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Purchase of flat in building constructed on gaothan/gharpatti plot (Property Law)

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This query is : Resolved


Author : Najmul Huda

Posted On 05 January 2012 at 08:46

Dear Sir/Mam, I have booked a 3 BHK flat in a multistory under construction building by UNI Constructions "PALM RESIDENCY" at Koliwada, Sector 16, Nerul (West) Navi Mumbai. The builder/developer is advertising the construction to be on gaothan plot and has clearly told that no nationalised bank will sanction loan for this flat but he will arrange the loan from cooperative society at .25% heigher than market rate to which I have agreed and have already paid a sum of Rs 2,00,000/= as booking amount on 25 Dec 11. Now I came to know that if the constructoin doesn't qualify for loan from a nationalised bank there seems to be problem of title. However, the builder says that it belongs to a farmer and he is developing it for him at 50-50 share basis means ownership of half the flats in building will be that of builder and remaining 50% to the builder. In such a situation what are the complications I am likely to face as occupant/owner of one flat? and how can I avoid them. Please treat me as having almost nill knowledge about the subject and advise. Regards




Expert : ajay sethi

Posted On 05 January 2012 at 15:02

ask the builder to refund your money . the fact that no nationalised bank would touch the project should have warned you not to buy flat in said property .

even if he refunds moeny after making some deductions grab it . always buy property with clean title .

consult a local lawyer .



Expert : raj kumar makkad

Posted On 06 January 2012 at 00:52

There is a recent trend that the plots allotted by CIDCO to the project Affeted Persons under 12.5% Gaothan Scheme (GES) are transferred on the payment of the prescribed transfer charges to the third parties and these Transferees are mostly Builders or Developers and also Housing Co-Operative Socieites.

It is usually argued on the basis of a mistaken belief that after the transfer of such plots by way of Tripatite Agreements, a Transfere aquires clear, legal and marketable title with the authority to sell or transfer the Flats, Offices, Shops, referred to herein as the Unit to the prospective purchasers.

I have opined that when such allottees have formed a Co-Operative Housing Society, the Purchaser of a Unit in such a Project will have a legal and valid title on the approval of his membership by CIDCO to the Society on payment of transfer charges.
But in case of transfer of such plots to the Transferees, other than the Co-Operative Housing Societies, any further transfer or sale of a Unit in such a Property would need CIDCO approval on payment of transfer charges. It would to pertinent to reproduce the relevant clause appearing in such Tripartite.
Agreements executed amongst CIDCO, original Licencees and the new Licencee, which is as under :-

“The new Licence shall be substituted for the original Licencee in the said said Agreement and shall have all the rights, obligations, liabilities, benefits and equities accordingly thereunder”.

In fact in the case of transfer of such Plots to the Transferee, other than the Co-Operative Housing Societies, there is a change in the name of the allottee, but the category of the plot remains the same, with the restrictive condition that no further transfer or assignment is valid without the approval of CIDCO. On the transfer of such plots by way of even Tripartite Agreement, these plots do not become TENDER PLOTS, wherein an Allottee i.e. A Builder or a Developer is permitted by CIDCO to sell the Flats, Offices etc, and obtain a direct lease in favour of a Society or a Company or an Association or Purchasers, as the case may be, and in all other types of transfer or sale of the Flats in the Properties, CIDCO approval, on payment of transfer charges, is essential. It has to be kept in view that the plots in Navi Mumbai are not free-hold, but on leasehold basisi from CIDCO and the terms and coditions of the allotment of such plots and the Lease Deeds have to be complied with to acquire a valid legal title and to avoid the possibility of re-entry or cancellation or allotment by the Lessor on the ground of breach of such condition.

Therefore, in case of purchase of Unit in a Property constructed on a plot allotted under 12.5% GES to a Transferes, other than Co-Operative Housing Society, who may be builder or a Developer, the Purchaser will have the legal valid title only on receipt or Transfer NOC from CIDCO on payment transfer charges and as pointed out earlier, such approval is available from CIDCO only on the completion of the construction, issuance of Occupancy Certificate and execution of the Lease Deed, because till the execution of the Lease Deed, a Allottee or a Transferee has the licence only by way of an Agreement to Lease to take possession of the plot and to raise the construction thereon and it is, specifically, mentioned therein that the Agreement to Lease shall not be deemed as a demise in law in favor of an Allottee so as to the Licencee any legal interest therein until the Lease, as provided therin, execute.

In the ultimate analysis, a clear, legal and valid title is available to a Purchaser of Unit in such properties in the following cases :-

a. In a case of resale with the approval of CIDCO on payment of transfer charges.

b. In a case where a Co-Operative Housing Society has been formed and the membership of the purchaser to the Society has been approved by CIDCO on payment of transfer charges.

Only in these cases in finance is required to purchase a Unit, Mortgage NOC will be available from CIDCO in favor of the lending institution. Neverthless, an Allottee or a Transferee himself will have a valid legal title and the Mortgage NOC will be available from CIDCO, is such Allottee on the Transferee of such Plots needs finance from a financial institution to put up the construction thereon.



Expert : prabhakar singh

Posted On 06 January 2012 at 09:59

An useful and valuable information from Mr. raj kumar makkad.


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