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If you are a new homeowner in a co-operative housing society, you might believe that because you have purchased a flat in a housing society - you also have rights to the land that your housing society is built upon. But unfortunately, that’s not how it works.
When you purchase a flat from a developer, you have bought the ownership of your apartment and not the land itself on which your society is built. The land on which your housing society is built is still legally owned by the builder/developer.
After completion of the project, it is the builder's obligation to transfer ownership of the land to the co-operative housing society. This transfer of ownership is done through a legal process called 'conveyance deed' or more commonly a 'sale deed'.
You would be surprised to know that many old and even new co-operative housing societies do not have their conveyance deeds, and some don’t even have their names in the 7/12 documents.
What is 'Conveyance Deed' for a co-operative housing society?
The definition of the word “conveyance” is to transfer something legally from one owner to another. A conveyance deed is nothing but a legal document that is used to transfer the rights, title, interest & ownership of land from the builder to the housing society.
According to the provisions under Section 11 of the Maharashtra Ownership Flat Act, 1963 - Conveyance is a fundamental right of a co-operative housing society and it is also the duty of a property developer. The developer is obliged to transfer the rights, title, interest & ownership of land to the co-operative housing society within 4 months of completing the project.
What is 'Deemed Conveyance' and how is it different from 'Conveyance Deed'?
Unfortunately, not all builders are so punctual, diligent, and sincere as to provide a Conveyance Deed within 4 months of completing the project. Which is why if the builder is hesitant to convey the legal rights to the co-operative housing society, then it has to be done through the legal process called 'Deemed Conveyance'.
There are many reasons why developers do not convey the rights of the land to the housing society. They may want to hold on to the land for constructing more buildings in the future. Or they may want a share in the maintenance costs and other amenities. Whereas some builders might just be lazy.
Whatever be the case, one thing is for certain that the developers are taking advantage of their buyer’s lack of awareness & info. And also partly because the current legal system has made it a very daunting process for co-operative housing society committee members to file for Deemed Conveyance.
According to Mr. Suhas Patwardhan (Chairman, Pune District Co-Operative Housing Federation) - In Maharashtra alone, there are over 110,000+ housing societies, out of those only a meager 40,000 of them have been conveyed by the developer.
At a first glance, this procedure might seem daunting to you. But don’t worry, we will simplify this so that you can understand it easily.
Why is Deemed Conveyance important?
If a builder does not undertake the due diligence of providing a Conveyance Deed then legally the co-operative housing society does not own the land upon which it is built. Due to this, the housing society would not be able to enjoy extra FSI (Floor Space Index) and it would not be possible to opt for redevelopment in the future - such as installing lifts, constructing buildings, parks, or other amenities.
This is a major problem if you are a committee member of an older housing society. Since your society’s infrastructure & amenities will inevitably get old and require redevelopment. You are then at the mercy of the developer/builder to get permission for redevelopment. Many times during this situation, the developer will ask for a hefty fee or commission to give permission for the same.
When you face such a problem, the first thing you must do is file for a “deemed conveyance”. But before you file for a deemed conveyance, you must have certain documents and must fulfill legal certain conditions. First, you would need an advocate to guide you on the legal aspects during the procedure. Apart from that, you would also need assistance from the District Registrar in your area.
What are the legal conditions for filing a Deemed Conveyance?
Apart from the documents, there are certain legal requirements that your co-operative housing society must adhere to such as;
At least 60% of apartments in your housing society must be sold.
A co-operative society of flat owners must be formed for at least 3-4 months.
The society committee must establish communication with the builder. And the builder should make an unfulfilled promise of conveyance, or should directly refuse to do the same.
If you have the mentioned documents and have met the above legal conditions, then you are ready to file for a Deemed Conveyance.
How to File Deemed Conveyance (Step-by-step Procedure):
Write a letter or an email to the builder or promoter requesting him to send you a draft of the conveyance deed. Or just send him a draft & request his signature.
In case the builder refuses, then you can send him a legal notice for the same through an advocate.
If yet again the builder refuses to cooperate then you can file an application with the concerned Registrar of Co-operative Societies in your area. You would need some of the above-mentioned documents and Rs.2000/- for the court stamp fees.
You would then have to self-attest all enclosed copies of the document by the co-operative housing society.
The application would then be assessed by the concerned authority and in case there are any mistakes or missing documents you would be told to correct them within 15 days.
Finally, a notice would be sent to the concerned Builder, Developer, Promoter, and the Land Owners.
After the notice is received by all the concerned parties. The first hearing would be conducted in which both you & the builder can discuss your grievances and then produce further evidence for the next hearing.
Then the second hearing would be conducted and in case the builder/other party does not attend both of these initial hearings then the authorities would be forced to pass an ex parte order.
Lastly, the third hearing would be conducted and the final order would be passed by the authority unless there are any more legal questions raised by any party.
Note: On average, this procedure tends to stretch for a period of 6 months. It could be more or less given the complexity of your case.
5 Stage Process of Deemed Conveyance for co-operative housing societies
1. Preparation for Deemed Conveyance -
During the preparatory stage, the managing committee of the co-operative needs to discuss the pros & cons, etc. as well as the resources that would go into filing a deemed conveyance and prepare the society members for the process.
The discussion should be done over a special general body meeting with prior notification to all the society members. It is important that all society members are aware of this because you would need their consent to move ahead. There are a few resolutions that have to be passed during your special general body meeting such as;
Resolution for going ahead with the deemed conveyance procedure.
