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Deemed conveyance

August 14, 2023

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This article is written by Srushti Khule, a student of NALSAR, University of Law, Hyderabad. The article provides basic knowledge about deemed conveyance in layman’s language.It delineates its importance and the process of registration and addresses some of the basic questions around it.

It has been published by Rachit Garg.

Introduction

Everyone must have heard people saying that they want their own home. Buying your own house is considered the foremost step on the ladder of success. This is true for most of us, but sometimes unawareness or lack of knowledge about some documentation work may bring us problems. On the one hand, when we aspire for a new home, we should understand the complete procedure of house ownership. The residential real estate sector is one of the fastest-growing sectors of the Indian economy. It has been reaching new heights in the last few years. This mainly happens due to urbanisation, rising income, and increasing population. But the rise of the sector is a proportionately increasing number of malpractices, corruption, and frauds. The government has taken several initiatives from its side to combat such wrongs.

One such initiative was taken by the Maharashtra government, which introduced the provision of deemed conveyance in 2008. This initiative is to help the housing societies get title, rights, or interests on land from the landowner or builder if he is not cooperating through the means of legal authority, i.e., the registrar’s office. This article will comprehensively discuss this initiative of deemed conveyance, why one should do it, the documents required, and the process of its registration.

What is deemed conveyance

The deemed conveyance was introduced by the Maharashtra government through the amendment in Maharashtra Ownership Flats( Regulation of the promotion of construction, sale, management, and transfer) Act, 1963 in 2008.
- Section 11 of the original Act was renumbered as sub-section(1) and other sub-sections (2), (3), (4) and (5) were inserted through the amendment of 2008.
- According to sub-section (1), the promoter, who may be a builder or landowner, is required to transfer his right, title, and interest in the land and building in the name of the company or housing society. This is known as the deed of conveyance.
- According to sub-section (3), if the promoter fails to issue this deed of conveyance in due time. In such cases, the housing society or company or association of apartment owners or flat purchasers, whatever the case may be, may apply to the concerned competent authority to issue a certificate that such company or society is entitled to have title or rights executed in their favour. This is known as deemed conveyance.

Rule 9 of the Maharashtra Ownership of Flats (Regulation of the promotion of construction, etc.) Rules, 1964 mentions the time period in which a promoter shall issue a conveyance deed. It says that if no period is agreed upon between the housing society and promoter, then the promoter shall issue a conveyance deed within four months from the date the housing society is registered or the association of flat takers is constituted.
Section 17 of the Real Estate (Regulation and Development) Act, 2016 mentions the promoter to execute a registered conveyance deed and hand over physical possession and other title documents to the association of allottees or competent authority within the specified time as per provisions of local laws. In the absence of local laws, it gives three months to execute the conveyance deed from the date of issuance of the occupancy certificate.
In addition, Rule 9(2) of the Maharashtra Real Estate (Regulation and Development) (Registration of real estate projects, Registration of real estate agents, rates of interest and disclosures on website) Rules, 2017 mentions the time period to convey title by the promoter in a case of plots, single building project and a layout.
- Rule 9(2)(i) gives a three-month period to the promoter from the date allottees in the plot have paid full consideration to the promoter.
- Rule 9(2)(ii) gives a three-month period to the promoter in cases of a single-building project, given no period is agreed upon between the promoter and allottees.
- Rule 9(2)(iii) gives a one-month time period to the promoter in case of a building or a wing of the building in a layout, given no period is agreed upon between the promoter and allottees.

Importance of deemed conveyance

The provision of deemed conveyance was introduced keeping in mind the rising number of complaints where promoters or building developers sold off some parts of land such as common areas, parking lots, clubhouse, and other amenities to an innocent third party for his illicit benefits. The provision ensures that the ownership and control rights are transferred to respective rights holders. It legally recognizes the housing society or company as the rightful owner, making enforcing rules, regulations, and other laws easier.

It promotes transparency and accountability in the functioning of the housing society. The association or cooperative housing society becomes responsible for managing the common areas, and its members have a say in decision-making. This helps foster a sense of community and ensures that the interests of all residents are prioritised.

