An article about " Search Report in property transactions "

Search Report in property transactions

Investing in land and buildings require huge sums of money. Therefore, every purchaser of immovable property has to be very careful and take all precautions to protect his interest and to make doubly sure that the vendor has good and marketable title and the property is free from encumbrance.

There are various documents which would provide vital information as to whether a property in question is free from encumbrance and the vendor has good and marketable title. Upon going through these public documents available in the Sub-registrar's office, search reports are prepared and such search reports contain information as to whether the property in question is encumbered or not and the vendor possesses a clear and marketable title or not. Search reports are prepared by advocates upon verification and confirmation from the concerned authorities as to genuineness of the documents.

Search report gives a summary of the ownership details of a property and changes in ownership that have occurred from time to time including existing or not of any charge or encumbrance over the property. The search report discloses if there is any existing mortgage, litigation, or claim which may adversely affect the title of the property. Search reports are prepared upon verification of the property documents for the last 30 years. It would be in the interest of the buyers that they insist on production of search report before executing the 'agreement to sell' with the property developers or with the owners of the property.

The search report does not display the defects in the title to the property or any transactions that have not been recorded in the Sub registrar's office. If any document is not registered with the sub-registrar's office it cannot be mentioned in the search report.

Commercial banks do insist on production of search report before granting any advance or loan for purchase of any property. For availing a housing loan from a banking institution, it is a pre-requirement that the title of the property of the present owner should be clear and marketable. Usually banks do not finance any encumbered property or if the property is under legal dispute, as it would reduce their security and increase their exposure to risk. This means the seller should be genuine and the actual owner of the property. The property should not be under any dispute or litigation. The charges for search report is nominal and is included in the processing and administration charges by the bank to sanction and disburse the loan.

This process of obtaining the search report gives security to the buyer. It assures the purchaser that the title of the property which he plans to buy is good and there won't be any problems at a later stage because of any pre-existing charges, encumbrances or legal contentions on the property.

An article about " GUARDIANS ROLE IN MINORS PROPERTIES "

GUARDIANS ROLE IN MINORS PROPERTIES

Transfer of immovable property by persons domiciled in India is governed by the provisions of Transfer of Property Act, 1882. The term "Transfer of Property", as envisaged under section 5 of the Act means an act by which a living person conveys the property to one or more living persons. Living person includes a company or association or body of individuals, whether incorporated or not. However, not all living persons are competent to transfer the immovable property.

Certain pre-requisites are envisaged under the statute which restricts alienation of property by a person who is not competent to enter into a contract. One such restriction is transfer of immovable property by minor.

Hindu Minority and Guardianship Act 1956 (Act 32 of 1956) is one such legislation which is applicable to all Hindus. It is worthwhile to deliberate who is a Hindu as per the provisions of the Act. It may be generally said that all persons other than Mohammedans, Christians and Jews are Hindus. According to the definition a person is considered as Hindu by religion in any of its forms or developments including Veerashaiva, Lingayat, followers of Brahrno Prarthana or Arya Samaj, Buddhists, Jain and Sikh.

According to Indian Majority Act, 1875, which applies to all persons domiciled in India and to all matters except marriage, divorce and adoption, every person whose property has assumed superintendence by Court of Wards is deemed to have attained majority at the completion of 21 years and in all other cases at the completion of 18 years. Guardian means a person having care of the person of a minor or his property or both person and property.

CLASSES OF GUARDIANS

Guardians for a minor may be classified as under:

a)    Natural Guardians

b)    Testamentary Guardians

c)    Guardians appointed by the Court and

d)    De facto Guardians

1. NATURAL GUARDIAN

Under Section 6 of the Hindu Minority and Guardianship Act, 1956, the father is the natural guardian of the person and of the separate property of his minor son or a minor unmarried daughter and after him, the mother. The expression father and mother does not include step-father or step-mother. In case of adopted son, the guardian is the adoptive father and thereafter the adoptive mother. But in case of a child who has not completed five years of age mother is the natural guardian. The guardian of Hindu minor is entitled to take care of minor's property except minor's share in joint family property. The Kartha is entitled to take care of a minor's share in joint family property. In case of an illegitimate boy or an illegitimate unmarried girl, the mother is the natural guardian and after her, the father. In the case of a minor married girl, the husband is the natural guardian. It may be generally questioned as to the provision for minor unmarried girl, as the marriage of a minor is an offence. A person is disqualified from acting as a natural guardian under this Act if he ceases to be a Hindu or has finally renounced the world by converting himself to a hermit.

