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Reema   31 October 2021

Conveyance to society when flats are unsold

we have a building that was completed in 1999 with 33 flats. there are still 10 unsold flats.

query 1

society is formed but builder is saying that since all flats are not sold, the conveyance can not be done.  Is it legal/legitimate to keep flats unsold for so long and also to thus delay/avoid conveyance to wait for 100% flats to be sold ? (that may never happen).

place : pune, maharashtra.

query 2

Meanwhile such unsold flats are also given on rent. are there any provisions that prohibit builder/promoter to give unsold flats on rent ? 



Learning

 6 Replies

Anusha Singh   01 November 2021

As per your query it is understood that you need information regarding the conveyance.

Under MOFA (MAHARASHTRA OWNERSHIP OF FLATS (REGULATION OF THE PROMOTION OF CONSTRUCTION, SALE, MANAGEMENT AND TRANSFER) ACT, 1963) every builder is required to become a member of the housing society being registered as provided under Section 10 of MOFA. Its Sub-Section 1 reads:

 

“(1)As soon as a minimum number of persons required to form a co-operative society or a company have taken fiats, the promoter shall within the prescribed period submit an application to the Registrar for registration of the organisation of persons who take the flats as a co operative society or, as the case may be, as a company; and the promoter shall join, in respect of the flats which have not been taken, in such application for membership of a co-operative society or as the case may be of. a company. Nothing in this section shall effect the right’ of the promoter to dispose of the remaining flats in accordance with the provisions of this Act.”

So make sure that in the membership register for unsold flats name of the builder is entered. Once the provisional managing committee is constituted take  on record the flat numbers which are to be sold by the builder later. Pass a resolution authorizing Secretary calling for application for membership of the Builder as he is so required as per Bye-Law No 19 informing of the following conditions which he is supposed to comply.

1.Tender  the value of at least Ten shares of the Society, along with his Application for Membership if not done so far(99% he must not have done it);

2.Tender Entrance Fee of Rs. 100/-, along with the Application for Membership; if not done so far(99% he must not have done it);

In all probability he will not do it. Send a gentle cool stereo-type reminder every week.

When the maintenance Bills are raised raise one Bill for all Unsold flats in the name of the Builder and send it and take acknowledgement on the copy.

It may happen that some flats may be sold and builder must have collected maintenance which other members have paid from one date common to all the members. When this member is admitted make sure that a proper resolution is passed and maintenance collected by builder is collected before conferring this membership. Don’t remain under the impression that builder will pay the Bills of maintenance directly to the Society. He will not pay what he has collected from the purchasers of the unsold flats.

After this the society may end up with litigation with the builder to collect the amounts payable by the builder.

In  the first letter the society can also clarify that unsold flats are also under maintenance responsibility of the society and not that if a flat I occupied then only Society incurs expenditure. If the flat is occupied the expenses will be incurred by the member inside the flat but common expenses of the society are not incurred only if a flat is occupied. Once the society is registered expenses will incur irrespective of occupancy.

Some builders do give the unsold flats on rent as it helps the people who wants the house for a short period of time and who can’t afford hotels and it also helps the middle class people in some cases.

Hope it helps!

 

Regards,

Anusha Singh

Reema   01 November 2021

thanks a lot Madam.  Can some clarity be given on Conveyance to society ? Builder says that out of 33 flats, 10 are still unsold so conveyance to society will happen ONLY after all the 10 flats are sold (which can take a very long time). so the question is whether it is a precondition to wait for ALL the flats to be sold for conveyance to take place ? somewhere it was remarked that even if 60% of the flats are sold, conveyance can take place (if that is true, builder's assertion that 100% of flats need to be sold isn't true).  

will greatly appreciate if someone can clarify this.   Place : pune / maharashtra

M V Gupta (Advocate)     01 November 2021

You need not wait until the builder sells all the remaining flats for getting conveyance. See Section 10 (1) of MOFA Act cited by Ms. Anusha Singh in her reply above. Initiate steps calling on the builder to execute conveyance of the property (land and Building) in favor of the society. Notice should be given to the Owner of the land also. The landowner is also liable to execute the conveyance deed in favor of the society.

Reema   01 November 2021

thank you very much for the guidance and responses. will convey this to management committee of building

Kishor Mehta (CEO)     01 November 2021

It is not necessaary for all flats to be sold. The builder has to register the conveyance to the property in the name of the society within four months of the registration of the society. The unsold flats remain the property of the builder and he becomes a member of the society for the unsold flats and has to pay the monthly maintenance for these flats.

Reema   07 November 2021

Thank you! Hope builder is not required to bear expense of stamp duty /registration for unsold flats while such units remain unsold? 


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