Conveyance Deed for Housing Society in Maharashtra: A Detailed Guidance from CSM
In Maharashtra, the Conveyance Deed is a critical legal tool for the transfer of ownership of property from the developer to the housing society. The process of the conveyance deed in Maharashtra has specific legal requirements and implications, especially for housing societies formed under the Maharashtra Cooperative Societies Act, 1960.
In this article make for general understanding information only, for more details please contact our CSM Legal Team, we will walk you through the concept of a conveyance deed, its legal significance, the process, and important details that housing societies in Maharashtra must be aware of.
What is a Conveyance Deed?
A Conveyance Deed is a legal document that formally transfers the ownership of property (land and buildings) from one party (usually the builder or landowner) to another (typically the housing society). It serves as evidence of the society’s rightful ownership of the property.
In the context of a housing society in Maharashtra, the conveyance deed signifies the formal and legal handover of the title of land and buildings that the society occupies. This deed is essential for the society to obtain a clear and marketable title to the property, which is necessary for obtaining loans, selling individual flats, or dealing with property transactions.
Why is a Conveyance Deed Important for Housing Societies in Maharashtra?
- Legal Ownership: Until the conveyance deed is executed, the builder/developer retains legal ownership of the land and buildings, even if the housing society is managing the property. Without this deed, the society lacks the formal, legal title to the property.
- Clear Title: The conveyance deed ensures that the housing society receives a “clear title” to the property, free from encumbrances. This is crucial for the society’s future dealings with the property.
- Right to Sell and Mortgages: Without a conveyance deed, the housing society cannot sell the land or mortgage the property for loans. It can only transfer the individual flat owners’ rights in their respective flats.
- Property Taxes: Once the conveyance deed is executed, the society can take responsibility for property taxes and other local municipal charges.
Legal Framework for Conveyance Deed in Maharashtra
In Maharashtra, the conveyance deed is governed by multiple laws and regulations, such as:
- The Maharashtra Ownership Flats Act, 1963 (MOFA):
- This Act mandates that the builder must convey the land and building to the housing society within a specified period after the society is formed.
- MOFA provides guidelines on the time frame for the conveyance deed, ensuring that the society is not left with an unclear title.
- The Maharashtra Cooperative Societies Act, 1960:
- Under this Act, the housing society must be duly registered for the conveyance deed to be executed.
- This Act outlines the functioning, rights, and responsibilities of cooperative housing societies.
- The Registration Act, 1908:
- A conveyance deed must be registered with the sub-registrar of the district where the property is situated. It becomes legally binding only after registration.
Key Steps in the Conveyance Deed Process for Housing Societies in Maharashtra
The process of executing a conveyance deed for a housing society typically involves the following steps:
1. Formation of the Housing Society
- Before the conveyance deed can be executed, a housing society must be duly formed under the Maharashtra Cooperative Societies Act, 1960.
- A general body meeting is held, and members must elect a managing committee to represent the society.
2. Demand for Conveyance from the Builder
- Under the Maharashtra Ownership Flats Act (MOFA), a builder is legally required to convey the title of land and building to the housing society within a specified time frame (typically within 4 months to 1 year after the society is formed).
- If the builder delays the conveyance, the society can take legal action, including approaching the Maharashtra Real Estate Regulatory Authority (MahaRERA) or filing a civil suit for enforcement.
3. Drafting the Conveyance Deed
- The conveyance deed must be carefully drafted to ensure that it includes all essential details such as the property description, the parties involved, and the rights being transferred.
- It must clearly state that the builder is transferring the land and the buildings to the housing society, along with any rights, title, and interest.
4. Stamp Duty and Registration
- The conveyance deed must be executed on non-judicial stamp paper of the required value as per the Stamp Act of Maharashtra.
- The current stamp duty for a conveyance deed in Maharashtra is 5% of the market value of the property.
- The document must be signed by both the builder (transferor) and the society (transferee). It should then be registered with the local sub-registrar to be legally valid.
5. Handover of Possession
- After the conveyance deed is registered, the builder must hand over possession of the property, along with the original documents, to the housing society.
6. Obtain Title Deed and Possession Certificate
- Once the conveyance deed is executed and registered, the housing society should obtain the Title Deed and a Possession Certificate from the local municipal authority.
Contents of the Conveyance Deed for a Housing Society in Maharashtra
A typical conveyance deed includes the following essential sections:
- Title of the Document: Typically titled as “Conveyance Deed.”
- Parties Involved: Details of the builder (transferor) and the housing society (transferee), including their full names, addresses, and designations.
- Recitals: A brief history of the development and formation of the housing society, including the timeline of the builder’s construction and the society’s registration.
- Description of the Property: Detailed description of the property being transferred, including the plot number, boundaries, dimensions, and details of the buildings.
- Transfer of Title: A clause that clearly states that the builder is transferring the property title to the society, free from all encumbrances, mortgages, or legal disputes.
- Consideration: In many cases, the conveyance deed may be executed for a nominal consideration, such as ₹1 or ₹100, depending on the agreement between the parties.
- Covenants: Warranties and representations by the builder, such as the assurance that the title is clear and the property is free from any legal disputes.
- Indemnity Clause: The builder may agree to indemnify the society for any future claims or disputes regarding the property.
- Registration Clause: The deed must state that it will be registered with the local sub-registrar, and the registration fee will be borne by the society.
- Signatures: Signatures of both parties (builder and society) or their representatives, and the date of execution.
Challenges in the Conveyance Deed Process
- Builder Delays: Builders sometimes delay or avoid executing the conveyance deed due to pending dues, disputes, or other reasons. This can delay the society’s ability to gain full ownership.
- Non-Compliance with MOFA: If the builder does not comply with the provisions of MOFA regarding the conveyance deed, the society may need to take legal action.
- Stamp Duty Issues: Miscalculation of stamp duty or failure to pay the appropriate stamp duty can render the deed invalid or cause delays.
Outcome:
The conveyance deed is an essential legal document that protects the interests of the housing society and ensures that it has full ownership of the land and buildings. The process, while straightforward, requires attention to detail to ensure that all legal requirements are met. Housing societies in Maharashtra should take proactive steps to ensure timely execution of the conveyance deed to avoid potential legal and ownership complications.
If you are a housing society in Maharashtra still awaiting a conveyance deed, it is advisable to consult legal experts or property lawyers who can guide you through the process and help protect your society’s rights.
For more detailed please contact us.