Prior to the enactment of the Hindu Minority and Guardianship Act, 1956, the natural guardian had wide powers to deal with the property of his minor son or daughter whereby he could mortgage, sell, create a charge even without permission of the Court. However, this unfettered power of the natural guardian to alienate the property of his minor children has been regulated by the Hindu Minority and Guardianship Act,1956 which has been enacted keeping in view the interest and welfare of the minor children. Section  read with Section 8(2) of the Act envisages that a Guardian cannot, without previous sanction of the court, alienate the minor's property in any manner, subject to the exception of lease not exceeding five years or not exceeding one year beyond the date when the minor attains majority. However, purchasing a property on behalf of a minor does not require court's permission.

2. TESTAMENTARY GUARDIANS

Testamentary Guardians mean the persons appointed through Will as guardians of minor and his property. They deal with the property belonging to the minor subject to such restrictions, as are imposed in the Will. The father may appoint any other person as guardian by a Will if the mother has expired earlier. In case the father appoints a guardian by Will even if the mother is alive it is not operative as the mother succeeds him as natural guardian.

Mother may also appoint a guardian by Will, who succeeds her. In case she does not appoint any guardian by Will, the guardian appointed by the father through Will succeeds as guardian after the death of the mother. A Hindu mother may appoint any other person as guardian. The guardian so appointed shall act as natural guardian of the minor subject to the restrictions imposed in the Act and the Will. In case of minor being a girl, the powers of the appointed guardian will end on the marriage of minor girl and her husband will be the guardian thereafter. Only a person who has attained majority is competent to become a guardian. No guardian can be appointed for the undivided interest in the joint family property of the minor. However, the jurisdictional High Court may appoint a guardian for the undivided interest of the minor in joint family property.

3. GUARDIANS APPOINTED BY THE COURT

Appointment of Guardian by the Court is governed by the provisions of the Guardians and Wards Act, 1890. Section 7 of the Guardians and Wards Act, 1890 provides that where the court is satisfied that the appointment of a Guardian is necessary to safeguard the interest of the minor child, it can make an order appointing and declaring a person as Guardian of a minor of his person or property or both. No order appointing another person to be the guardian can be made by the court until the powers of the guardian already appointed or declared have ceased to be so under the provisions of this Act.

4. DE FACTO GUARDIANS

A person who is not the ad hoc guardian and does not act for a specific purpose as a guardian, but manages the affairs of the minor in the same manner as the natural guardian or guardian appointed by the court could be referred to as Defector Guardian although in strict sense of the term there is nothing in the law to describe the de facto guardian. However, the authority of any person to deal with or dispose of any property of a Hindu minor on the ground of his being a de facto guardian of such a minor has been totally abrogated and any alienation by such a guardian is void ab initio and the same cannot be ratified subsequently by the minor after attaining majority. Thus, it is advisable to the intending buyers of immovable property with minor's interest to take all the necessary precautions and due care before proceeding to buy the property to avoid any future complications.

An article about " Builders defer projects for cash crunch "

Builders defer projects for cash crunch

Hit by slowing housing demand and a severe liquidity crunch, real estate companies are scrambling to defer most of their projects residential, commercial, retail and hotel developments especially in and around metros.

In Gurgaon, near New Delhi, several projects of developers, including DLF Ltd., Unitech Ltd., and Parsvanath Developers Ltd., are now delayed by at least six months.

Two of Unitech's projects in Gurgaon Fresco were scheduled for completion by December 2008, but are now expected to be ready only by the end of 2009.

Phase I of the company's Unitech Grande project, the super-luxury residential project in Noida, outside New Delhi, is also delayed and is now expected to be delivered by July 2010, according to analysts and consultants.

Parsvanath's Exotica project in Gurgaon has been delayed by three-four months and is expected to be delivered in the second quarter of 2009. According to Parsvnath executive who didn't want to be named, the first phase of the project will be ready by March 2009 and the entire project will be completed by the first quarter of 2011.

"Initially, the delay was because of approvals required for projects were at various stages, shortage of manpower and poor project management skills," said an analyst with a brokerage firm who didn't want to be identified, referring to the industry as a whole. "From there on it has become a question of liquidity."

DLF's Pinnacle and Icon, both in Gurgaon, were to be completed in the second quarter of 2008, but will now be ready only in the first quarter of 2009, according to real estate consultants.

At the India Economic Summit of the World Economic Forum, DLF chairman K.P. Singh said some of the company's residential, commercial and hotel projects have been delayed because of a slump in real estate demand and the liquidity crunch.

"Demand has gone down so substantially that projects are being shut down across the country," he said on the sidelines of the summit.

The Prestige Shantiniketan, Bangalore, doesn't even have an expected deadline after a 15 storey tower came crumbling down recently. The project has been running two years behind schedule.