Redevelopment of societies

There are many societies that were constructed years back, but the builder or developer has not yet issued the conveyance deed. The housing society or association of flat owners of that building may not be able to undergo redevelopment of buildings in their building unless the title, rights, or interest are transferred from the builder to them. Deemed conveyance is an effective and convenient option in these cases. The housing society or association of flat owners of buildings gains control over the title, rights, and interest on that land. They can plan and undertake repairs, renovations, and improvements without dependence on the builder or developer. This allows society to ensure the upkeep of these areas according to their specific requirements and preferences. It helps them maintain and develop society in their desired way.

Difference between deemed conveyance and conveyance

Conveyance	Deemed Conveyance
In legal terms, ‘conveyance’ refers to the transfer of title, right, or interest from one person to another.	This was introduced by the Maharashtra government through a 2008 amendment to give competent authority to issue unilateral conveyance, which is known as deemed conveyance.
The deed of conveyance is issued when the promoter or builder willingly transfers his title, right, or interest in the land and building to the housing society.	Deemed conveyance is the unilateral conveyance that happens due to the non-cooperation of the promoter or builder. It is issued by the registrar’s office on behalf of the promoter if he declines to willingly transfer his title, rights, or interest in the land and building.
This process takes place smoothly and conveniently.	Due to the unwillingness and non-cooperation of the promoter, the force of legal authority is used here.

Documents required for deemed conveyance

The documents are necessary to complete the process of deemed conveyance. Even if a single document is missing, it may extend and complicate the process. Both the online and offline modes to apply for deemed conveyance are available. The documents required for both modes are mentioned below.

All these documents are mentioned on the official website of the Maharashtra government https://mahasewa.org/. The source of this information is the Government Notification dated 22nd June 2018 about the steps, list of documents, procedure, and format for deemed conveyance.

Documents required for online application

According to the official GR dated 22nd June 2018, available at the official website https://mahasewa.org/, the documents to be submitted while applying online are as follows:

The very first step is submitting the application through Form no. 7.
There shall be evidence of registration of the housing society.
There shall be a property card that is not old than three months. A property card is a document issued by the land record department of the state to property owners authenticating the ownership of property.
A list of all legal flat owners of the housing society in the prescribed form. The prescribed form is not mentioned specifically in the GR.
There shall be a copy of the legal notice given to the promoter and other relevant parties according to the Maharashtra Apartment Ownership Act, 1970, regarding the conveyance certificate and intimation of proceeding for deemed conveyance.
The occupancy certificate of the building should be submitted. It is a document issued by the Department of Urban Development certifying that the construction of buildings complies with approved plans and is in an appropriate condition for occupancy. If the concerned housing society does not have an Occupation certificate, then a self-declaration or affidavit stating that the responsibilities and liabilities and actual possession of a building are acceptable.
There shall be a commencement certificate of the building. It is a certificate issued by a competent authority allowing builders for the commencement of construction of the property.
There shall be details of the applicant society and a copy of the resolution regarding deemed conveyance passed in the Annual General Body Meeting or Special General Body Meeting.
The court stamp of Rs 2000 or online fees should be paid.
Lastly, the self-declaration of the applicant that all the documents, to the best of their knowledge, are true and correct is required.

Documents for offline application

According to the said official GR dated 22nd June 2018, available at the official website https://mahasewa.org/, the documents to be submitted while applying online are as follows.

The first step is similar to that for online applications that is, submitting an application through Form no. 7.
There shall be a copy of Form 7 acknowledging deemed conveyance number.
There shall be a sale agreement copy of the flat of one member or proof of ownership, which may include a court decree, will, or inheritance certificate.
Lastly, a copy of the final architect certificate shall be presented.

Procedure for registration of deemed conveyance

According to the said official GR dated 22nd June 2018, available at the official website https://mahasewa.org/, the procedure for registration of deemed conveyance is as follows:

Step 1 – Application

The first step is filing an application. The housing society must fill out form No. 7 and submit it with the documents mentioned above to the concerned District Deputy Registrar. After applying, two things are required to be seen. First, the concerned holders on 7/12 are the same holders given in writing. 7/12 extract is a document containing details of a specific piece of land such as owner name, survey number, area, liabilities, etc. Second, all the other societies and apartments on the same layout are included as parties.

