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Legal Checklist to buy a property from a builder

Legal Checklist to buy a property from a builder

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Builder Builder Presentation Transcript

  • BUYING AND SELLING OF PROPERTY APURVA AGRAWAL ROTARY CLUB OF BOMBAY WORLI MAY 19, 2007
  • WHAT IS A CHEQUE?
    • The title of the property should be clear,
    • marketable and free from encumbrances
    • All dues on the property should have
    • been paid
    • Always use the services of a competent
    • Advocate for verifying the title of
    • Property
    TITLE
  • INSPECTION OF DOCUMENTS
    • Builders liability produce the following documents which shall be part of the Agreement of Sale
      • Approved plans/specification
      • Commencement certificate
      • I.O.D.
      • Occupation Certificate
      • Building Completion Certificate
      • Title Certificate
    View slide
    • Book or Buy your flats only when Builder
    • has obtained BMC permission’s like I.O.D. ,
    • sanction of plans and commencement
    • certificate from the Concerned Authorities
    BOOKING / BUYING OF FLAT View slide
  • CONSTRUCTION OF BUILDING
    • Flat purchaser should check that the
    • construction is according to the sanctioned
    • plans and specification granted by
    • Concerned Authorities.
    • The Builder must ensure good quality
    • materials and proper workmanship
  • AGREEMENT FOR SALE
    • Upon receipt of the any payment exceeding
    • 20% of the sale price of the flat, the Builder
    • has to execute the Agreement for Sale
    • Carpet area of the flats should be clearly
    • and unambiguously defined in the
    • agreement of sale
    • The nature, extent and description of all
    • AMENITIES and common facilities to be
    • clearly mentioned in the Agreement
  • PAYMENT SCHEDULE
    • PAYMENT SCHEDULE should be according
    • to the progress of the work, under the
    • provisions of the MOFA, 1963 / MAOA ,1970
    • The Builder should not enhance (Escalation)
    • the price of flats on any account whatsoever
    • once the agreement for sale is executed
    • except for additional government
    • levies/taxes/court orders
  • DETAILS OF FLAT PURCHASERS
    • The Developer must prepare and maintain
    • details of other flats purchaser like their
    • names, flat numbers, addresses, price
    • charged etc.
  • STAMP DUTY
    • Stamp Duty is payable on the higher of the
    • market value of the property or on
    • consideration paid under the agreement
    • Document has to be adjudicated before
    • stamping
    • The rate of stamp duty payable is 5%
    • The stamp duty has to be paid before signing
    • or executing the document i.e. Agreement for
    • Sale
    • Agreement for Sale has to be registered with
    • the Sub-registrar of Assurances on whose
    • jurisdiction the property is located
    • Registration should be completed within four
    • months from the date of execution of the
    • Agreement for Sale
    • The present registration fee is 1% of the
    • market value of the property or the
    • consideration whichever is higher subject to a
    • maximum limit of Rs. 30,000/-
    REGISTRATION
  • CHANGE IN PLAN / SPECIFICATION
    • All conditions with regard to infrastructures
    • should be approved by Municipal authority /
    • Planning authority and fully complied with
    • the same
    • No alteration, additions or deviations in the
    • plan and specifications of the buildings
    • without the consent of the Flat Purchaser
    • once the same is furnished and disclosed to
    • the Flat Purchaser
  • DELAYED COMPLETION OF BUILDING
    • In case of delayed completion beyond the
    • period stipulated under the 'Agreement for
    • Sale’
      • Demand for refunding the amount received
      • by the Builder / Developer with interest @ 9
      • % p.a. or as specified in the agreement
    • OR
    • (b) Wait for completion and get the possession
    • of the flat
    • The Builder should specify in writing the date
    • on which the possession of flat is to be
    • handed over to the Flat Purchaser and
    • ensure timely possession
    • The Builder should obtain completion and
    • occupation certificate prior to giving
    • possession of the flat to the Flat Purchaser
    POSSESSION
  • DEFECTIVE CONSTRUCTION
    • The Builder should attend to all bonafide
    • complaints of defects expeditiously
    • The defect liability period of the Builder is
    • three years from date of completion of the
    • building
    • If the Builder fails to rectify the defect in the
    • building, the Flat Purchaser has a right to
    • receive reasonable compensation
  • ACCOUNT OF PAYMENTS
    • The Builder should maintain
      • (a) separate account in respect of sums received for purposes such as the capital
      • for promotion of the society, towards the
      • maintenance till the society is formed, etc
      • (b) the same should be utilize only for those purposes for which it was collected
  • SOCIETY FORMATION
    • The Builder has to form the society
    • Builder should submit an application to the
    • Registrar within four months after atleast ten
    • persons or 60% of total flat is sold or have
    • taken possession of the flats
    • It is the duty of the Builder to cause the
    • conveyance of the title and interest in the land
    • and the building to the society.
  • REMEDIES
    • The remedies available to the Flat Purchaser
    • against Builder are the following:
      • A complaint in Consumer Forum as
      • deficiency of services under Consumer
      • Protection Act 1986
      • (b) Suit for specific performance under
      • Specific Relief Act, 1963 and Indian
      • Contract Act,1872
      • (c) Criminal complaint under the Maharashtra
      • Ownership of Flats Act , 1963
  • PENALTIES
    • The penalties that maybe imposed on the Builder are as under:
      • CONSUMER PROTECTION ACT:
    • (a) remove the defects complained of ; OR
    • (b) return the price to Flat purchaser ; OR
    • (c) pay compensation if any injury is suffered
    • by the Flat Purchaser ; OR
    • (d) provide for adequate costs
  • PENALTIES …Contd SPECIFIC RELIEF ACT AND INDIAN CONTRACT ACT (a) The Flat Purchaser can get the specific performance of the breach under the Agreement for Sale OR (b) Adequate Compensation
  • PENALTIES …Contd
    • MAHARASHTRA OWNERSHIP OF FLATS ACT , 1963
      • Contravention of Sec. 3,4,5,10 or 11, leads to punishment for maximum imprisonment of 3 years or with fine or with both
    • (b) Contravention of Sec 5, leads to imprisonment for a term which may extend to
    • 5 years or with fine or with both
    • (c) Contravention of any other provisions, on conviction, may be imprisoned for a term
    • which may extend to 1 year or with fine or with both
  • THANK YOU
  • CONTACT US
    • UNIVERSAL LEGAL
    • 5th Floor, Kimatrai Building
    • 77/79 Maharshi Karve Road
    • Mumbai – 400 002
    • Phone : 2203 4293 - 95
    • Fax : 2203 9845
    • E-mail: [email_address]