Resolution for the appointment of an authorized representative.
Resolution for the appointment of a legal consultant (advocate) for the procedure.
Resolution regarding the per member contributions.
2. Documentation for Deemed Conveyance -
Wondering what documents are required to file a Deemed Conveyance? To make your life easier, we have compiled a comprehensive list of all documents that you would require to file for a deemed conveyance, they are as follows:
Draft of Conveyance Deed.
Registered Agreement of Sale with Developer.
7/12 Extract or Property Card.
Village Form No.6 (Mutation Entries)
Location Plan & Layout Plot Plan approved by the local authority.
City Survey Plan from the Revenue Department.
Building / Structure Plan approved by the local authority.
Architect Certificate of undivided interest in the entire Layout Plot.
Latest Title & Search Report of last 30 years from an advocate.
N.A. (Non-Agricultural) Order.
Certificate of Urban Land Ceiling Act, 1976
Certificate of Commencement.
Certificate of Completion.
Occupation Certificate (if available).
List of Flat Owners.
Payment proof of Stamp Duty
Proof of Registration.
Development Agreement between Landlord & Developer.
Legal notices sent to the Developer to execute the Conveyance Deed.
There is a possibility that you would require documents other than the above-mentioned ones depending on your situation, such as;
Land revenue documents from the City Survey Office or Collector’s Office.
Documents from Municipal Corporation.
Documents needed from various professionals like Architects, Advocates, etc.
Documents needed from Promoter, Builder, or Developer.
Getting your hands on the right documents is perhaps the most crucial step in obtaining a deemed conveyance for your co-operative housing society. It is a very meticulous task to find these documents, create them if they aren’t available, and then arrange them in the proper legal format.
3. Legal Case for Deemed Conveyance
After you have lined up all the relevant documents, your society committee has to fill the Deemed Conveyance Application - Form VII along with all the documents attached. Later, a legal notice is sent to the developer asking for their consent and informing them about the legal procedure. Once this entire stage of documentation is completed, the case is submitted to the Deputy District Registrar (DDR) of Cooperative housing societies in your respective district.
When the application is submitted to the DDR, a Deemed Conveyance Scrutiny Report - Form VIII is issued within a period of 30 days. Later on when the compliance is provided, the authorities then issue summons & newspaper notices to the land owners as well as the builders or developers so that they appear for the scheduled hearing.
At the time of the hearing, the authorities will take into consideration both of the parties concerns, disputes, and disagreements. This process could take about 3-4 months on average. And after all the disputes are documented, the authorities will then issue the Deemed Conveyance order within 1 month if your claim is legitimate. This entire process could take upwards of 6 months.
4. Registration of Deemed Conveyance
After the legal procedure, the Deemed Conveyance is created & signed by both parties during this registration phase. If in case the builders or developers do not show up for the legal hearings in the court, the authorities would be obliged to sign the deed on behalf of the co-operative housing society.
The co-operative society then has to make a team of 3 society committee members to sign the deed. After which, the deed is sent to the district stamp office for further adjudication. The office checks whether all members have paid their stamp duties and whether or not there is any balance FSI, if all things are in order then the office issues the adjudication certificate. Later, the certificate has to be franked (stamped) by the local bank and then it has to be resubmitted to the local registration office.
Then the registration office issues a notice to the developer, land owner, or builder just to verify whether there is any kind of stay order against the conveyance deed. In case there is no stay order, the deemed conveyance is then registered and the scanned documents along with the Index - II is issued by the registration office.
Finally here comes the end of the cumbersome registration process and your society is now the proud owner of the land as well as the structures built on top of it.
5. Transfer of property
However, you would have to go through some more formalities in order to complete the entire process. In this final stage, a new application is to be submitted to various departments so that we can make mutation entries in their records.
What are the benefits of having a Conveyance Deed/Deemed Conveyance?
You receive an official & legal title in the name of your co-operative housing society.
Additional FSI could be retained according to the government’s orders.
The property/land of your housing society will be free and marketable.
Loans (mortgages) could be raised easily for repairs, reconstruction & redevelopment.
Your society could avail benefits of TDR (Transfer of Development Rights).
Housing society members can receive compensation from builders upon redevelopment.
What are the problems of not having a Conveyance Deed/Deemed Conveyance?
One of the major glaring problems is that even though residents have purchased apartments & homes in the society, the society is still not the legal owner of the land & buildings.
If there is an unfortunate event such as the collapse of a building or damage to property due to various reasons, the housing society cannot reconstruct or develop new amenities without the permission of the builder.
The builder could mortgage the housing society’s property since he is the legal owner holding the title & rights of the land.
The developer or builder could also transfer your housing society’s FSI & TDR to his other projects for commercial benefits. Thereby depriving your housing society of your legal rights.
The builder could also make an additional profit by selling open spaces that belong to your housing society such as gardens, terraces, parking spaces, etc.
Unfortunately, in most cases, the builder often asks for a huge amount from the society if the conveyance is asked after a long time.
Another huge problem is that the builder might end up selling the entire development rights to a third party which results in the housing society incurring great losses.
Final Thoughts
Getting deemed conveyance from the builder of your housing society can be quite a tedious process. But the result is well worth the effort. In case you found this article to be helpful, then please feel free to share it with your society administrators or any acquaintances that might require this information helpful as well.
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