Then the hearing notice is issued to all concerned parties. In the hearing, the promoter or landowner will be given a reasonable opportunity of being heard. After the end of the hearing, the certificate of deemed conveyance will be passed. This is part of the entire procedure. The procedure does not end here.

Step 2 – Adjudication

The second step is the process of adjudication. The housing society shall go to the stamp duty office for adjudication. Here they shall pay all the stamp duty amount if they have paid less or no stamp duty. Stamp duty is to be paid according to the current rent. If it is found that less stamp duty is paid, a penalty may be imposed. The final adjudication order will be issued by the Collector of Stamps.

Step 3 – Registration

The third step is registration. The housing society shall go to the Sub- registrar’s office in the respective jurisdiction of the society. The concerned Sub-Registrar shall complete registration within a one-day time limit according to Maharashtra Lok Seva Hakk Notification, 2015. The deemed conveyance will be registered here.

Step 4 – Entry in record

This is the last step in the process of obtaining deemed conveyance. The concerned society shall apply to the Talathi/Tahsildar or City Survey Officer of the respective jurisdiction for entering the name of the housing society on the Property Card or 7/12 extract. The concerned housing society shall ensure their name is registered on the Property card or 7/12 extract. After checking this, one can consider that the process of deemed conveyance is completed.

Stamp duty applicable for deemed conveyance

The stamp duty is to be paid during the process of adjudication. The sub-registrar shall complete the process if he is satisfied with two conditions.

It is specifically mentioned in the deemed conveyance documents that no F.S.I. is balanced, and it is attached with the current date architect’s certificate. Floor Space Index (F.S.I) is the floor area ratio in a building to the area or size of the piece of land.
The society can submit deemed conveyance deed directly for registration after paying stamp duty at the rate of the number of flats X Rs. 100/- or as prescribed by the Government from time to time if the agreements in the benefit of the present tenement holders are registered with proper stamp duty according to the current rate.

After this, if it is found by the Collector of Stamp of the District that less stamp duty is paid for the said documents, then liability and penalty can be imposed on the concerned society according to Maharashtra Stamp Act, 1958.

Documents to be submitted for Adjudication along with Stamp Duty

The documents are as follows

Application form affixed with Rs. 10/- Court fee stamp;
Code number received by making data entry on the website of https://igrmaharashtra.gov.in/ of Registrar and Stamp Duty Department;
Draft of Conveyance Deed (in two copies).
A copy of the deemed conveyance order and certificate issued under Section 11(3) of the Maharashtra Ownership Flats (Reguláfion of the promotion of construction, sale, management and transfer) Act, 1963.
Proof of making payment of Stamp Duty on the Agreement of Flats (if an agreement is registered, then Index No.2, otherwise original agreements).

Conclusion

The Maharashtra government took the initiative to help the housing society by providing them with legal ownership rights. However, this initiative has yet to bring the result it was aimed at. The data says that a tiny percentage of the total housing society has gone through deemed conveyance. One of the main reasons is that people need to be aware of the advantages of getting deemed conveyance. Instead, they see it as a long hectic process. There is a need to make them aware of their rights. Otherwise, the landowners will keep reaping illicit profits or interests in that building without knowledge of the housing society or flat purchasers. Another main reason for the failure of the desired outcome from this scheme is that various middlemen between the housing society and the registrar’s office informed high stamp duty to the housing society. As a result of this, small housing societies do not consider going for deemed conveyance. Some middlemen perform incomplete work, which results in an incomplete procedure putting the housing society in more problems.

The housing societies should consider deemed conveyance an option for their betterment and not a time-consuming process. Considering these small points and documentation work may make each of us a dream come true for our own home.

Frequently Asked Questions (FAQs)

Is deemed conveyance a time-consuming process?

The timeframe for the deemed conveyance process can vary depending on several factors, including the jurisdiction, complexity of the case, availability of documents, and cooperation of all parties involved. The aim is to resolve the case within the minimum time available. The Maharashtra government recently issued a directive to approve deemed conveyance within 30 days for societies undergoing redevelopment.

Can a society undertake redevelopment after obtaining deemed conveyance?

After obtaining deemed conveyance, a society can undertake redevelopment with the right of ownership and control of the common areas. It can make decisions regarding the reconstruction or renovation of the property, subject to local regulations and bylaws.

References

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