the purchasers is not perfect, since the land stands in the name of the builder owners.

In such cases the owner will be entitled to further FSI if permitted. Many states provide in their statutes that the builder/owner should take steps for registration the Housing Co-Operative society and thereafter transfer the land to the society within a time frame. As per the sections 10, II of the Karnataka Flats Ownership act 1972 and Karnataka Flat Ownership rules 1975, Rule No.10, 11, the promoter builder shall submit an application for registration of the society within four months from the date of which minimum number of persons require to form a society have taken flats - Thereafter the promoter shall convey the land to the society within four months from the date of registration of society.

5. Another interesting aspect is the charge created on individual flats/ apartments by the members. The right of the member is limited, to reside and enjoy the flat, but they do not have any ownership right. So the members can mortgage their right to reside, hence such flats cannot be alienated, since the ownership rests with the Housing Co-Operative Society. In case of sale, only the right to reside in the flat is transferred to the purchaser, he will not acquire absolute ownership. So is the case, where the flats are mortgaged to the financial institutions by members.No objection certificate from the Co- Operative society is essential to mortgage the flat.

Generally, the builders/owners sell the flats to the purchasers, but will not convey the land, in such cases the title is not perfect.

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In case of the transfer of flats by transfer of shares, the Co-Operative societies will not register the flats in individual names, and the entire property stands in the name of the Co-Operative. Societies; the property is also assessed for tax as a single entry.

Karnataka government is of the view, that individual flats should be registered in individual names by regular conveyance deed duly registered and tax assessment should be done flat wise. Tracing the title of the flat requires verification of the society records, its byelaws and share certificates Conveyance:Essential for Co-operatives societies The purchasers must not neglect to acquire the title of the property or flat he/she purchasers on a purchase of the flat by acquiring share certificate, the purchaser gets only the right to occupy which is not title to the property. It is observed that he builders themselves do not acquire ownership of land from the landowners. They enter into development agreement and GPA with the landowners to develop and sell the flats, which is not a good practice. But some builders acquire ownership from the landowners them start construction which is in a way easier to convey title to the purchaser i.e. from the builders to the purchaser.

Housing societies to witness freedom

The Mumbai scenario of purchasing and acquiring the flat by share certificate is slightly different. Nearly 60,000 flat owners are having only share certificates. Maharastra Govt. has made certain provisions easy for them.

By approving the self-reliant legislation by the cabinet, co-operative societies have been made self reliant, so that there is no dual control on them. Self-reliant legislature is on the pattern of 'Atma-Nirbhar' legislation successfully implemented by Madhya Pradesh. Under the new legislation the co-operative society can opt to be administered or continue under the existing act. If they opt the self-reliant or 'Atrna-Nirbhar' law, responsibility of the co-operative department will be only to register such societies, while the rest of the affairs will be managed by the society. 'Atma-Nirbhar' law provides for setting up machinery for redressed of grievances. The societies or its members need not approach the co-operative department.

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ALLOTMENT OF SITES BY BDA

ALLOTMENT OF SITES BY BDA 

Bangalore Development Authority has become hyperactive and has been distributing the sites in large numbers. Naturally the people are eager to know the methodology adopted by BDA in allotting the sites. This write up gives the broad outlines of the procedure followed by BDA.

Bangalore Development Authority (allotment of sites) Rules 1984 govern the allotment of sites. These rules are periodically modified. Whenever authority forms an extension or layout; offers the sites in such extension layout to the general public, wide publicity will be given mentioning the location, number, area, and last date for submission of applications. The details are also published is not less than three newspapers of Kannada and English, which are published from Bangalore having wide circulation.

Authority is empowered to set apart, 40% of the sites to economically weaker section at 50% of the value of the sites; out of this the 15% of the sites are reserved to schedule castes, 3% to schedule tribe and 2% to the schedule tribes and remaining sites to economically weaker sections. BDA may also allot sites on lease basis to educational, religious, charitable institutions, which are registered under societies registration act, or Trust for public purposes. But such allotment should not be more than 5% of the total site area in each layout. Further sites reserved for civic amenities, public parks and playgrounds cannot be allotted in such manner.

