Registration of a flat by builder in self name
Bharat kumar
(Querist) 18 April 2014
This query is : Resolved
Dear Sirs, I am submittting my Querry:-
Note on Ownership of land in case of Group Housing:-
Land Area :- 2 acres
No of Flats :- 26
Land Owner :- AB Ltd
Flat Owners :- A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T (20 nos)
1. AB is owner of Land admeasuring 2 acres. It has proposed to build a residential group housing complex over the land.
2. AB builds the complex comprising of 26 Flats.
3. AB sold 20 Flats to Individual buyers kept the remaining six Flats with itself.
4. AB has to sell the built-up Flats along with the proportionate right on the Land of the complex i.e. on 2 acres (less the common areas as they will always be in common ownership amongst the Flat owners) divided amongst 26 Flats equally.
5. Once flats are built over this Land, the Land loses its character (of Single Ownership) and the land owner has to share the ownership of the land with the Flat buyers.
6. Once the Flats and proportionate Land is sold to the buyers, the buyers has to get it registered (through Registered conveyance deed) in his/ her favor by paying the appropriate Stamp Duty to the State Government to claim a perfect, valid and legal title to the Flat.
7. In case of not getting the conveyance deed, the buyer does not have a valid title and is also in default of the Registration Act 1908, as this document is compulsorily Registrable.
8. Once 20 Flat owners get the conveyance deed registered, and since AB has kept 6 Flats with itself, AB also needs to get the conveyance deed for the Flats to obtain a perfect legal title of the Flats.
9. If AB does not get the conveyance deed, it is in default of the Registration Act by avoiding to pay the Stamp Duty to the State Government.
Kindly give your opinion on the above issue along with the law point as huge Govt Revenue is being snached by these builders through improper doings.
P. Venu
(Expert) 19 April 2014
The answer, at least in part, depends upon the laws in force the State. Where is the property situated?
malipeddi jaggarao
(Expert) 19 April 2014
What is improper? Out of them own 2 acres land they build 26 flats and alienated the share in the land and they kept the remaining flats with them keeping the balance of land. In what way you are connected with the query?
Anirudh
(Expert) 19 April 2014
Dear Mr. Bharat Kumar,
You will get the answer to your query, provided you answer the following query:
I am the land owner. I build an house. Am I to get the house registered by paying stamp duty to have proper title to the house?
Rajendra K Goyal
(Expert) 19 April 2014
Consult a local lawyer and show him all related documents.
Anirudh
(Expert) 19 April 2014
Dear Mr. Rajendra,
Please indicate, assuming the property to be located in Haryana (more specifically Gurgaon), what would be your answer to the query, being a local lawyer in Gurgaon?
ajay sethi
(Expert) 19 April 2014
answer queries raised by MR anirudh
Bharat kumar
(Querist) 19 April 2014
Dear Sir,
The land is situated in Jharkhand State at Ranchi. And I am one of the Flat owner. But this has little connection with the case. My plea is the large amount of Govt Revenue is being stolen by these builders.
I want to know as whether or not the builders has to get their Flat registered or not?
Jharkhand Apartment Act 2011 is silent on such issues.
Kindly give your answer along with the law point.
Anirudh
(Expert) 19 April 2014
Dear Mr.Bharat Kumar,
You have not answered my query.
Bharat kumar
(Querist) 19 April 2014
Dear Sir,
I confirm that I am not the land owner. I have seen such sort of gross irregularities happening.So I have raised this query. You people are Learned Layers and can give your opinion with law point.
Thanks sirs,
Bharat Kumar
R.V.RAO
(Expert) 19 April 2014
there are normally cost considerations and commercial reasons behind the actions of business people including realtors.
if the builder registers a flat today ,he has to shell down stamp duty,flat regn. expenses,vat etc...which add to cost of the flat in case of a resale by him in future. his profit margin comes down .
so the builder may be planning to let a new buyer come who will buy the flat and incur regn,exp.duties etc.. on registration of the flat in his name.
why now incur avoidable exp. .it is double the cost.
about your concern for revenue,remember who ever wants to own the property in their name, through registration, they will certainly make the govt. rich by paying regn.expenses etc..
Bharat kumar
(Querist) 19 April 2014
R/Sirs,
This is not the case. Builder has demolished their old house and started living in the new so built Flats. He has registered those Flats in their name in Municipal corp'n also and paying the municipal Tax also. They have become the member of the society.
Kindly give me your lawful opinion so that they may not steal Govt Revenue.
BK
ABDUL RAZIQUE
(Expert) 19 April 2014
How the builder stole govt revenue if he registered the flat?
Anirudh
(Expert) 19 April 2014
Dear Mr. Bharat Kumar,
From the given facts I can say that the builder has not done anything wrong. He is not liable to pay the stamp duty nor is he required to get the flats registered. Therefore there is no loss of revenue to the Government as you think.
Anirudh
(Expert) 19 April 2014
Dear Mr. R.V.Rao,
I am not in agreement with your explanation as to why the builder has not registered the flat in his name by paying stamp duty.
The answer lies in the fact that there is no requirement in law for such a registration and payment of stamp duty.
That's why I gave the example of a person owning a land (which no doubt he might have purchased after paying stamp duty) and then constructing a building thereon. That person is not required to get the building registered with the Sub-Registrar's office by paying stamp duty. (Like wise, the land owner, having constructed several flats, is retaining some himself, which does not require registration).
