This article has been written by Prince Mighwal.

Introduction

There used to be a time when aggrieved home buyers did not have an option but to give in to builder’s illegal demands. In every dispute or argument arising out of the home buying process, homebuyers had to suffer always. Builders have long been known to coerce, threaten individual home buyers with consequence and cancel their allotment without any reason if they dare to raise a voice.

However, tables have started turning in the recent past. With the increasing use of social media among home buyers, they have easily started forming informal groups. Home Buyers are increasingly engaging builders on various issues related to projects. Builders also find it difficult to silence individuals when confronted as groups.  Although social media and informal groups are good for raising the collective voice, buyers should look forward to registering their associations. We will try to explain the registered association’s benefits and registration steps.

Why register home buyer’s associations

While social media groups and informal groups by home buyers are good for raising collective voice against builders, homebuyers should get their group registered to form a registered, collective and legal body. Some of the benefits of registering the home buyer association are:

• Representation at Consumer Forums: Home buyers associations can file cases on behalf of its members at various forums including Consumer forums.  Cumulative value of cases, when filed by association, can easily exceed one crore and cases can directly be filed in NCDRC. In a recent landmark judgement of Lotus Panache Welfare Association vs 3C Company, NCDRC cleared the deck for home buyer’s associations to file cases for delay penalty etc. 
• Legal Recognitions: Builders do not take homebuyer groups seriously unless their group has legal recognition. In their view, groups are formed and dissolved every month. A legally recognized and registered association gives an impression of the seriousness of the people involved. A legally recognized group can present the grievances of home buyer’s groups at various forums.
• Credibility: When groups are registered, the office bearers are also subjected to rules and regulation of society. This gives a sense of credibility and security to those wanting to join the associations.
• Collect Money for the movement: Once the association is registered, homebuyers can open a bank account in the name of the association. This brings transparency in the collection of funds and expenses. More people shall be interested in joining an association when they have an option to deposit money online for the movement.
• Safeguard the leaders: Not everyone has the time and energy to consistently work for the benefit of others. Builders try to target the frontrunners in the movement against injustice. A registered association can put their weight behind such leaders and extend their monetary support when needed. Actions taken by leaders in such scenarios shall be seen as the actions taken to protect members of such associations. The builder shall not have an option to single out someone and project as if those frontrunners have vested interest.
• Avoid and fight defamation cases: We explained defamation cases being filed by builders against individuals. A registered association can always stand up against such tactics by builders and back those who are targeted by builders.

Documents required for registration

1. Request letter to register a society under Societies Registration Act 1860
2. Two sets of Memorandum of the association including a list of proposed Governing Body and list of desirous persons
3. Two sets of rules and regulations framed for the functioning of the organisation.
4. Affidavits (on Rs.2/- stamp paper from president/Secretary of the Society regarding the name/title of the society.
5. Copy of residence proof of all desirous persons.
6. Proof of ownership of the registered office of the society and no objection certificate (on rs.2/- stamp paper).

What dispute can arise out of this?

About 66 percent of all litigations in Indian courts are related to properties, and most of the Disputes pertain to the title of the immovable property. Disputes related to a property, often arise through claims from legal heirs, co-owners, disputes over easement rights, wrong representation by the seller and improper description of the property in the title deed. If the dispute surrounding a property reaches an indefinite impasse, the bank takes over the property and auctions it off to settle all disputing parties.

A dispute over property may also arise if the seller in the property transaction, after receiving earnest money or a deposit, proceeds to give quotes to other buyers. In this case, the previous buyer can approach the court and contest the title of the property. In other disputes, buyers may question the delay in the delivery of projects by a developer.

If a buyer were to purchase a property inherited by another person, either by gift deed or by a will, it may also lead to disputes. An inherited property may be subject to conditions of the will, probate, letters of administration or succession certificate.

Types of disputes in real estate

Disputed properties may arise from many issues and may involve parties such as your neighbour, landlord or tenant, trespasser, homeowner associations and even family members. Due to the diverse array of stakeholders involved in these disputes, a large portion of legal claims filed involve property disputes. Legal remedies sought range from damages to cover the plaintiff’s losses, ordering one party to cover the repair work and preventing parties from making changes to the property such as building a ‘spite fence’.