Godrej Properties Ltd's modern project in Bangalore, Godrej Woodsman Estate, has also failed to meet the November deadline.

"We are hoping to finish it by April-May, 2009" said a senior Godrej official who did not want to be identified because he is not authorized to speak to the media, but declined to elaborate.

K. Ramakrishnan, executive director, investment banking, of Park Capital Advisors Pvt. Ltd, says he is sceptical of developers meeting their new deadlines for projects. "A lot of developers are going to rethink their pricing strategy and cut down on profit margins if they want to sell and finish projects on time. They will also reformat their units, which means shrinking Rs 60-70 lakh flats down to smaller Rs 30-40 lakh units," said Ramakrishnan.

The delay is not limited to residential projects alone.Developers have either put on hold or are going slow on their mall and hotel projects due to cash flow problems.

An article about " RIGHTS OF OBLIGATION IN PROPERTY DEALINGS "

RIGHTS OF OBLIGATION IN PROPERTY DEALINGS

The transfer of Property Act 1882 deals with various kinds of transfer of immovable property, which include sale, mortgage, lease, exchange etc. In sale of an immovable property there are generally two parties to the said transaction i.e. the Seller/Vendor and the Buyer/Purchaser. Section 55 of the Act refers to the rights and obligations of the seller and purchaser of an immovable property.

The obligations of a seller are:

1. To disclose any material defect in the property of seller and title to the buyer.
2. To produce the documents of title for the verifications of the buyer on his request.
3. To answer all relevant questions of the buyer.
4. To execute proper conveyance deed on full payment of the consideration.
5. To take care of the property and the documents in the period between agreement to sell and handing over the possession of the property after execution and registration of Deed of sale.
6. To give possession of the property.
7. To pay all taxes, charges, rents upto date and discharge any encumbrance on property prior to the conveyance of the property.

The seller has some rights; they are:

1. To receive the rents and profits of the property till its ownership absolutely passes on to the purchaser.
2. Where the ownership has passed on to the purchaser before payment of full sale consideration , the seller will have a charge on the property for the amount of purchase money and interest on such amounts.

The obligations of the buyer are:

1. To inform the seller any fact which may increase the value.
2. To pay the consideration amount to the seller as agreed.
3. Where the ownership has passed on to the purchaser, to bear the loss on account of destruction, increase or decrease in the value of the property not caused by seller.
4. To pay all taxes, charges, rents etc. where the ownership has passed.
5. The purchaser may retain the amount of any un-cleared encumbrance, out of consideration amount payable.

The purchaser is entitled to the following rights:

1. Where the ownership has passed on to the purchaser any benefit of any improvement increase in the value of the property, rents, profits.
2. A charge on the property as against seller and all persons claiming under him for the amounts paid by the purchaser with interest.

The above referred rights and obligations of both the seller and purchaser are binding on both. But the section 55 of Transfer of Property Act provides an exemption. If the parties to the deal have any contract contrary to the rights and obligations as envisaged in the Act, the contracted obligations and rights prevail to that extent.

The obligations and rights have relevance only where there is a valid binding contract of sale between the parties.

Inxcase, the purchaser of property declines to accept the possession of the property, he has charge on the property with regard to earnest money paid and any costs awarded to him of a suit.

The rights of the purchaser is subject to certain limitations. These rights are applicable as long as the matter is in the stage of agreement and when the deal is finalized, conveyance deed is executed; the deal will come to an end. But the case is different where the conveyance is brought on account of fraud practiced by the vendor.

It is also necessary that the purchaser shall avail himself of knowledge or means of knowledge open to him or his agents to verify the credentials of the vendor, his interest, title to the property. He has to exercise due care and diligence by exercising reasonable care and then only the purchaser can claim the protections of law for any mischief played on him.

An article about " RISK ON PURCHASING REVENUE SITES "

 RISK ON PURCHASING REVENUE Sites

Agricultural lands cannot be used for residential purpose, until such lands have been converted from agricultural to non-agricultural residential purpose. Special Deputy Commissioner is the competent authority to order for such conversion after paying requisite conversion charges. A site formed on the agricultural land, without conversion is called Revenue Sites. It is only after conversion of the agricultural land, layout can be formed. However, Layout has to be approved only by the competent authorities. BDA is the competent authority to approve layouts formed in the urban or rural areas in Bangalore, while BMRDA can approve layouts formed outskirts of Bangalore. However, to obtain approval for formation of layout, compliance of rules and regulations contemplated by BDA or BMRDA regarding road width, residential area, civic amenities, other amenities have to be fulfilled.

Zonal Regulations

As per zonal regulation of comprehensive development plan, certain extent of land will be considered as green belt area which must be used only for agricultural activities. Agricultural lands not converted continue to be an agricultural land and there are various restrictions on sale and purchase of such agricultural land.

