Booking a plot before convertion

Chethan Jagathap (Querist) 07 April 2024 This query is : Resolved
Hello everyone,

I am planning to invest in a plot but the developer has the agricultural land in his name and he is collecting 30% of advance and making agreement with buyer. Developer will be converting land and taking necessary approvals from local planning authority within 1 year.
Developer will be mentioning the survey number and plot number in sale agreement in the schedule?
Can we proceed with agreement with the developer?

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Quick Summary

This discussion explores the risks of purchasing a plot of land that is still agricultural and awaiting conversion. Key concerns include verifying the developer's reputation and ability to secure necessary approvals within the promised timeframe. It's strongly advised to seek legal counsel and thoroughly review the sale agreement, ensuring clauses for refunds are in place should the conversion not materialise.

T. Kalaiselvan, Advocate (Expert) 07 April 2024
If you are entering into an agreement for sale for the property that is not existing then you may have to ensure that if this is a genuine deal.
Have you enquired and confirmed about the reputation and genuineness of the developer?
Is there any possibility that the developer will convert the agricultural land into NA within the time stipulated?
Who is the owner of the property?
Did you obtain a legal opinion from an experienced lawyer before venturing into this agreement ?

kavksatyanarayana (Expert) 07 April 2024
Yes. Do you believe the words of the builder? If the owner agrees to the sale, what is the extent of the site? No builder can obtain the building plan within a year, why because to convert the land into Non-agricultural takes at least six months and may extend. After preparing and applying the plan and getting approval takes at least more than six months in some times.

SIVARAMAPRASAD KAPPAGANTU (Expert) 08 April 2024
Here the question is believing in the Builder. Suppose, he is unsuccessful in getting the NA permission, will he refund the money if NA doesn't materialize within a reasonable time and he includes a clause to that effect specifying the reasonable time also in the agreement?

Even after such clause in agreement, Builder decides not to pay or not in a position to pay if NA permission isn't received? Ultimately the question is can you believe the Builder no matter how much legally binding agreement is entered into with him.

Of course, most of the time, Officials give NA permission as if it is a mere formality once required fee is paid rather than after examining the impact of converting a tract of land into NA on the area environmentally and in terms of loss of crop.

P. Venu (Expert) 08 April 2024
No definite suggestion is possible unless the documents are perused and issues discussed.

T. Kalaiselvan, Advocate (Expert) 10 April 2024
Nothing prevents you from obtaining a legal opinion from an experienced local lawyer before investing into this venture.
A precautionary measure will save your future interests and huge money, hence be cautious on all such aspects, do not be attracted towards false promises just by the looks or the luring offers made to you in this regard.

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