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Share More   03 October 2023

Conveyance of the open land by builder

Ours is a Complex of 5 buildings. The builder is ready to do the conveyance of each Society separately but for the open land he has offered 99 years lease and not Conveyance to the Federation of Societies. What does the law say on this?


 3 Replies

T. Kalaiselvan, Advocate (Advocate)     03 October 2023

The developer can then proceed with construction and sale of residential or commercial projects. Buyers will own these properties only till the period of 99 years after which the landowner can claim the ownership. Also, the landowners receive a ground rent as per the 99-year lease agreement.

After 99 years, the original owner of the land can claim his ownership or they can extend the lease tenure by signing an agreement with all the terms and conditions, nature of rights, duties of both the parties, termination clause, etc.

LCI Thought Leader Rajesh Tandon ( Col (Retd))     03 November 2023

1. A conveyance deed is a legal document utilized to transfer property ownership between individuals through methods like gifting, exchanging, leasing, or mortgaging. Other terms like gift deed, mortgage deed, lease deed, or sale deed can also be synonymous with a conveyance deed.

2. The conveyance deed holds significant importance for property owners in several ways:

(a) Acts as Legal Evidence: In case of a legal dispute, the conveyance deed serves as crucial evidence, facilitating a speedy resolution.

(b) Proof of Ownership: This document serves as concrete proof of property ownership, explicitly stating the property's rightful owner.

(c) Legally Transfer Property Rights: A conveyance deed allows for the lawful and swift transfer of property rights to another person.

3. It is advisable that you insist on the conveyance deed for release for 99 years of open land because of the following reasons :-

(a) The law governing registration of lease deeds is primarily contained in the Registration Act, 1908 (“Registration Act”) and the Transfer of Property Act, 1882 (“TOPA”).

(b) Section 17(1)(d) of the Registration Act and Section 107 of the TOPA mandate registration of lease deeds in case an immovable property is leased

  • from year to year, or
  • for any term exceeding one year, or
  • Reserving a yearly rent

(c) Section 23 of the Registration Act provides a window of four months from the date of execution for presenting the document for registration before the competent authority. However, the competent authority is empowered to condone such delay (not exceeding four months from the expiration of the aforesaid time period) on account of an urgent necessity or an unavoidable accident.(Sec 25 of Registration Act). In such cases, the party in delay is required to pay a fine not exceeding ten times the amount of the appropriate registration fee. (Sec 25 of Registration Act). 

(d) Section 106 of the TOPA clarifies that in the absence of a written contract or local law or usage, a lease of immovable property (except for agricultural and manufacturing) shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by 15 days’ notice. Recently, the Supreme Court in Siri Chand (Deceased) thr. L.Rs. v. Surinder Singh [AIR 2020 SC 3249] observed that in cases where a lease deed does not mention the period of tenancy, other conditions in the lease deed as well as intention of the parties have to be gathered to find out the true nature of the lease deed.

(e) A lease for a period exceeding one year can only be made by way of a registered instrument

(f) In  Anthony v. KC Ittoop and Sons and Others [AIR 2000 SC 3523], the Supreme Court held that an unregistered instrument cannot create a contractual lease exceeding one year due to the three-pronged statutory restrictions under law (i.e. under Sections 17 and 49 of the Registration Act and Section 107 of TOPA). However, it also held that ‘the presumption, that a lease not exceeding one year stood created by conduct of parties, was un-rebutted.

4. In view of the above legal provisions, I am sure you realise the importance of conveyance deed in the matter of lease for 99 years. Any lease without conveyance deed can be terminated on the part of either lessor or lessee, by 15 days’ notice, and shall be deemed to be a lease from month to month, within the meaning of Section 106 of the TOPA until unless it is a case of agricultural and manufacturing property.

5. When the builder offering the lease for 99 years, I’m sure you would not like to have the lease of 99 years terminated at the drop of the hat by 15 days notice by the builder wherein without any written conveyance deed it would be a case of lease from month to month. Apart from that if the builder is talking of the lease for 99 years then in that case under Sections 17 and 49 of the Registration Act and Section 107 of TOPA, as it is unregistered instrument cannot create a contractual lease exceeding one year as per the Honourable Supreme Court Judgement in the case of Anthony v. KC Ittoop and Sons and Others [AIR 2000 SC 3523].    Therefore the conveyance deed of the lease need to be registered as well .This you may like to apprise the concerned authorities of the society and the builder to demand a conveyance deed of the lease from the builder.

P. Venu (Advocate)     03 November 2023

What is the objective in taking open land? What are proposed terms and conditions?

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