Purchase of Revenue Site

There are many instances wherein people buy a revenue site without knowing the legal implications involved in buying such sites. The intending purchasers most commonly approach middlemen or local brokers, who, with their marketing skills persuade them to buy such revenue sites, concealing vital defects and flaws in the title of the owner. Ultimately, it is the innocent purchaser who faces the legal battles for defending their property.

Acquisition and Granted Land:

Apart from the site being formed on the agricultural land, there are several instances where the land would have been notified for acquisition by certain statutory authorities or may even be land granted for schedule caste/schedule tribe. In any such circumstances, if sites are formed on such land without obtaining any prior approval from the competent authorities, the purchaser of such a site would not get any valid title over the property. Infact, law stipulates that the lands granted to the schedule castes, will revert back to the grantee himself if purchased in violation of certain mandatory provisions envisaged under the statute.

Form 9 and Form 10

Property falling under the village Panchayath area, which has been marked as Gramathana area in the Village Map by the Survey Department and having Form No.9 and 10 is considered to have genuine site status. Form No.9 and10 is issued for the property coming under Gramathana village Panchayath area. Further, though the form nos. 9 & 10 mention the site number and area in square feet, the original records continue to identify the property by mentioning survey numbers and extent of the land in Acres and Guntas. In such case, it would be very difficult to identify the exact site, its area and boundaries and link with form no.9 & 10. Added to this, the middlemen, in connivance with some of the revenue officials have involved in creating bogus Forms No.9 and 10 and on the basis of such forms, properties are being conveyed in favour of innocent purchasers.

It is not permitted under law to form layouts and sell the sites in the agricultural land or green belt area since even after conveying such sites RTC (Record of Rights, Tenancy and Crop Inspection) reflects the name of the original landowners as the Kathedar. 

Loan facility

If the title deeds are not clear and does not establish marketable title, it is very difficult to obtain bank loans for construction by creating mortgage on such sites. Generally, these sites are situated on the city outskirts. Generally infrastructure will be very poor with no proper roads, electricity or water supply. Further, scope for improvement of infrastructure and providing civic amenities is also very less. Inspite of all these, if the purchaser buys such sites, the original landowner will appear from nowhere and start cultivating the area soon after the prices starts rising high. The purchaser will then find it difficult to identify his property since the boundaries prevailing at the time of purchasing the site would be removed. In such cases, the only remedy available for those aggrieved is to approach court of law. Infact, only a fraction of the deceived purchasers feel that the laws are helpful under such circumstances. 

Hence, it is advisable for the buyers to invest their hard earned money on the sites that has been approved by the competent authorities and does not attract any violation of provision of law pertaining to Law Revenue Rules, Land Reforms Act or other relevant laws. An experienced advocate would give better guidance since the documents pertaining to the property would be diligently and thoroughly scrutinized by an Advocate before the purchaser proceeds to buy the property without involvement of any kind of legal complications and dream to own a house would become a reality.

An article about " Supreme Court expresses anguish against violation of regulatory laws by property developers "

Supreme Court expresses anguish against violation of regulatory laws by property developers

The Supreme Court has come down heavily on State governments and politicians for giving support to builders for construction of illegal and unauthorized structures and later extending protection from demolition in the name of compassion and hardship.

It was observed by the Hon'ble Supreme Court that despite repeated judgments by the Supreme Court and the High Courts, the builders and other affluent people engaged in construction activities, who have over the years have shown scant respect for the regulatory mechanism envisaged in municipal and similar laws, as also the master plans, zonal development plans, sanctioned plans, etc, have received encouragement and support from the state apparatus.

Whenever orders are passed by courts, those in power have come forward to protect the wrong doer either by issuing administrative orders or enacting laws , for regularization of illegal and unauthorized constructions in the name of compassion and hardship.

Expressing its anguish, the Bench observed that the economically affluent people and those having support of the political and executive apparatus of the state have constructed buildings, commercial complexes, multiplexes, malls, etc, in blatant violation of the municipal and town planning laws, master plans, zonal development plans, and even sanctioned building plans. In most of the cases of illegal or unauthorized constructions, the officers of the municipal and other regulatory bodies turn a blind eye either due to the influence of higher authorities of the state or for other extraneous reasons.

The Hon'ble court further held that no compromise should be made with the town planning scheme and no relief given to the violator on grounds that they have spent a substantial amount on construction of the buildings.