T. Kalaiselvan, Advocate
(Expert) 20 April 2014
I agree with the opinion of expert Mr.Anirudh on the subject. The author is not trying to understand what Mr. Anirudh is explaining him, instead raises the same query without even ascertaining the reply. In my opinion too, the owner need not register his own house on his own name for the second time.
Bharat kumar
(Querist) 20 April 2014
Respected Sirs,
When a flat is registered,govt collects two types of fees; one fee for registration of proportionate area of Land(approx 10%) and balance 90% revenue being the Stamp duty and Court fee for the Flat, being the major one.
Builder got the map approved and developed the project on the land for selling purpose only. 20 Flats sold and got registered by conveyance deed,paying approx Rs 1.5 lacs per flat and govt got approx 30 lacs of Stamp duty & fee. Six Flats not registered, on which only small amount of revenue; viz only for regn cost for land has been paid by builder at the time of purchase of Land.
Now if he does not get the 6 Flats registered in his name, Govt is losing approx 1.25 Lacs* 6= Rs 7.5 Lacs of Stamp duty on 6 Flats from one project. There are hundreds of projects running in which such might be the case and a huge amount of Govt Revenue is being stolen.
Kindly guide me with the available law point to stop this theft of stamp duty sir.
Anirudh
(Expert) 20 April 2014
Dear Bharat Kumar,
You are simply arguing without understanding the legal position.
I asked you a very simple question that is: If you own a land and if you build an house on the same - are you required to pay stamp duty and register the house in your own name?
The answer would be NO.
Similarly, if the builder has got 6 flats built on his own land and keeps it with him, he is not required to pay any stamp duty and register it.
But, as and when the said flat(s) is/are sold by him, the buyer will definitely have to get the said flat registered in his name by paying the applicable stamp duty. Till such time, the builder who keeps with him the 6 flats need not pay any stamp duty.
Therefore whatever loss of revenue to the Govt. which you are talking about has no meaning and it was not the requirement of law. Therefore, please do not unnecessarily keep on arguing on a point which is not existing (except in your mind).
P. Venu
(Expert) 20 April 2014
More than anything, the query raises the larger question whether the title to property is an issue involving document(s) or one of fact(s). Unfortunately, it is the prevailing notion, even among legal professionals, that every dispute as to title needs to be proved through documents.
Guest
(Expert) 20 April 2014
Normally the Builders will be the Land owners or P.O.A of the Land.They would register the Land in Proportion to the number of flats/house which they would construct to the buyers as undivided share.Then they would enter in to building/construction agreement with buyers and after construction they would issue handing over document.If they going to sell the flat which is already constructed it would attract stamp duty for built up area of flat as well as undivided share of land.It is the normal and Legal procedure which is accepted.Nothing out of way in this.In your case since the builder him self is the owner of undivided share of land also unless and until he sells the 6 flat which he owns presently to some body else No Registration is required.I think you have some dispute or misunderstanding with builder.If so check the building approved plan definitely there would be some variation Confirm the same and consult a Local Lawyer and proceed further
T. Kalaiselvan, Advocate
(Expert) 20 April 2014
I think the experts further opinions would have answered all the doubts in the mind of the author by now?
R.V.RAO
(Expert) 20 April 2014
realtors' practices are awful in some metros.they don't even register the land in their name/project name even when many flats are complete and ready for sale.
they simply sell flats, make the money,complete the flat regn. for buyers,when both builder's representative and land owner's rep. are signing on regn.documents.
sometimes,simply on the strength of poa of land owner,builder's rep. signs regn.documents along with flat buyer .
sro not only accepting such regns. ,they even come down to builders offices to complete such registrations.
why land is not registered in builder name or project name is high stamp duty and registration cost of land .
issue here is if there is a future dispute between builder and land owner and land is not ultimately regd.in the name of the project or builder and if land owner backs out,how to safe guard flat buyer's interest?
though the apex court observed that immovable property cannot be transferred by poa, there is neither awareness not compliance for such observations.
is there any case for LCI to help the poor property buyers?
T. Kalaiselvan, Advocate
(Expert) 20 April 2014
Mr. Rao, the author's query is about revenue loss to the government and not of any individual sufferer or victim in the hands of builder or land owner. What you say is abundantly prevalent, but so far the corrupt authorities do not change or reform, it will not possible to curb the menace of such corrupt practices.
malipeddi jaggarao
(Expert) 21 April 2014
I fully agree with Mr.Anirudh that there is no loss of revenue to Government in the given case and author should harp on to get a reply of his choice.
Anirudh
(Expert) 21 April 2014
Dear Mr. Kalaiselvan,
The first point is there is nothing wrong in the land-owning builder who retains the flat with himself not getting registration of the flat(s) and not paying stamp duty. There is no requirement for him to pay any stamp duty.
Therefore, the question of any corrupt practice, as far as this particular issue is concerned.
Therefore there is no revenue loss of any kind whatsoever.
The querist is under a mistaken notion that the land-owning-builder who retains the flat(s) till such time it gets sold, is required to pay stamp duty.
Guest
(Expert) 22 April 2014
There would be Revenue Loss if the builder is not assessing the valuation of building apart from land valuation for municipal and corporation taxes
ABDUL RAZIQUE
(Expert) 22 April 2014
I differ with M A Ibrahim and agree with other experts because when you construct a building upon your own land and from there you have sold some flat and rest one have in your custody. It is necessary to registered in your name? who will execute this flat? so the builder has no stole stamp duty.
