Unregistered development agreement and partition of flats.
Annu
(Querist) 28 September 2014
This query is : Resolved
Respected Lawyers,
i want to know whether developer can sell his share of flats independently as mentioned in developere agreement as landowner has already sold out his share without obtaining developers signatures.?
both developer agreement and partition deed are notorised ,but not registered and the project is complete.?
Adv Akhtar Ali Sheikh
(Expert) 29 September 2014
What is your problem and the question/s? Agreements involving real estate must be registered. If development agreement allows the landlord can sell it.
Rajendra K Goyal
(Expert) 29 September 2014
The terms of agreement need to be referred.
Annu
(Querist) 29 September 2014
Sir the terms of agreement grants autonomous and exclusive rights to both landowner and developer to sell respective share independently.
Landowner has sold his share alone.
Annu
(Querist) 29 September 2014
Only thing is that the agreement is unregistered.
Annu
(Querist) 30 September 2014
Sir what about signing deed of Assignment in this case..what are its demerits?
T. Kalaiselvan, Advocate
(Expert) 04 October 2014
What is the deed of assignment doing here?, If you want to buy the property through the builder's unregistered agreement, you may consult a local lawyer, take is opinion and then proceed.
Annu
(Querist) 04 October 2014
Actually someone wanted to buy developer share of flats through deed of assignment. But we insisted only on selling them through registered sale deed as we don't know intents behind deed of assignment?
T. Kalaiselvan, Advocate
(Expert) 04 October 2014
@Anuu: You are absolutely right that deed of assignment will not convey the permanent title to the purchaser, only a registered sale deed will convey the property to him and the title to the property will lie on him. So donot run a risk by adopting cheap measures to avoid stamp duty which may create bigger problems in the future.
Anirudh
(Expert) 04 October 2014
Dear Annu,
First and foremost clarify, whether you are the land owner or developer or buyer.
Annu
(Querist) 04 October 2014
Sir my old uncle is developer on papers.
Annu
(Querist) 04 October 2014
Sir I feel we should sell it by registered sale deed only as my uncle won't b knowing much about deed of assignment?
Anirudh
(Expert) 04 October 2014
Dear Annu,
You are talking things without really knowing the legality.
If your uncle is only a developer, towards consideration of the construction undertaken by him, the land owner might have agreed to give certain portion of the undivided land to him.
Therefore after the complete construction has taken place, to the extent the land owner has got his share i.e. the built up portion (say Flats) he is not only the owner of the land underneath, but also the flats. Therefore, he can make a sale deed without obtaining the consent / signature of the developer.
As far as the developer is concerned, unless the undivided land had been transferred by the land owner in favour of the developer, the developer does not own the land. But the developer only owns the constructed portion which falls to his share. Therefore, whenever, the developer wants to sell the flat to a prospective buyer, the land owner has to convey the undivided share in the land underneath, while the developed has to convey the constructed portion.
There is no big difference between assignment and conveyance - both mean the same thing. But generally the term 'assignment' is used in relation to 'assignment' of trade mark, copyright, patent rights, contracts etc. The term conveyance is associated with the immovable properties.
Annu
(Querist) 05 October 2014
Anirudh sir thanks for or valuable reply.sir the development agreement has a clause wherein both land underneath and constructed areas would b shared 50:50.among developer and land owner.?
Can developer now sell his share?
Annu
(Querist) 05 October 2014
The clause says :that both land underneath and constructed area would be shared 50:50.
The developer will get 50%share of land underneath and in constructed portiin in return of his invested money and labour ,whereas landowner will retain 50% land and will get 50%share in constructed area in lieu of his land.
Nutshell..both land underneath and constructed area shall be shared on 50:50 basis amongst landowner and developer.
Anirudh
(Expert) 05 October 2014
I have understood the clause. The fact remains, the immovable property i.e. land in this case cannot be transferred to the developer otherwise than by way of transfer/conveyance deed. Till such time, the developer does not become the owner of the underneath land. Therefore, independently, the developer cannot legally transfer the underneath portion of the land to the prospective buyer. Therefore, as and when the developer executes a sale deed in favour of the prospective buyer, the sale deed has to be properly drafted wherein it should come out clearly that the land owner is conveying the undivided portion of the land to the prospective buyer directly, while the developer is conveying the built up portion. BOTH THE OWNER OF THE LAND AND THE DEVELOPER HAVE TO EXECUTE THE SALE DEED FROM THE SIDE OF THE VENDOR for perfecting the title of the prospective buyer.
Annu
(Querist) 05 October 2014
Anirudh sir u r very correct in ur conclusion but the landowner has sold his share with his sole signature and so now he is forcing us to sell our share independently.
He is reluctant that he all not sign our sale deeds.
Anirudh
(Expert) 05 October 2014
Then ask him to first transfer by sale deed undivided share in the land underneath in favour of the developer. Otherwise the developer has no right to transfer the land further. In any case, since he has not already transferred the land to the developer, at the instance and request of the developer, the land owner has to transfer the undivided share in the land directly to the nominee of the developer (i.e. the purchaser). If that fellow does not understand and agree to this procedure, then at least get a Special Power of Attorney in favour of the developer to transfer the undivided share in the land to the prospective buyers on behalf of the Land owner.
Annu
(Querist) 05 October 2014
Sir the landowner is an irritant..
He is harassing us whenever we demand his signatures.
Sir I m sure if I make a sale deed to a purchaser then he won't challenge it.
If I find a purchaser I m planning to sell out my share as much as possible?that's the only option I can see?
Anirudh
(Expert) 05 October 2014
In that case, you have to put things adequately in the recital that the land owner has given 50% of the undivided share in the land in the entire building to the developer and as such the developer is fully empowered and competent to execute the present sale deed....
Annu
(Querist) 05 October 2014
Anirudh sir..
Literally tear fell from my eye..
U have helped and advised me unconditionally..
I have to work out a way as my uncle needs it.
U have shown me way..
Sir Do elaborate important points as we will be doing it with only developer sign.?
Annu
(Querist) 05 October 2014
Anirudh sir I am ready to pay your consultation fee but plz do advice me.