The Hon'ble court while permitting the authorities to demolish the unauthorized Shanti Sports Club of India at Masudpur in Delhi, observed that it is high time that the executive and political apparatus of the State took a serious view of the menace of illegal and unauthorized constructions and stop their support to the lobbies of affluent class of builders and others, else even the rural areas of the country will soon witness similar chaotic conditions.

The Bench dismissed the petition filed by the club challenging the decision by the authorities to demolish the premises, as it was constructed on land acquired by the government in 1965. The Hon'ble court observed that in the last four decades, almost all cities, big or small, has seen unplanned growth.

In the 21 st century, the menace of illegal and unauthorized constructions and encroachments has acquired monstrous proportions and everyone has been paying a heavy price for the same.

Supreme court decisions

Lease of Immovable property In SATISH KUMAR V. ZARlF AHMED & ORS [1997] INSC 192 the Hon'ble Supreme Court of India has, inter alia, observed as under: 

The question that arises is : whether a lease of immovable property from month to month or for 11 months is a compulsorily registerable document, though it was reduced to writing as an instrument defined under Section 2(14) of the Stamp Act? A conjoint reading of the first part of section 107 read with Section 17(1) (d) of the Registration Act, does indicate that a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent should be made only by a registered instrument and all other instruments, though reduced to writing and possession is delivered there under, are not compulsorily registerable instruments.

Registration of Sale Deed

In DHARMA NAIKA v. RAMA NAIKA&ANR [2008] INSC 133 the Hon'ble Supreme Court has inter alia observed : 

The only question that needs to be decided in this appeal is whether the sale deed, which was executed and registered after the commencement of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 [Act for short] which came into force with effect from 1 st of January, 1979 in respect of which sale the agreement for sale was executed before the commencement of the Act, would be hit by the provisions of Section 4 of the Act. Dismissing the appeal, the Hon'ble Supreme Court came to the conclusion that after the commence- ment of the Act, if any transfer is effected or any person acquires any granted land by transfer, without the previous permission of the Government, such transfer shall be null and void and no right, title or interest in such land shall be conveyed or be deemed ever to have conveyed by such transfer. The Hon'ble court further held that so far as the facts of the present case are concerned, admittedly, the transfer was effected after the commencement of the Act by a deed of sale dated 13th of October, 1986 without the previous permission of the Government. That being the position, the Hon'ble court held that such transfer must be held to be null and void and no right, title or interest in such land shall be conveyed or be deemed ever to have conveyed by such transfer.

An article about " Consumer’s court orders: Developers cannot hold on conveyance deeds

Consumer’s court orders: Developers cannot hold on conveyance deeds

In a series of significant court orders that might come as a relief to thousands of housing societies languishing without a conveyance deed, the consumer court recently held that a developer can no longer hold on to conveyance on the grounds that he has to carry out further construction on the plot.

More than 80% of the housing societies in Mumbai do not have the conveyance deed fortheir building, the document transferring the plot to the housing society or the flat purchasers.

Most developers do not execute the conveyance deed as they want to exploit the redevelopment potential of the plot or any additional construction rights on the plot in future.

In three recent cases that had come up before the consumer court, developers argued that their rights to any open space or further development will be retained by the developers. The court not only ruled in favour of the society in each case but also slapped a heavy penalty on the developers for defaulting on conveyance.

In Prithvi Enclave Society verses Prithvi builders, the court recently asked the developer to execute the conveyance within four months failing which he willhave to cough up Rs.2000/- per day of the delay. According to one of the residents, the society was formed in 2001 and for years the developer didn't bother to either get an occupation certificate for the building or execute the conveyance deed in the name of the purchasers forcing the society to move the consumer forum. The court held that unless the developer submits specific building plan approved by the municipal corporation, he cannot with hold conveyance to the society. The consumer court has also ordered the developer to pay sum of Rs 12.13 lakh to the residents.

Similar orders were passed in Silver Arch Spring Society versus Sneha builder and in Pleasant Palace Society versus Jain builders.

In case of Silver Arch Spring, the developer has not only been asked to shell out a certain sum as penalty but also has been ordered to pay interest on registration charges collected from the society.

Just last year, the Maharashtra Ownership of Flats Act was amended so as to make it mandatory for the developer to execute the deed within four months or the residents can apply for a deemed conveyance with the competent authority. However, till date not a single file has been cleared under the amended Act.

According to property lawyers unless the state government simplifies the procedure for deemed conveyance, it will remain only on paper. "Right now residents have to submit 36 documents in addition to running from pillar to post to get the deemed conveyance." The recent court orders are important, in that they make it clear that developers can't use flimsy excuse of wanting to build further on the plot for not executing the conveyance deed.

