Deemed conveyance

Conveyance deed is an important document that transfers the ownership of the land to the society from the developers and the previous land owners. In major urban cities, getting conveyance is a big challenge faced by a number of societies, especially the ones heading for redevelopment due to outdated and crumbling structures.
A deemed conveyance is granted when the builder refuses to / fails to execute a conveyance deed in favor of the society. A society that did not receive the conveyance had the right to apply to the Deputy District Registrar (DDR) of Cooperative Societies for effecting the conveyance deed so executed is called deemed conveyance.
In many cases, developers construct one of the many buildings on a plot and for many years do not initiate any further constructions. The developers only register a society but do not grant conveyance, instead they come forward to claim their rights over the area of the unconstructed buildings and claim of developing something apart from the original building mentioned in the layout plan sanctioned, or for claiming benefits of the accruing F.S.I and therefore contest the deemed conveyance that is granted. Well, the question now arises, whether they can do that?
Simply put, NO, they cannot but why?
Firstly, it is the right of the flat- owners to get conveyance of the plot by the p within the stipulated time period as per the statutory obligations. As per MahaRERA, the developer has to complete the transfer within 3 months of receiving the OC and or fifty one per cent. of the total number of allottees in such a building or a wing, have paid the full consideration to the promoter, whichever is earlier
Section 7 and Section 11 of MOFA (Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963, and Section 9 of the MahaRERA Rules specifically cover deemed conveyance and other intricacies of the same.

There are a few pointers that have to be kept in check for why he cannot do that.

  1. Duty of the promoter
  2. Consent of the flat-owners
  3. Construction as per the sanctioned layout plan
  4. Timeline of the project
  5. Duty of the promoter
    As per section 11 of MOFA and Rule 9 of the MahaRERA Rules, It is essentially the duty of the promoter to complete and convey his rights, title to the co-operative housing society and to also execute all relevant documents. It is also his duty to finish the formality of conveying the title and formation of society must be completed within the time as stipulated. It is also his duty to disclose all and any information regarding the building, additional fsi /tdr.
  6. Consent of the flat-owners
    Consent of the flat owners for any form of construction that might take place should be informed. Any blanket consent that might have been obtained cannot be considered when any any change regarding the construction layout has taken place. Consent needs to be taken on full disclosure of the entire construction by the developer. Any consent obtained during agreement of sale does not amount to any blanket consent under the guidelines of MOFA,1963 and RERA
  7. Timeline of the project
    The conveyance of the society along with the formation of the society need to be done by the promoter as per the stipulated timeline as per the statutory legislations. The plot must be taken to be conveyed after the statutory period thus the F.S.I would be available only to the true owner of the plot, i.e the Applicant society. In the matter of Jayantilal Investments v. Madhuvihar Co-operative housing society, it was held that the developer cannot claim that he can continuously exploit the building potential for eternity without conveying the land in favour of the society.
  8. Construction as per sanctioned layout plan
    In various circumstances, it has been held by the court that if the layout plan has been approved and sanctioned, then any changes made or any in f.s.i present would not /should not be taken undue advantage of.
    It was held in the matter of Malad Kokil Co-operative Housing Society Ltd. &Anr. has considered a situation where the developer had shown the layout plan and did not disclose regarding the proposed additional buildings. It was held that the reason that the Entire layout should be presented to the flat purchaser and that there should be full disclosure made to him is with the purpose that he should be aware as to what the Entire lay out of the scheme in which he is going to purchase the property. This Court had considered an illustration that if the original layout shows only the proposed building of ground + one, the flat taker would purchase the same with the knowledge that only few more persons are likely to join the society and there would not be much effect on the facilities, amenities etc. provided to the members of the society.
    However, if a structure of ground + one is converted in a towering structure of 28 storeys, the entire scenario would change. The number of additional members that would reside on the said plot would increase by substantial number, thereby putting an additional load on the infrastructure, amenities, facilities etc. available on the said plot. It was held that if this is permitted, the very purpose of requiring a developer to make full and complete disclosure would stand frustrated.

These 4 pointers broadly encompass the entirety of what is important under deemed conveyance and should be kept in mind. Many landmark cases , have left these precedents, and have laid down in stone how MOFA and RERA truly keep the best interest of the societies and homebuyers at the core of the legislation.

Under Guidance Adv Nirupama Kar Anoushka Singh(Intern)