Summary: Conveyance refers to the legal transfer of land and building ownership from the developer to the housing society. As per Section 11 of the Maharashtra Ownership Flats Act (MOFA), 1963, developers must execute conveyance within four months of society registration. Without conveyance, societies lack complete ownership, limiting redevelopment rights and exposing them to risks like unauthorized sales or mortgages by builders. Deemed conveyance applies when developers fail to transfer ownership, allowing societies to seek legal intervention through the District Deputy Registrar. The Real Estate (Regulation and Development) Act (RERA), 2016, mandates promoters to execute registered conveyance deeds within three months of the occupancy certificate and hand over essential documents within 30 days. Conveyance provides legal ownership, enables redevelopment, and secures financial benefits like loans. Without it, societies risk losing land rights, facing legal complications, and incurring high costs for conveyance later. In redevelopment, land ownership remains with the housing society, managing the project and distributing new units. However, deemed conveyance may not always grant unrestricted land usage, and builders can legally challenge it.
Introduction: In the newly constructed buildings, the builder / developer provide for forming a housing co-operative society to which they shall transfer their interest in the property. Then the builders form the society but do not transfer the title of the property (read ownership) to the flat-owners or the society till he has transferred all the rights in the building/Societies/apartments. Thus, the builders /promoters are benefiting from the buyers lack of awareness and information.
CONVEYANCE AND ITS SIGNIFICANCE
Conveyance is transferring the title of land and building by promoter /landowner in favour of housing society by execution of Conveyance Deed. As per the provision contemplated in Section 11 of Maharashtra Ownership Flat Act 1963, Conveyance is the right of Co-operative Housing Society and the Duty of the property Developer/ Promoter to be executed within 4 months from date of Registration of Co-Operative Society.
After land and Building is conveyed in favour of Co-Operative Society and the title of property is fully and finally recorded in the property card and other revenue records post which only the property becomes completely free and marketable.
Under Section 11(3) of the Maharashtra Ownership Flats Act, 1963 (MOFA), Gujarat Ownership Flats Act, 1973 (GOFA) and Karnatak Ownership of Flats Acts, 1972 the Promoters are required to take all necessary steps to complete his title and convey to the organisation of persons, who take flats, which is registered either as a cooperative society or an association of flat-takers his right, title and interest in the land and building.
MEANING OF DEEMED CONVEYANCE:
Deemed Conveyance occurs when the builder or landowner does not cooperate in transferring conveyance to the Co-operative Society, primarily implemented under the Maharashtra Ownership Flats Act (MOFA) to protect flat owners from problematic developers In such cases, the housing society must present their case before the District Deputy Registrar, who will after hearing both parties issue the necessary order of Conveyance.
ADVANTAGES OF CONVEYANCE:
1. Getting a proper and legal title in the name of the Society.
2. Retaining the additional FSI as per the Government announcements.
3. Property will be free and marketable.
4. Society can raise the loans for repairs and reconstruction by mortgage.
5. Permission from planning authorities is possible if the building must be reconstructed later. Society can take the benefit of TDR.
6. Members can receive compensation from Builder on redevelopment of the building.
DISADVANTAGES OF NOT HAVING CONVEYANCE DEED
Even though you have purchased ownership flat, you are not the owner of the land and building. Therefore, you cannot reconstruct the building without the permission of the Builder / Landowner.
1. The Builder/Landowner may mortgage the property purchased by you as he is the legal owner and holding the Title Deeds of the Property.
2. The Builder/Landowner may tap the benefits in case the building is later taken up for redevelopment or if the plot has some unutilized FSI.
3. The Builder / Landowner may make profit by sale of open spaces, gardens, terrace, parking space belonging to the Society.
4. The Builder / Landowner may demand a huge amount from the Society, if Conveyance is sought by the Society after a lapse of many years.
5. The Builder / Landowner may sell the entire Development Rights and the Legal Rights on the land to third party and create a third-party interest in the Property and the Society will have to incur a huge amount to clear the same.
RERA provisions: Section 17 of the RERA Act, 2016 lays down the responsibility on the promoter to execute a registered conveyance deed in Favor of the allottee along with the undivided proportionate title in the common areas to the association of the allottees within 3 months from the date of issue of occupancy certificate.
Further, after obtaining the occupancy certificate and handing over physical possession to the allottees, it shall be the responsibility of the promoter to handover the necessary documents and plans, including common areas, to the association of the allottees or the competent authority within 30 days after obtaining the occupancy certificate.
Redevelopment Projects
In a redevelopment project, “conveyance” refers to the legal transfer of ownership of the land from the original landowners to the newly formed housing society, meaning the existing landowners essentially “convey” their land title to the society which then manages the redevelopment process and distributes new units to the original owners and any new buyers; while the new owners receive their individual flats within the redeveloped building, the land ownership technically remains with the housing society, not the individual flat owners.
*Note: Deemed conveyance is a legal provision and provides a valid title, it might not always grant complete ownership rights, especially regarding common areas or land usage restrictions. In some cases, the builder/ Landowner might challenge the validity of a deemed conveyance order through legal proceedings. Depending on the jurisdiction, there may be limitations on what the society can do with the land under a deemed conveyance, especially when it comes to selling or further developing the property.
*****
The author CA. Prashant Poojari who is a specializes in RERA advisory, and litigations and he can be reached at RERAQuest@Outlook.com
Author Bio