Some of the common property disputes that you could come across include:

Case 1: Title disputes

The property title is a representation of your ownership rights to a piece of land or a home. A robust proof of ownership must always be supported by authentic documents, which protect your property against illegal grabbing by a third party. The title to the property gives you the privilege of enjoying the rights of possession, use, and income by way of rent. You must thoroughly investigate all aspects of ownership and verify all related documents.

Things to check

To safeguard yourself from buying into a title dispute, you should take the following precautions:

• You should demand the seller of the property to present all relevant documents of ownership, such as registered agreements, stamp duty payment slips, documents of inheritance etc.
• In case of Maharashtra and Gujarat, you must check the 7/12 extract, from the land register, which gives complete information of the land, i.e., the survey number, area and date of registration of the current owner.
• If the current occupant has inherited the land, then you must check the will/testament or probate in favour of the inheritor.
• You should check all the papers of the bank in case the land was mortgaged to check whether there are any pending loan payments or outstanding lien.

Case 2: Disputes between buyers and builders

Any property transaction is supposed to be a contract meant to be honoured by all parties involved. But, many times, builders tend to fail in meeting their end of the agreement, which leaves the buyer in the lurch. Indefinite delays in possession are the primary cause for disputes between buyers and builders. Unscrupulous builders tend to extort money from the buyer, transfer the project to another developer without proper permission from the society and fail in following the relevant regulatory compliances.

Things to check

When it comes to a project that is under construction or delayed possession, follow these tips:

• You should check more than just the Commencement Certificate obtained by the builder. The builder must have the approved plans in place and all No Objection Certificates from the relevant regulatory authorities.
• You must ask the builder for a definite schedule for construction to complete so that claims can be made for construction-related property bookings.
• Visit the construction site and consult with the authorised individuals of the housing society to investigate the builder’s credibility.
• Check the builder’s past record, the number of projects completed and any pending litigations against the builder.

Case 3: Delayed payment to housing society by the builder

If the builder is carrying out the redevelopment of a housing society, they must pay the rent to the members of the housing society. Till the building in the housing society is revamped, the members must be given temporary accommodation. If these conditions are not adhered to, it might lead to serious disputes between the buyer and the builder. In times of a financial crisis, the builder might declare insolvency, and the project ends up being stalled.

Things to check

Below are some steps to take so that non-payment of dues by the builder does not affect your home buying experience:

• You can opt to get the lump sum amount instead of periodic rents from the builder, in case the builder decides to jump ship before providing possession.
• With the substantial amount of money received, you may invest in the open market to make a profit or find alternate accommodation.
• You can include a heavy penalty clause or a guarantee of alternate accommodation in the consent agreement signed with the builder.

Case 4: Disputes related to inherited property

When buying property inherited by the seller through a will, as an heir or otherwise, one has to be very careful and precise in the transaction. There is always the possibility of fraud in these cases. A dispute can occur if the buyer is not fully aware of how the current seller came in possession of the property, whether it is subject to the conditions of a will, probate, letters of administration or a succession certificate.

Things to check

Follow the below precautions to protect yourself from these types of disputes:

• You must make sure that the name of the seller is mutated from that of the previous owner in the relevant government or revenue records.
• Ask for proof of inheritance, such as a will, probate, letters of administration or a succession certificate.
• Before buying an inherited property, you should know the class of heir that acquired the property such as a widow, offspring, parent or grandparent and whether it is legally acquired by them.
• It is also essential to find out whether the property passed on under the will was self-acquired by the previous titleholder. If the previous owner had also inherited it under a will, they are not permitted to pass it further on in the same way.

Conclusion

At present,  the need of Home Buyer Association has been vastly increased and the government also needs this process in the real estate sector to decrease the graph of disputes. Some fast-track courts also set up where home buyers association approaches for decree.

The basic fundamental of these type of association to maintain the balance between both the parties i.e., seller and buyer,

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