REGISTRATION:

Only the persons who have registered their names on payment of prescribed registration fee are eligible to apply for allotment of sites. The registration fee at present is as follows: -

 Area of the site in sq. mtrs                         Registration fee

a)350 and above ...                                       Rs. 2,000/-

b)225 above but below 350                            Rs. 500/-

c)Below 225                                                  Rs. 100/-

If the applicant withdraws the registration the registration fee paid less 10% will be refunded to the applicant. Registration once done is valid for any subsequent attempts. In case the applicant dies after registration, the spouse, of the deceased applicant is entitled to apply for allotment. If the spouse is not alive the dependent children, will be deemed to have registered area have right to apply for allotment. The registered applicant or his legal heirs have to apply for allotment of site in prescribed form (form II).

The applicant should also remit 12.50% of the notified cost of the site along with application as initial deposit. The initial deposit payable in case of Schedule Castes, Schedule Tribes, area backward tribes is 5%.The correctly filled application along with initial deposit should reach the authority before the time fixed for receipt of such application. The BDA notification generally informs the mode of paying the initial deposits, by remitting to certain banks. The completed application forms may also be handed over to the specified branches.

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In case the application is pending with BDA for allotment and the authority invites applications for further sites, the applicant should again apply in form II (A), but there is no need to pay initial deposit.

ELIGIBLE PERSONS:

Only a person who is major, and a resident of Karnataka for not less than 15 years prior to the date of registration, and who or whose family members does not own a site or house on Bangalore, or not allotted any site or house by BDA or Housing Co-operative Societies is eligible to apply.

The requirement of 15 years residence in Karnataka is subject to relaxation in case of persons who are residents of Karnataka, but being employed in armed forces serving outside Karnataka; have gone out of the state for employment, higher education, but have bonafide intention to settle in Bangalore metropolitan area. BDA may also waive this condition with the prior permission of the government, in case of persons who have achieved outstanding performance in field of art, science or in any other field.

The allotment of sites to different segments of society on percentage

basis is as follows: -

a) Backward tribes - 2%

b) Scheduled Tribes - 3%

c) Scheduled Castes - 13%

d) Members of armed forces Ex-servicemen, and members of the families of     decreased servicemen - 10%

e)State government employees - 10%

f ) Employees of central government public sector undertakings, statutory bodies owned or controlled by state or central government - 8%

g) Physical handicapped - 2%

h) General public - 50% Persons who have outstanding achievement in this field ego Arts, Science, Sports - 2%

If sufficient number of applicants are not available in category A the balance sites will be transferred to category B, then to category C, and then to category H (general public) likewise in the absence of sufficient number of persons in category E, F, G, H, the balance sites will be transferred to category H (general public). The word outstanding achievements is defined as achievement at state, national, international level, where an award or a medal is preserted by the authorities duly recognized by state or central government.  

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CONSUMER REDRESSAL FORUM AND PERIOD OF LIMITATION

CONSUMER REDRESSAL FORUM AND PERIOD OF LIMITATION

What is a complaint and the period of limitation:

At the outset, one should note that, while filing the Complaint before the Consumer Redressal Forum, it should be ensured that the complaint is well within a period of two years from the date on which the cause of action has arisen i.e., to say the limitation period for filing ‘Complaint’ before Consumer Redressal Forum, is two years only.

What constitutes a complaint:

In terms of Section 2 (1) (c) of the Consumer Protection Act, ‘Complaint’ means any allegation in writing made a complainant alleging that:

1) An unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider;

2) The goods bought by him or agreed to be bought by him, suffer from one or more defects;

3) The services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;

4)a trader or the service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price;

(a)  fixed or under any law for the time being in force;

(b) Displayed on the goods or any package containing such goods;

(c) Displayed on the price list exhibited by him by or under any law for the time being in force;

(d)   Agreed to between the parties.

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5) Goods which will be hazardous to life and safety when used are being offered for sale to the public;

(a) in contravention of any standards relating to safety when used are being offered for sale to the public;

(b) if the trader could have known with due diligence that the goods so offered are unsafe to the public.  

6)Services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be injurious to life and safety; with a view to obtaining any relief provided by or under this Act. 

