Ashish Yadav 14 February 2022

Registry of endorsement case flat

I'm buying a flat from the seller who is still waiting for possession from the builder. Seller got it in 2019 at price X from the builder and is now selling at price Y, which is higher than the original builder buyer agreement. Broker is saying that builder will endorse the transfer from seller to me, but the builder will register it only at price X and not Y.

I'm deducting TDS @1% on full price Y but looks like the sale deed and registry will be on price X. I want to pay registry for the full amount Y but the builder is not ready for that.

Please help me with following questions.

1. Is this legal? They are saying this is the norm in endorsement cases.

2. What if I sell this property in future? How will my capital gain get calculated - based on price X or Y?

3. Any other risks given the registry is at a lower price than the purchase price.

Thanks!

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1 Replies

Sharmishta P Raj (nil) 22 February 2022

To answer your first query- No, it is not legal as there are two sale deeds, and there is no such norm in endorsement cases. The builder will have to execute a sale deed to the seller at price X, and then the seller shall execute another sale deed to you at the price Y since there is an increment in the price from X to Y.
If you sell this property in the future, your capital gain will be calculated on the price Y. Y's capital gain will depend upon the sale deed executed between you and the seller.
Yes, it is illegal as the documents show a lower price, X, than the purchase price, Y. Thus, amendments need to be made as soon as possible.
I hope this helps.
Thank You!