An article about " FEAR GRIPS IN REALTY MARKET "

FEAR GRIPS IN REALTY MARKET

The real estate market has almost lost the source of liquidity as developers don't have money although just a few months back they had several options for funding their projects. The scene has drastically altered from developers being coaxed by many funds and investors to the present situation in which they are now looking out for resources in desperation. As private equity players and other realty funds supported by various investors are staying their investment decisions there has been complete somnolence on the part of banks and other lending agencies. As all indices have fallen it is unimaginable to even think of raising money from the capital market. Realty stocks have taken the largest share of blows.

During the last ten years as real estate was coming up as a new asset class with unparalleled returns everyone wanted a share of this growth. More funds than projects were available just two years ago. From every side money was flowing into real estate. As a result many projects were launched in anticipation. There was a great deal of speculation.

Partial liberalization had opened some extra funding choices for realtors. The last five years were rather meaningful for the market as foreign and domestic funds competed for the booming real estate share in the country. The capital market also gave full support to realty stocks and the majority of realty companies like DLF, Unitech and Omaxe, Parsvnath and Orbit Corporation were listed at great premiums. During the recent months several developers have opted for high cost funds at interest from 25 per cent to 35 per cent. The majority of these loans were raised from open markets to complete projects or sometimes to launch fresh projects. As these projects go forward they will confront the worst problem as high input costs are involved, which will not give builders much room to maneuver.

The player from Saffron Asset Advisor has put forth the need to form a special contingency fund for the realty market to prevent any grave casualty. Experts feel that this kind of step will restore the confidence of the market in a considerable measure. The market lacks trust more than anything else. An overly careful approach has been adopted by the majority of stakeholders which has jinxed the whole process. The government should playa key role in easing the market and relaxing the ECBroute. Pune based Kumar Builders have called for government intervention to lift the realty sector out of the stormy waters. They feel it is time some liquidity was injected into the market before the situation goes out of control. An intensive effort was needed as real estate is an intrinsic part of the economy and a slowdown in it would negatively impact the GDP growth that is already slowing down. The supply pipelines of small cities such as Pune are more based on need unlike metros such as Mumbai, Delhi and Bangalore.

Fears exist that if a timely measure is not taken soon the market may go for major corrections in some parts that have excessive supply which will cause a near crash. The upcoming real estate market will be harmed by this and the likelihood of funds from overseas will dry up after two years at the most. Sellers and buyers are not prepared for any serious negotiation but they should come to the table while there is still time. Some optimism too exists. Although speculators are avoiding the market, real buyers may emerge as prices become more realistic soon.

An article about " Consumer’s court orders "

Consumer’s court orders: Developers cannot hold on conveyance deeds

In a series of great court orders which may come back as a relief to thousands of housing societies languishing while not a conveyance deed, the patron court recently control that a developer will not hold on to conveyance on the grounds that he must do more construction on the plot.

More than eightieth of the housing societies in Mumbai don't have the conveyance deed for his or her building, the document transferring the plot to the housing society or the flat purchasers.

Most developers don't execute the conveyance deed as they need to use the improvement potential of the plot or any extra construction rights on the plot in future.

In 3 recent cases that had come back up before the patron court, developers argued that their rights to any open house or more development are going to be maintained by the developers. The court not solely dominated in favour of the society in every case however additionally abused  a significant penalty on the developers for defaulting on conveyance.

In Prithvi district Society verses Prithvi builders, the court recently asked the developer to execute the conveyance at intervals four months failing that he can got to cough up Rs.2000/- per day of the delay. in keeping with one among the residents, the society was fashioned in 2001 ANd for years the developer did not trouble to either get an occupation certificate for the building or execute the conveyance deed within the name of the purchasers forcing the society to maneuver the patron forum. The court control that unless the developer submits specific building set up approved by the municipal corporation, he cannot with hold conveyance to the society. the patron court has additionally ordered the developer to pay add of Rs twelve.13 100000 to the residents.

Similar orders were passed in Silver Arch Spring Society versus Sneha builder and in Pleasant Palace Society versus Jainist builders.

In case of Silver Arch Spring, the developer has not solely been asked to administer an explicit add as penalty however additionally has been ordered to pay interest on registration charges collected from the society.

Just last year, the Maharashtra possession of Flats Act was amended therefore on build it necessary for the developer to execute the deed at intervals four months or the residents will apply for a deemed conveyance with the competent authority. However, until date not one file has been cleared below the amended Act.

According to property lawyers unless the authorities simplifies the procedure for deemed conveyance, it'll stay solely on paper. Right currently residents got to submit thirty six documents additionally to running from pillar to post to urge the deemed conveyance. The recent court orders ar vital, therein they create it clear that developers cannot use flimsy excuse of desirous to build more on the plot for not execution the conveyance deed.