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WHY BUILDING BYELAW VIOLATIONS?

WHY BUILDING BYELAW VIOLATIONS?

Building byelaws are introduced in urban local bodies to prevent indiscriminate building activity affecting ventilation, aesthetics, traffic problems etc. Later, U.S. method of zoning regulations were also introduced in Indian cities for land use control, control of density of population, control of developments around national monuments etc. If building byelaws and zoning regulations are followed, our urban areas would provide better living environment.

Most of our people do not like building byelaws as they feel that they are restrictions for exploitation of their property to the maximum extent. Commercial uses anywhere, with no parks and open spaces in their lands, narrow roads, and without amenities in their layouts etc., is what many of the land owners and investors like for developing their land. They want freedom for development like it used to be in olden days. With such attitudes they violate building byelaws and zoning regulations meant for good living environment.

TYPE OF DEVIATIONS:

High land values: Bangalore being a rapidly growing large city with about 60lakhs populations at present; has very high land values. Majority of the land owners/builders therefore want to exploit their land for more usage and returns. Violators therefore build more area than permitted by the Mahanagar Palike.

Setbacks: Set backs are prescribed in the building byelaws to provide for ventilation in the building, privacy from the neighboring buildings and road, and to be away from the road to avoid dust and traffic noise. Part of front set back will be useful to the B.M.P. for widening of road due to increase in traffic volume. Majority of the owners / builders therefore reduce the setbacks to build more area than permitted by B.M.P. as per byelaws.

Floor Area Ratio: In the Building Byelaws, Floor Area Ratio (FAR.) is prescribed separately for intensely developed area, moderately developed area, and sparsely developed area. Earlier, EAR used to be high in more intensely developed central areas in view of land values, and lower EA.R in the suburbs where land values are less. But the approach since the C.D.P. of Bangalore, 1984 is to fix less EA.R. in the central area to enable decongestion and higher EAR in the suburbs to encourage development where the traffic and other problems are less. But owners and builders ignore the FAR prescriptions and utilize more FAR in developed area to cash in on high land values.

Staircase: Owners of small sites build staircase outside the building, in the area meant for setback area; and utilize the staircase area within the building; to enable letting out first floor and upper floor of the building if possible, so that separate entrance is available.

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Balcony: Open Balconies sanctioned by the BMP are converted in most of the cases for extension of the living or bed rooms. Open balcony area is not considered for F.A.R purpose and such conversion of balcony areas will increase the floor area used for self or for sale to get more returns.

Multi-dwelling units: Multi- dwelling units I apartments are not sanctioned by B.M.P. in case of B.D.A. allotted sites whether new or very old. The reason being that persons apply to B.D.A. for allotment of site for building their own house. When such is the case building more than one dwelling unit defeats the purpose for which the site is allotted. When the owner wants to build one dwelling unit in each floor for use by his sons I daughters permission is not considered by BMP.

Land use: Zoning Regulations of the C.D.P. of Bangalore prescribe land uses like; residential, commercial, public uses etc. for all the areas covered by the Plan. This sort of restriction on the land use is imposed by BDA for proper living conditions. Existing residential buildings are converted to commercial use along main roads, approach roads to localities, which are nearer to commercial area, nearer to public use I industrial area etc. Service industries also come up in such areas. Residential buildings are built in public use zone I park zone I industrial zone etc. Such violations also take place in other zones and Green Belt etc.

Better Returns: Violations are made to get more returns. Open areas in bungalows in the central areas are converted in to shadhi mahals I Kalyana mantaps, halls for reduction sale etc. Such conversions are observed on Infantry Road, Bowring Hospital Road etc. Acute parking and traffic problems are observed at these buildings. Many of factory buildings in the West of Chord Road industrial area which were incurring losses are converted into kalyana mantaps and as a result the service roads and other roads where such buildings are located are experiencing traffic problems.

Road Margins: Road margins are prescribed in the C.D.P. for congested roads to enable widening at a later date. Majority of the owners of sites encroach on road margins enforced by B.M.P. It becomes very difficult to widen the roads at a later stage to ease traffic problems.

