Part Performance of the contract

Part Performance of the contract

Sale of immovable property is an act of contract between the parties, wherein each party to the contract has got definite duties to be performed, such as, the vendor has to establish the clear and marketable title to the property and at the time of registration, has to handover the title deeds along with vacant possession of the property. On the other hand, the purchaser has to pay the sale consideration as agreed and co-operate in completing the registration formalities.

It is very important for the seller and the buyer to enter into an Agreement to sell before executing the Sale Deed. The reason is that such agreement will bind both the parties to the agreement and make it obligatory to perform their duties as envisaged in the agreement. The seller and the buyer will be on the disadvantageous position if the agreement is not executed because the purchaser may not co-operate in paying consideration as agreed by both of them and on the other hand, the seller may avoid or delay from proceeding to convey the property at the time of registration, leading to misunderstanding and disputes between the parties. So it is advisable to execute agreement to sell prior to executing the sale deed.

Generally, vacant possession of the property is handed over to the purchaser at the time of registration, but in certain cases, the vendor will handover vacant possession of the property to the purchaser before the registration of the sale deed. This act of the parties to the contract is called part performance.

Rights of the Purchaser:

Section 53-A of Transfer of Property Act recognizes part performance. The purchaser, who gets possession of the property under terms of contracts, pending registration of sale deed, gets equitable rights.

The seller cannot enforce eviction against the purchaser once he has parted with possession of the property as per the agreed terms of contract. The purchaser can enjoy peaceful possession of the property even before the sale deed is executed and registered. Section 29 of Registration Act also recognizes the part performance.

Mandatory Conditions:

Section 53-A of Transfer of property Act stipulates certain mandatory conditions to establish part performance of the contract, as discussed below:

1. The transaction must be a contract for transfer of immovable property for consideration. 

2. The contract must be III writing. 

3. It must have been signed by the seller or his authorized agent. 

4. The terms of contract should be clear, unambiguous and certain, wherein the act of part performance should also be part of the contract.  

5. The vendor, in pursuance of the contract should put the purchaser in vacant possession of the property. 

The purchaser should take the possession and if already in possession shall continue to be in possession. 

6. The purchaser must have made part payment of the sale consideration and should be willing to perform his part of terms and conditions agreed upon.

Equitable right of the purchaser:

The equitable right bestowed on the purchaser can be enforced by the purchaser against the seller or anybody claiming under him. It cannot be enforced against party who has purchased the property for consideration without the knowledge of contract of part performance. As regards the right of the seller is concerned, the only remedy available for the seller is to initiate civil suit against the purchaser, seeking recovery of the balance of sale consideration.

PROCEDURE FOR THE REGISTRATION OF PROPERTY DOCUMENTS

PROCEDURE FOR THE REGISTRATION OF PROPERTY DOCUMENTS

The Indian Registration Act, The Registration (Karnataka Amendment) Act 1975, The Karnataka Registration Rules 1965, govern the registration of documents. Every person may have to visit the office of registration for registering documents at least once in his lifetime, but provisions of Registration Act remain unknown to common public. This article discusses certain provisions, rules of registration.

LANGUAGE OF THE DOCUMENT

Our country is a land of many languages and there is no restriction as to which language should be used in writing the documents. But it is also not possible for the registering officer to know all languages. Section 19 of Indian Registration Act states that if any document in a language which is not understood by the registering officer and is a language not commonly used in the registering district, the registration may be refused, unless such document is accompanied by a true translation into a language commonly used in district and also a true copy.

Karnataka Registration Rule No.11 has recognized following languages in districts and sub districts;

Kannada and English - All districts and sub districts in the State. Telugu - Bellary district Marathi - District of Belgaum, Bijapur, Dharwad and North Karnataka and Sub-districts of Alland, Bidar, Gulbarga. Urdu - Districts of Bidar, Gulbarga, Raichur

Time for presenting the documents

The Act provides as to by which time, the documents should be presented for registration. Every document has to be presented for registration within four months from the date of execution as per section 23. The only exception is Will.

But if the document has to be executed by several persons and each person executes at different times, such document has to be presented for registration and re-registration within four month from the date of each execution.