An article about " POSITION OF INSOLVENT'S PROPERTY "

POSITION OF INSOLVENT'S PROPERTY

The term "Insolvent", in common parlance is referred as Pauper or Bankrupt. An insolvent is not considered a legal person for the purpose of enforcement of any obligation committed by him either during the pendency of insolvency proceedings or after he is adjudged as insolvent.

Adjudication of an Insolvent

In India, jurisdiction of the courts to adjudicate a person as an insolvent has been conferred by two Acts, namely, the Presidency towns Insolvency Act, 1909, which is applicable in the Presidency towns in India and the Provincial Insolvency Act, 1920, applicable in the muffusil areas.

To adjudicate a person as an Insolvent, such a person has to be a "Debtor" and should have committed an act of insolvency. A debtor, under these Acts, includes only those who are subjected to Indian laws, either by birth or by domicile including a temporary residence. Thus, a foreigner cannot be adjudged insolvent by a court in India unless the alleged act of insolvency was committed or suffered by that person during his personal residence in India.

Minor cannot be adjudged Insolvent

Under Indian Laws, as a minor is not competent to enter into a contract he cannot be adjudged Insolvent even on his own petition. In the case of a minor being a partner in a firm consisting of adult and minor partners and if adjudication order is sought against the firm, the same shall be binding on the firm/partners except the minor.

Property of insolvent

The expression "Property of an Insolvent", has been defined as only the property of the insolvent which is divisible amongst the creditors and not otherwise. It includes any property over which or over the profits of which any person has the power of alienation which can be exercised for his own benefit.

The word 'property' includes the right in the property or things of a person. However, to constitute the property, an insolvent should have an interest in praesenti to dispose of the same and not such an interest which may depend upon the fulfillment of certain conditions or contingencies.

Appointment of Official Assignee or Receiver

Under section 17 of the Presidency Town Insolvency Actor section 28(2) of Provincial Insolvency Act, 1920, after the order of adjudication, the property of an insolvent vests in the Official Assignee and becomes divisible amongst the creditors, irrespective of its situation. However, when an order of adjudication has been passed under the Presidency Town Insolvency Act,1909, any order of adjudication passed against the same insolvent by the District Court of another place, at a later date under Provincial Insolvency Act will not operate since the said property is already vested in the Official Assignee under the Presidency Town Insolvency Act.

Movable and Immovable property

The order of adjudication operates as a statutory transfer to the Official Assignee of all the property of the insolvent person in India, whether movable or immovable. Similarly, the movable property of an insolvent situated in foreign country shall vest with the Official Assignee or Receiver. But, the immovable property of an insolvent situated in a foreign country, shall be governed by the law of the country within whose jurisdiction such property is situated.

Divisible and indivisible Properties

The property which is divisible amongst the creditors of the insolvent can only vest with the Official Assignee or the Receiver, which may be:

1.     Property belonging to an insolvent at the time of commencement of insolvency proceedings.

2.    Property which may be acquired by or devolve on the insolvent after the order of adjudication and before his discharge.

3.    Goods in possession, or disposition of the insolvent.

The properties which are not divisible amongst the creditors of the insolvent falls into two classes

(a). Property held by the insolvent in trust for any other person and

(b ). Tools of trade, apparel and other similar property.

Vesting of property in the Official Receiver or Assignee

Immediately upon an order of adjudication by the Court, the property of the insolvent wherever situated vests in the officialassignee/receiver. Till an Official Receiver is appointed by the Court, all the rights and powers exercisable by the Receiver can be exercised by the Court itself.

Intervention of Official Assignee is must

The right and interest of an insolvent over the property do not automatically get transferred in favour of the Official Receiver upon passing of an adjudication order by the court unless the Official Assignee intervenes on behalf of the insolvent.

Where the official assignee does not intervene and the insolvent transfers the said property to another person who takes it in good faith and for value, the transferee acquires a good title to the property.

Powers of the Official Receiver or Assignee

With the order of adjudication, the property of the insolvent vests in the Official Assignee or the receiver and it is the duty of the assignee to realize such properties of the insolvent expeditiously and to distribute dividends to the creditors entitled thereto. However, before exercising the power of realization of properties of an insolvent, abundant caution has to be exercised by the assignee to avoid unnecessary litigations.

Under the aforesaid Acts, certain powers have beenvested with the assignee:

Power to sell: The Receiver is empowered to sell the insolvent's property without the consent of the Court. But the aforesaid Acts do not empower the receiver or the official assignee to sell anything more than the property of the insolvent which vests in him by reason of the adjudication.