Overheads: Some owners of properties are not willing to pay the overheads demanded by officials for sanction of building plans. They take up constructions without obtaining sanctions. Such constructions are mostly not in conformity with the byelaws.

Further Sanctions: If a sanctioned building is constructed with deviations, the applicants hesitate to approach B.M.P. for sanction for additional construction. In such cases when they come to know that deviations will be identified during inspections by officials, they do not make application or advised by the concerned not to do so for further sanctions. They will have the blessing of the area officials without sanctions for additional constructions.

Collusion of concerned: Deviations in considerable number of buildings take place in collusion with area officials and politicians. Only when neighbors complain; notice is served by some officials for deviations with wrong advice in many cases to obtain stay orders from the courts. The matter is not pursued later and the applicants utilize the deviated constructions as they want.

Standing Committee for Appeals: The Standing Committee for Appeals blatantly issue stay orders against any legal action on identified deviated portions of buildings both residential and commercial as per the statement of the Urban Development Secretary to the Press on 14.08.2003. Number of buildings is built liberally violating buildings sanctions / byelaws with the confidence that they will approach Standing Corrunittee and forget any actions by the Mahanagar Palike. It was stated by the Urban Development Secretary that the Act is proposed to be amended to put in place a judicial body as an alternative to the Standing Committee.

According to a press report dtd. 05.09.2003, the State Government amended Rules under KMC ACT 1976 and issued circulars to the city Corporation Commissioner that appeals against building demonization order will now come under the purview of the KAT in Bangalore and District Courts concerned in other corporation area. All appeals pending with the BMP standing corrunittee on appeal will be transferred to the KAT.

B) SUGGESTIONS

After identifying the various types of deviations and the reasons for the same, some practical suggestions are made to reduce the number of violations.

a) User friendly byelaws: Building byelaws and zoning regulations of the C.D.P. should be user friendly and acceptable to the public as far as possible. Adopting byelaws not suitable to the local conditions is not good. Byelaws should not be highly technical and should have simple terms so that a common man could easily understand and follow. I boldly say that some of the provisions are not understood / properly interpreted by even architects and civil engineers.

b) Committee to prepare byelaws: The corrunittee to prepare byelaws should comprise of not only technicians but various sections of the public affected by the byelaws.

c) Publicity to draft byelaws: The draft byelaws should be given wide publicity. The media should be involved and comments / suggestions invited. Locality-wise public meetings should be held involving residents welfare associations and their views on the byelaws noted.

d) Periodical revision of byelaws: The byelaws should be revised whenever there is change in the C.D.P. of the city for mutual conformity of the zoning regulations and building byelaws. The 1984 Buildings Byelaws are not yet revised by the B.M.P. Only draft byelaws are now being finalized based on the C.D.P. 1995. Such delays by B.M.P. will have to be avoided.

e) Easier and Quicker sanctions: The building plans should be sanctioned quickly without harassment. A panel of technical officials with town planner, architect, and civil engineer be formed in the B.M.P. to guide and convince the applicants about the good effects of byelaws for ventilations, avoiding traffic problems etc. This panel should also co-ordinate with the concerned sections in the B.M.P. to sanction without delay.

STRICT ENFORCEMENT

In spite of all the procedure to have a user friendly building byelaws and simpler procedure for easier and quicker sanctions, if property owners deliberately violate from sanctioned plans or build without sanction the punishment should be severe including imprisonment for severe violations as provided in the Karnataka Town and Country Planning Act, 1961 enforced by B.D.A for Bangalore.Strict enforcement is necessary to curb violations in building constructions.The following are suggested for reporting of violations and to initiate action in such cases.

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HOW TO FILE A COMPLAINT BEFORE THE CONSUMER REDRESSAL FORUM

HOW TO FILE COMPLAINT BEFORE THE CONSUMER REDRESSAL FORUM

The Consumer Protection act, 1986 came into force from July 1987 onwards.  Immediately thereafter, cases against the Real estate builders were started to be filed before the concerned Consumer Redressal Forums set-up under this Act, all over the Country.   These ‘Consumer Redressal Forums’ are modeled on the ‘Small Claims Court’ pattern and it incorporates safeguards for Consumers against ‘unfair trade practices’.  Complaints against the builders could always be entertained in the ‘Consumer Redressal Forums’. 

