Conveyance Deed: Importance and documents required

-Manisha Prabhu

What is the meaning of conveyance?

The word ‘conveyance’ means to convey the title of a property from one person

to another by an instrument. ‘Conveyance deed’ is a legal document in writing

between the seller and purchaser evidencing the transfer of right, title and

interest in immovable and movable property in favour of the purchaser. It is final

documents which a builder/land owner is supposed to give while transferring the

ownership of land on which society building is constructed. Execution of

Conveyance deed should comply legal provisions of the Acts such as Transfer of

Property Act 1882, Registration Act 1908, Indian Contract Act, 1872, Income Tax

Act 1961, Maharashtra Ownership Flat Act 1963.

Before execution of conveyance deed by a builder/developer/landowner it is

essential to make the housing complex a legal entity. As per Section 10 of

Maharashtra Ownership Flats Act (MOFA) 1963, as soon as a minimum number of

persons required to form a cooperative society has taken flats, the promoter

within a prescribed period has to submit an application to the Registrar for

Registration of the organisation of persons who take the flats as cooperative

society. Thus MOFA has made obligatory for builder/ developer to form a society

within 4 months of sale of minimum no. of flats. As per Bye law no. 5 the main

object of the society shall be ‘To obtain conveyance from owner/promoter/

builder in accordance with the provisions of the ownership Flats Act and Rules

made there under, of the right, title and interest, in the land with building /

buildings’. This shows that the main objective of formation of society is to get the

conveyance of land. Thus, first step is formation of housing society.

As per section 11 of MOFA, 1963 it is the responsibility of the Promoter/ Builder

to take all necessary steps required to convey the land and the building within

four months of formation of the society and also deliver all documents related to

title of property which may be in his possession or power.

There are very few builders who take steps and convey land in the name of the

society but many avoid doing so or delay the matter to get future benefits

attached to the land such as additional Floor Space Index (FSI), Transfer of

Development Rights (TDR), Redevelopment rights, etc.

In most of the cases office bearers of societies are ignorant about the conveyance

of land for which full payment has been made by all the members to the builder.

In such cases the benefits directly go to the builder as title of land is in the name

of the builder or land owner.

To avoid such loss we should know the benefits of having conveyance of land in

favour of society –

1. Legal title – When the land and building is conveyed/ transferred in the

name of the society, which means the society gets legal title of the

property.

2. Additional FSI (FSI means Floor Space Index, which is the ratio between the

built up area allowed and plot area available) - The advantage of additional

FSI can be gained by Cooperative housing society only after obtaining

conveyance.

3. Free and marketable property – Only after obtaining conveyance the

buyers have free and marketable title over property, until then the land

and building continues to be in the name of original owner.

4. Loan can be raised – Society can raise loan from bank and other financial

institutions for major repair work only if conveyance is completed.

5. Benefit of Transfer of Development rights (TDR) – Society can take benefit

of TDR during redevelopment of building/s.

6. Reconstruction of building – No Objection Certificate for reconstruction of

building can be obtained from Municipal authorities only when conveyance

is obtained by society.

7. Compensation from builder on redevelopment – Society can redevelop

building/s with additional FSI and purchasing TDR from others.

Consequences if Conveyance is not done in favour of society –

1. Even though a person has purchased a flat, the member is not the owner of

land and building.

2. Name of society is not recorded in Government records like on property

card and 7/12 ledger extract.

3. The builder/developer may transfer FSI/TDR to his other projects, depriving

the society who is legally entitled for it.

4. The builder/developer may mortgage the property as he still holds legal

title of the property.

5. After lapse of many years the builder may demand compensation from

society for execution of conveyance deed.

6. In case of non cooperation by builder or if builder is untraceable the society

will have to sought for deemed conveyance which is a lengthier, time

consuming and comparatively expensive procedure.

7. Society cannot go for redevelopment unless and until conveyance of land is

done.

8. Housing Societies do not receive tax bills and common amenities bills in

their name but in the name of land owner.

9. In case of unfortunate incidences like land slide or earthquake, the original

land owner can always claim title of the land as still the legal title is in his

name.

Documents required for Conveyance –

1. Registration certificate of the society

2. 7/12 land Record Ledger Extract

3. Property card

4. Development Agreement between Landlord and Builder/

copy of Power of Attorney

5. Sanctioned plan copy from BMC

6. Approved Plan of the building

7. Completion Certificate and occupation certificate

8. Urban land ceiling order

9. Conveyance deed of earlier owners

10. NA Tax paid receipts

11. Agreement of sale with the developer/ builder (All pages)

12. Stamp duty paid proof by the flat purchasers

13. Title clearance certificate

14. Search report of last 30 years

Procedure for execution of Conveyance deed –

1. Authorization – The General Body of the society should authorize the

managing committee members’ to take initiative and fulfill the formalities

required for execution of conveyance of land and building. Pass a resolution

accordingly.

2. Draft of conveyance deed – The draft of conveyance deed of land and

building prepared by the builder, place the same before the meeting of the

General body for its approval. After receiving approval managing

committee members can proceed with the procedure.

3. Submission of application and documents - Submit all the copies of

documents listed above and make an excel sheet which will have columns

as below with details filled in it as per the agreement of sale copies

received from members –

a. Sr. no.

b. Flat no. / shop no. / Unit no.

c. Name of the member

d. Built up area

e. Date of execution of agreement

f. Property value

g. Stamp duty paid

h. Registration Document no.

i. Remark (Whether okay or incomplete)

4. Verification of payment of Stamp duty – The society has to submit the

copies of agreement to the office of collector for determining if any stamp

duty is payable on such deeds. If the agreement of sale of flat is not

registered and stamp duty is not paid during purchase of flat than the flat

purchaser have to pay the stamp duty on the present market value before

registration of Deed of Conveyance.

If any flat holder is paid less than the required stamp duty, the difference

will have to be paid before registration of deed of conveyance.

If all the flat purchasers have paid stamp duty at the time of agreement

than the society has to pay just Rs. 100/- and need not pay anything extra.

5. Registration of deed of conveyance – After completion of all procedure the

conveyance deed has to be registered before the sub registrar within four

months from the date of execution. For the purpose of Registration both

the transferor and transferee have to attend registrar office and sign the

original document before the Registration authority. Two witnesses are

also required to sign the documents.

6. Documents required to be taken for registration of deed of conveyance –

a. Original daft of conveyance deed

b. Identification card and photos of builders and managing committee

members (who are authorized by the general body of the society).

c. Two witnesses and their identification card.

d. Pan card Xerox of builder, office bearer and witnesses.

e. Latest property card copy (should not be older than 6 months).

f. Occupation certificate copy

g. Certificate of urban land ceiling

h. Registration certificate of the society

i. Latest property tax bill

j. Block plan of the land

k. Resolution copy of authorization

l. Pay order for registration fee as per market rate

After the conveyance deed is executed in favour of society, the

managing committee members will have to make application to city

survey office for making changes in the property card and 7/12 ledger

extract, which is most important.

Traumatic Gujarat Earthquake occurred on 26th

January 2001, is enough to

convince us the importance of Conveyance of land and building.