Power in case of mortgaged property: Where a Receiver is appointed by consent of the parties after passing of a decree in a mortgage suit for sale of such mortgaged property and it is agreed that the receiver shall recover the rents of the property for a period of one year to hand over the same to the mortgagee, the mortgagee's right to receive the rents will not be affected by insolvency of the mortgagor at any time during this period and neither the official assignee nor other decree- holders will be entitled to a rate able distribution of such rents.

Bonafide Sale

Section 53 of the Provincial Insolvency Act provides that a transfer of property not being a transfer in favour of a purchaser in good faith and for valuable consideration shall, if the transferor is adjudged insolvent within two years after the date of transfer, be voidable as against the Receiver. Further, where the debtor transfers all or substantially all the properties in consideration of the past debts, such a transfer constitutes an act of insolvency since it has the effect of withdrawing all the property from the legal process, which his creditors have a right to enforce against the insolvent.

Thus, an order of adjudication of insolvency willdeprive the insolvent from dealing with his properties which shall be dealtwith by the Official Assignee or Receiver when once such a person is appointedby the Court.

An article about " Occupancy Certificate "

Occupancy Certificate

Occupancy Certificate is a very important document. It evidences the completion of the building as per the approved plan and compliance of local laws. Local bodies like city corporations / city municipalities issue occupancy certificates. Without occupancy certificate, it is difficult to get the water and sanitary connections. Financial institutions also insist on occupancy certificate.Problems with respect to issuance of occupancy certificate arise on account of violation of building laws, which are increasing day by day. Though the people have spent their hard earned money on the project with a dream of owning a house, they could not occupy the house for want of occupancy certificate. They have to suffer for none of their faults.

Having invested their precious money in such buildings and after waiting for many years to get occupancy certificate, the purchasers  are forced to occupy the flats even without power, water and sewerage connections instead of loosing the property.

In one of the cases, abuilder was unable to obtain the occupancy certificate. After a prolonged wait, he requested his purchasers and handed over the apartments without power, water and sewerage connections. He put the entire blame on the revenue authorities and disappeared. The occupants had to find their own ways.

Obtaining the approval of the plans has become just a casual affair and nobody will abide by that. It is just a document to be produced during inspection. During the boom time, a builder constructed several houses and flats violating building rules and regulations. He deviated from the approved building plans and went on to construct apartments where he should not have constructed.

The civic authorities refused to give occupancy certificate despite the best efforts of the builder. In the mean time, the apartment purchasers on the assumption that things were happening to their satisfaction, performed house-warming ceremonies and took possession of the flats. When they were about to move in, the builder revealed the shocking news that even though he had constructed the apartments and houses to their liking the authorities were not issuing occupancy certificate on one pretext or the other. Another builder constructed small flats targeting the middle income group. The authorities, however, refused to issue occupancy certificate because of deviation from the approved plan. In this case, the builder got the plan approved for construction of 4 dwelling units, 2 on the ground floor and 2 on the first floor, However, he did some thing different in gross violation of the approved plan. Instead of constructing 4 dwelling units, he constructed 6 dwelling units. 
The persons who invested in the flats are now desperate, as they would lose their money and the flats if the authorities decide to demolish the structure. It is not that only the flat owners are suffering. A few builders, who have a heart for the investing public, too face problems. One such builder constructed 8 flats in accordance with the building regulations and bye-laws and approved building plan. He has completed 5 flat and 3 remains to be completed. The builder received full payment from five purchasers while the other three backed out. This has put the builder in a difficult situation. 
For want of funds, three flats remained incomplete and occupancy certificate could not be obtained as the authorities will issue occupancy certificate only after completion of the entire construction. The financial institutions refused to lend in the absence of occupancy certificate or no objection certificate from the authorities. The net result was that not only the builder was losing money but also the purchasers of the flats, who have to pay interest to the financial institutions. The financiers too face difficulties in getting repayment of loan instalments. 
The authorities in the scheme of things must be blamed for this state of affairs. The inspecting authorities do not carry out periodic and surprise checks at the construction site. In case of deviation, they should take the builder to task in the beginning itself and not at the fag end of the construction. Majority of the builders follow rules and regulations but a few do not. They disobey rules and regulations and volate them. 
This is a vicious circle, which only the government can break. Government must initiate immediate remedial action to stem the rot. The authorities should not be very rigid in granting completion certificates. If the builder has deviated a little more than the allowed percentage, the authorities may impose a penalty and regularize the building. The investors too are responsible for this fiasco. They do not check the antecedents of the builder and his track record. Before taking possession, they do not check whether the building is according to the sanctioned plan and the fixtures are according to the agreement. Many do not demand occupancy certificate, parent documents, title deeds, deposit receipts from the builder. 
The purchaser who has not collected the required documents has to face various types of problems at a later stage.