In order to straighten the things and to make the picture more clearer, the Government of India amended the ‘Consumer Protection Act’ in 1993.One of the amended portion is that the words ‘Housing Construction’ have been inserted in Clause 2 (1) (0) of the Consumer Protection Act, which defines ‘service’.Hence complaints against builders with regard to ‘housing construction’ can also be filed before the concerned ‘Consumer Redressal forums’.

Jurisdiction to file complaint:

A consumer can get redressal for his grievances, in the form of a ‘three-tier’ redressal machinery, as follows:

1.If the compensation claimed by a Consumer is less than Rs.20.00 lakhs, then the Complaint to be filed before the concerned District Consumer Redressal Forum.

2.In case the compensation claimed is above Rs.20.00 lakhs but below Rs.1.00 Crore, then the matter is required to be moved before the State Consumer Forum; and

3.In case the compensation claimed is above Rs.1.00 Crore, then the case has to be filed before the National Consumer Commission at New Delhi. 

The clause for Appeal is also provided under the ‘Consumer Protection Act.’ 

Who can file a complaint:

In terms of Section 2 (1) (b) of the Consumer Protection Act,a ‘Complainant’ is :

a.A Consumer; or

b.Any voluntary consumer association registered under the Companies Act, 1956(1 of 1956) or under any other Law for the time being in force; or

c.The Central Government or any State Government;

d.One or more Consumers where there are numerous consumers having the same interest;

e.In case of death of a Consumer, his legal heir or representative who and which make the complaint.

Group Complaints:                                

In case there are problems with a common builder, then by way of an amendment to the ‘Consumer Protection Act’ in 1993, all such persons who have purchased houses or flats and have complaint against such common builder can get together and form in to a group and can file a ‘consolidated complaint’ against the common builder.This is in view of the fact that the words ’one or more consumers’ where there are numerous consumers having the same interest’ have been inserted  in the definition of ‘complainant’ in Section 2 (1) (b) as sub-clause (iv) thereof by the amendment.   

However, a caution to be noted here, wherein, it may be noted that, in case the complainants are asking a builder to refund the money paid by one of the consumer for a flat on account of such complainant’s personal need for the money, then in such cases, the complainant may not win the case before the Consumer Redressal Forum.

To corroborate the above position, please find hereunder a case which clarifies the position:

A person did not pay the installments as she should have after she booked a flat with the builder, instead she complained to the Delhi State Commission for refund of the money she had already deposited with the builder.  It appears that she had earlier written to the builder that she needed the money for her domestic reasons.  It was not the case of her that she was asking for a refund because the flat was not being completed or given possession to her.  In this case, the Delhi State Commission held that the client could not be allowed to wriggle out of the contract with the builder.

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AGREEMENT TO SELL PROPERTY

AGREEMENT TO SELL PROPERTY

An Agreement to sell is that the initiative taken towards purchase of a property. This facilitates bother free transfer of property supported the terms and processes that are already mentioned and in agreement to between the vendor and therefore the vendee.

Sale and buy of stabile property needs right smart time for completion of method and compliance of varied obligations, since the stakes square measure high. Thence each the parties have to be compelled to return to an agreement relating to the thought quantity, mode of payment and time period. The terms in agreement square measure place in writing within the style of an agreement, that is understood as Agreement to Sell. The Agreement to Sell is ruled by the supply of the Indian Contract Act 1872 and therefore the Transfer of Property Act 1882.

Being in accordance with the provisions of the Transfer of Property Act 1882, a de jure valid contract between the parties as per the provisions of Indian Contract Act, 1872 is obligatory. This Contract could also be oral or written. More it should be complete or open. an open contract is simply a skeleton, relating the names of parties to the contract, property to be oversubscribed and therefore the thought quantity.

A complete contract could be a elaborated one relating the title, modes of payment, time period for finishing the group action, obligations to be complied with etc. In stabile property dealings, it's not advisable to travel for oral open variety of contracts, because the stakes square measure typically high and consequences square measure grave. Such contracts have to be compelled to be diligently ready relating minute details. The services of a skilled advocate in property matters ought to be availed.

