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Manish Prakash (Lawyer)     17 August 2010

Booking in Residential Projects

 

Now a days several real estate developer companies are coming up with their various residential projects in Noida and other parts of NCR. They extensively advertise their projects by various modes, distribute brouchers containing specifications, location, layout, price, payment plan etc. with the representation that the possession of the flat will be handed over within a period of 2.5 to 3 years from the date of the booking. Thereafter, they take booking amount from the Applicants and provisionally register a Flat with Number and floor in their project without showing any documents in respect of their proposed project viz; Land Title Deeds, License from the Competent Authority to undertake project, Zoning/Building Plan, Site map etc.

 

My question with respect to the above practice are as under:-

 

1)      Whether the real estate developer companies are legally allowed to take booking as such without showing any relevant documents concerning their projects?

2)      Whether they can ask for further payment after taking booking amount without taking license and getting the zoning and building plans sanctioned/approved from the Competent Authority? (It is represented by the Broker of the company that the second installment will be called only after sanction of the project)

3)      Whether the company can allot Flat No. and Floor in an unsanctioned project?

4)      When can the company legally allot a flat to the Applicant and execute an Agreement with them?

5)      Whether the Builder Buyer Agreement executed by the Company are legally enforceable document? When can they be asked for registration of Sale Deed?

6)      6)If the Company does not commence construction and ask for further payment without getting the project sanctioned and building plan approved from the Competent Authority or otherwise does not abide by its representations then what is the remedy available to the Applicant?

7)      How can the Applicant get the refund of amount paid by them in such case?      



Learning

 4 Replies

Arvind Singh (Sr. Manager-Legal & Taxation)     17 August 2010

Dear Sir,

Myself is an advocate working as legal consultant for one of the leading construction and infrastructure company. As far as the questions are concerned, my reply as follows: -

1) Every construction company has to register the land in his own name and after that company has to file the site plan with the concerned authorities and once the plan is got sanctioned then company can start taking booking amount.

2) Every company will have to show the approved and sanctioned plan, title deeds in his own name, only after that a company can take the booking amount. These documents can be available on request to the company or through broker.

3) In case company takes the booking amount and doesn't starts the construction then company is being governed by the company laws and u/s 405, 406 and 420 of IPC. There is a strict provision for these kind of companies by the competent authorities.

I think all of your queries are now solved. If anything is required to be solved, pls mail to me or ask on mobile

Arvind Singh

Advocate

advocatearvindsingh@gmail.com

9717137047

Manish Prakash (Lawyer)     18 August 2010

Dear Mr. Arvind,

Thanks for your prompt response. 

Can you please acquaint me with the laws, policies and regulations etc. with regard to the basis of your reply. It is true that every real estate developer has to register the land in his name before launching a project. However, most of the developer are taking booking amount without getting the site plan sanctioned and in some cases even without taking license from the competent authorities.

I would highly appreciate if you could give parawise reply to my above queries and acquaint me with the laws, policies and regulations in respect of procedure to be followed by real estate developers while launching and carrying out a residential project.

Warm Regards

M. Prakash 

   

   

krantiveer (Advocate)     18 August 2010

Verification all the title documents the POA, the Developent Agreements, title papers etc, are to be disclosed by the builder/developer along with sanctioned plans etc, but it is your duty to go thru them and take lawyers advice before booking, legal actions are always open to you if you are cheated. Prevention is better than cure.
 

bhagwat patil (Property due diligence 9422773303)     19 August 2010

It the buyer who has check the legal status of builder while signing the contract.In practice the buyers r least bothered about legal status. the issues highlighted like aminities , kithchen floorings,wordrobs,etc.you have raised an imp. issue for we have to educate the custmers.


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