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.