The execution of agreement to sell must be witnessed by 2 persons capable of stepping into contract. Further, with reference to witnesses, it's advisable that the witnesses be from the facet of each parties i.e. one from the purchaser’s facet and one from the seller’s facet. Just in case of execution of an acquisition deed, it's advisable that each witness be from the purchaser’s facet. In keeping with the Indian Registration Act, 1908, the registration of the agreement to sell is merely nonobligatory. If registered it helps in establishing the bonafides of the group action. Further, encumbrance certificate discloses the subsistence of such an agreement that deters to any extent further agreements, unless the prevailing one is off.

The rights and liabilities of the vendee and trafficker

Section fifty five of the Transfer of Property Act deals with the rights and liabilities of trafficker and vendee. If the agreement to sell doesn't specifically ask the rights and liabilities of trafficker and vendee, the provisions of section fifty five square measure enforceable.

There is a caution against the utilization of words like “as is wherever is basis”, since in such circumstances, the vendee needs to specifically perform the contract regardless of the fabric defect within the title of property. There’s no prescribed format of agreement to sell in respect of an stabile property. it's to be ensured that the agreement is de jure enforceable and binding on the parties which it's not a mere formality.

Persons stepping into the agreement

Persons should be competent to enter into a contract. They need to be major, sound mind and not disqualified from acquiring. The names of the parties to the contract, their age, and father’s name, just in case of wife, the husband’s name, and places of their residence ought to be mentioned. Care ought to be taken to form all the house owners as parties to the contract. Just in case any of the joint house owners isn't on the market to execute the agreement, a clause is accessorial to the agreement that every one persons having interest within the property shall execute the conveyance deed. A partnership firm isn't a legal person and per se all the partners ought to sign the agreement.

Title to property

Nature of the title command by the vendor together with any encumbrance like lease, mortgage, and charges on the property ought to notice an area within the agreement. If the performing artist of the agreement isn't the owner, then his standing and his authority beneath that the agreement is dead ought to be mentioned.

A General power of professional person (GPA) holder will execute an acquisition on behalf of the owner if he has the ability to try and do thus. However, he's in charge of the money received from the vendee. Any material defect within the property, defect within the title disclosed by the vendor, or benefits, edges that have return to the notice of the vendee, ought to be elaborated.

Exact location and outline of the property in agreement to be oversubscribed

Location and outline ought to contain the roads on that they front, the prevailing and former occupations, the municipal variety, street, road with complete boundaries, and properties encompassing the property in agreement to be oversubscribed. It ought to additionally embody the world of the positioning, engineered up space, floors, variety of constructions; materials used etc. the small print ought to be complete thus on determine the property clearly. Sections twenty one and twenty two of the Indian Registration Act created it obligatory to disclose the small print.

Agreed thought quantity and mode of payment

Consideration quantity, the worth at that the property was in agreement to be transferred is incredibly vital and a vital portion of the agreement. If the thought quantity isn't mentioned, the contract becomes void. The thought disclosed ought to be in cash worth, and it shouldn't attract the provisions of exchange of property as elaborated in Sec 118 of the Transfer of Property Act.

Whether the thought quantity is adequate or not is immaterial. The agreement ought to disclose any half payment of thought or earnest, the mode, place and time of payment of balance cash.

Production and scrutiny of documents of title

The agreement ought to contain a clause that the vendor ought to manufacture the documents of title in his possession for scrutiny by the vendee and his advocate. Sec 55 (1) of Transfer of Property Act makes it obligatory to supply the documents for scrutiny.

Possession

Possession is that the most vital ingredient of the sale group action. The mode and time of possession ought to be clearly and specifically mentioned. it should please be noted that the vendor needn't offer possession of the property to the vendee on execution of agreement and on half payment. Possession needs to run on completion of the sale method and receipt of full thought quantity once execution of the conveyance deed.

If the possession is given on half payment of the thought, section 53 A of the Transfer of Property Act operates. In such a happening the vendor shall ne'er be in a very possession. The sole recourse on the market to the vendor is to recover the balance quantity due.

