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Tuesday, Oct 15, 2019

Housing societies still find it difficult to get land ownership

It’s been 2 years since policy reforms made transfer of land ownership from developers to housing societies easier. The impact, however, is negligible.

real-estate Updated: Sep 21, 2019 20:00 IST
Janaki Krishnamoorthi
Janaki Krishnamoorthi
Hindustan Times
A Conveyance Deed transfers land ownership from the developer or previous land holder to the cooperative housing society. However, many CHS in Mumbai haven’t applied for it.
A Conveyance Deed transfers land ownership from the developer or previous land holder to the cooperative housing society. However, many CHS in Mumbai haven’t applied for it.(Pramod Thakur/HT Photo)
         

It’s been nearly two years since the Maharashtra government relaxed the rules on deemed conveyance, allowing cooperative housing societies to apply for DC, even in the absence of an Occupancy Certificate.

The government introduced Deemed Conveyance (DC) in 2008 and published the rules in 2010. Under this provision, a society without conveyance could apply to the Deputy District Registrar (DDR) of Co-operative Societies, who after verifying the documents submitted and hearing both the society and the developer will, if justified, pass an order conveying the land in favour of the CHS. In 2017, the government relaxed the rule on the need to submit an Occupancy Certificate. However this relaxation has had little impact on the number of applications, which continues to be low.

“This is because all other conditions remain the same, and this includes approaching four different departments to complete the process. Hence it still takes one to two years for a CHS to secure deemed conveyance. Failing to understand the complexities involved, CHS office-bearers often stop the process midway,” says Ramesh Prabhu, chairman of the Maharashtra Societies Welfare Association (MSWA).

WHY IT MATTERS

A Conveyance Deed transfers land ownership from the developer or previous land holder to the cooperative housing society, giving the latter the right to use any notional floor space left over after construction, or any additional floor space, directly or via Transfer of Development Rights. It also allows the CHS to raise loans for repairs by mortgaging the property and to have a say in redeveloping the building. In the absence of a conveyance deed, these rights rest with the developer or landowner.

To prevent potential misuse of such rights, the government introduced Deemed Conveyance. But according to Prabhu, against pending conveyance of around 60,000 societies across Maharashtra, only about 6,000 have applied for DC.

Pankaj Jebale, DDR for cooperative societies, Mumbai (3), attributes the lukewarm response to a lack of awareness. “Primarily, societies are unaware of the importance of conveyance. Second, they do not have the required documents. Nor do they understand the process to be followed. There is a misconception that it is a lengthy and expensive process, which it is not,” he adds.

TRUTH OR DARE

While the process followed by DDRs may be as simple and inexpensive as Jebale says, it is the pre- and post- paperwork that takes up time and effort. The CHS has to collect 20-odd documents just to apply.

“After a favourable order from the DDR, the conveyance deed is executed. The society then has to approach the Collector of Stamps and pay the stamp duty, then meet the sub-registrar and get the conveyance deed registered,” says advocate Vinod Sampat, president of the Co-operative Societies Residents Users and Welfare Association. “Thereafter one has to apply to the city survey office to get the property card transferred in the society’s name. Even at this stage, issues can crop up. If there are differences in the area mentioned in the approved plan and in the document lodged for registration, the CHS will have to execute a deed of rectification. And if the builder challenges the DC order in courts, it will prolong the case further. All this costs money,” Sampat says

“Primarily, societies are unaware of the importance of conveyance deeds,” said Pankaj Jebale, DDR for cooperative societies, Mumbai, who attributes the lukewarm response to a lack of awareness.
“Primarily, societies are unaware of the importance of conveyance deeds,” said Pankaj Jebale, DDR for cooperative societies, Mumbai, who attributes the lukewarm response to a lack of awareness. ( Samson Tupdal/HT Photo )

OUTSOURCING

Consultants and advocates dealing with housing society issues can help ease the process for the CHS, but that will add to the cost. “So far, we have spent around Rs 40,000 per member, including consultant’s fee, despite all members having paid stamp duty. We have no idea how much more we will have to spend till we enter our society’s name in the Property Card,” says PK Mutha, treasurer at New Garden View CHS in Andheri, which secured a DC order six months ago.

For Pearl Heaven CHS Vikhroli, the costs increased after the builder appealed against the DC order. “We applied for DC in May 2011, secured the DC order in December. However, the builder appealed against the order in court,” says Francina D’Souza, chairperson of the society. “Though the court finally ruled in our favour, and the society’s name was entered in the Property Card in 2013, we had by then spent over Rs 12 lakh on the entire process, spread across 55 flats.”

Checklist before applying for deemed conveyance
  • Pass a resolution about DC in the housing society’s general body meeting
  • Secure society registration certificate copy
  • A list of all registered flat owners
  • Approved copy of layout
  • Commencement and completion certificate
  • Occupation Certificate (exempted if unavailable)
  • Property card extract
  • Non-agriculture land certificate
  • Sale deed of each flat owner
  • Proof of stamp duty payment and registration of each flat owner
  • Copy of legal notice sent to landlord / developer to execute conveyance deed
  • If there is more than one society on the plot, details of proportionate area and ground coverage of your housing society’s building should be furnished
  • You can then apply for Deemed Conveyance in the prescribed form, affixing a court fee stamp of Rs 2,000

The best way forward, say realty consultants, is to simplify the process, reduce the number of documents to be submitted, and aim for a single-window clearance system.

Since, by law, the developer is required to convey the land to the CHS within four months of the housing society being formed, some argue that the DC should be granted automatically after verifying the society’s registration details, instead of making the society run around for it. A builder with any grievances in the matter could then apply for the process to be reviewed within a specific period.

First Published: Sep 21, 2019 20:00 IST

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