The agreement ought to additionally ask the mode of possession of the property and whether or not it's vacant or not. If the property is let loose, the vendor could provides a letter of allotment to the tenants, to acknowledge the vendee because the future transferee. In such cases, a clause relating to token delivery of possession by the vendee, and issue of assignment letters ought to be enclosed.

Period of completion of sale method

The sale agreement ought to contain a clause stipulating the time among that the vendee pays the complete thought quantity and obtain the sale deed dead and registered by the vendor. it's invariably advisable  to pay less quantity of the sale thought as advance and more, it ought to be unbroken in mind that the balance most portion of the sale thought should be paid solely at the time of registration of the sale deed.

The agreement of sale ought to mention the date/period of completion of the sale group action and registration of sale deed. The date for paying the most portion of the balance payment should be mentioned, as at the time of registration. It’s desirable to construct the sentence in such manner for e.g. “The balance payment shall be created on or before thirty.10.2003, i.e., at the time of registration of sale deed”.

Conditions and obligations to be complied with:

There could also be native laws and different statutory obligations to be complied with for completion of sale. Permission could have to be compelled to be procured from bound establishments. Any such obligations to be completed and therefore the time for such acts square measure to be incorporated within the agreement.

Expenses to be met

Sale method includes numerous expenses like fee, stamp duty, brokerage and expenses towards statutory clearances. Terms of agreement ought to be clear on who needs to meet these expenses.

Miscellaneous

The agreement ought to additionally contain penalties for non-performance of the terms of the agreement.The worry on the vendor is that he shall throughout the amount between the date of agreement to sell and actual returning of the property to the vendee, not produce any charges on the property and at constant time maintains the property.

Remedy

If any of the parties fail to perform, a celebration could sue the opposite party for execution as per the terms of the agreement. The limitation on the market is 3 years and it starts from the date on that the act is to be performed.

For example, an acquisition agreement is dated 1-7-2003, wherever it's mentioned the vendee ought to pay the ultimate installment of thought and obtain the conveyance completed by the vendor on 31-08-2003. The vendee, however, didn't pay the ultimate installment on 31-08-2003 and therefore the limitation started from the date.

The agreement to sell is to be dead on a requisite stamp paper as prescribed by the state.

Purchase of property could be a group action wherever the parties to the group action should be of identical mind to confirm swish and uncomplicated execution of the group action. The agreement to the sale contains all the terms and conditions on the premise of that the physical method of transfer of property can happen on a piecemeal basis. The agreement to sell clearly defines the duties of the customer and therefore the trafficker and therefore the tasks to be performed by every, ultimately resulting in the registration of the sale deed and therefore making certain stress free sale and buy of property.

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HOME LOAN DELINQUENCIES HALVE IN 5 YEARS: CIBIL

HOME LOAN DELINQUENCIES HALVE IN 5 YEARS: CIBIL

Credit information company Cibil has said the proportion of bad loans in the housing segment has more than halved in the past five years. The percentage of non-performing assets (NPAs) from the home loans segment has dropped to 0.57 in March 2015 compared to 1.06 at the end of 2010, a Cibil report said.

The company attributed the lower delinquencies to availability of timely credit information for lending.It can be noted that all the lenders check the history of potential borrowers with a credit information company like Cibil before taking a call on the loan proposal.The history also helps the lenders in pricing the product.

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The Cibil report said Mumbai and Pune account for most such enquiries from banks for availing the details of potential borrowers, which is followed by Delhi and Bengaluru.It said 3.9 lakh new home loan accounts were opened during January-March this year.

It can be noted that in the face of slowing demand from the corporate segment, all banks have been focusing strongly on the retail segment, and within that the high value home loans have been a favourite.Even though a longer tenure loan can result in potential asset liability mismatches, banks are interested in this stream as the segment is considered very safe because of low probability of NPAs.

On credit cards, which constitute a part of unsecured lending, the Cibil report said there was a growth in new accounts to 10.8 lakh for the January-March period, as against 8 lakh in the year-ago period.

On the asset quality in this segment, Cibil said there has been an improvement to 1.06 per cent as of March 2015 as against 3.27 per cent at the end of 2010.The financial capital leads in the credit card applications as well, followed by Delhi and Bengaluru, it said.

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