However, the registration of documents presented after the expiry of four months is allowed on payment of fine as follows as per Section 5 of Indian Registration Act and Rule No.52 of Karnataka Registration Rules.

a) Where the delay does not exceed one week Fine equal to registration fee b) Where delay exceeds one week but does not exceed one calendar month Fine equal to twice the registration fee c) Where the delay exceeds one month but not two months Fine equal to five times of registration fee. d) Where the delay exceeds two months but does not exceed four months Fine equal to ten times of registration fee. Where delay exceeds four months from the date of execution registration is not allowed. The fine is payable is in addition to regular registration fee.

Place for registering the documents

The documents which affect immovable property have to be presented for registration at the office of the sub registrar of the district in whose jurisdiction whole or a portion of such property falls as per section 28 and other documents not affecting the immovable property or copy of decree or order may be presented in any office of sub registrar in whose sub district the document was executed or in the office of any other sub-registrar under the State Government at which all persons executing and claiming under the document prefer. The decree or order may also be presented for registration in the office of the sub-registrar in whose sub-district the original decree or order was made (Sec.28, 29).

Time from which registered document operates

A document which is registered shall be operative from the date of execution or from the date from which it was to operate as disclosed in the document and not from the date of registration (Sec 47).

All registered documents other than Will relating to movable and immovable property shall have priority over oral agreements or declaration in connection with such property. But if such oral agreement or declaration is coupled by delivery of possession of the property and such possession constitutes a valid transfer under any law for the time being in force, such oral agreement or declaration has priority over registered documents.

A Will made subsequent to earlier registered Will have priority over earlier made and registered Will.

A mortgage by deposit of title deeds shall have priority over any mortgage deed subsequently executed and registered, when both relate to the same property (Sec.48).

Duties of Registering Officer

The Registering officer has to endorse the time, hour and place of registration and also the signature of the person presenting the document for registration on every document so presented and shall also be receipted. Every person who executes any document has to admit such execution at the registering office either personally or through his duly appointed agent and shall endorse such admission of execution. The endorsement shall contain the particulars such as signature and addition of the person admitting the execution, the signature and addition of any agent admitting the execution, the signature and addition of every person examined in reference to such document under any provisions of the Registration Act, payments and delivery of any goods made in the presence of the registering officer connected to the document presented for registration, admission of receipt of consideration in full or in part made in the presence or registering officer.

If any person admits the execution but refuses to endorse, the registering office shall register the document, but shall endorse the fact of refusal. The provisions of admitting the execution and endorsement does not apply to copy of decree or order and documents sent to registering officer under special provisions provided in Sec. 89 of the Act (Sec.58). All such endorsements shall be signed and dated by the registering officer.

After completion of process of registration the registering officer shall endorse a certificate on the document with the word “Registered” together with number and details of storage of the document. The certificate of registration has to be signed, dated and sealed by the registering officer (Sec. 60).

MAKE SURE YOU APPROACH THE RIGHT AUTHORITY FOR REGISTRATION

MAKE SURE YOU APPROACH THE RIGHT AUTHORITY FOR REGISTRATION

Of late, people are extremely confused about the registration of transfer of properties. The registration process which was a smooth process hitherto, all of a sudden has become very tedious calling various documents, approvals, orders, which were not insisted upon earlier. A document that is considered as correct in one Sub-registrar’s office is rejected as not correct in another Sub-registrar’s office. The Revenue department, the Department of the Inspector General of Registration, the Commissioner of Stamps and all the Sub-registrars are confused themselves and seem unable to guide the public.

The Karnataka Government by notification RD/174/MUNOMV/2005 dated April 23, 2005 had declared the transfer of certain properties as opposed to public policy and instructed the registering authorities not to register the properties detailed in the notification. Further, the Government of Karnataka clarifying certain points referred in its notification dated August 23, has only compounded the confusion, adding to the misery of the public and the stubborn registering authorities, leading to the unnecessary harassment of the public.

The two important points, that have affected registration are, the conversion of agricultural land to non-agricultural purpose and the approval of layouts. Agricultural land cannot be used for any other purpose, unless it is converted to non-agricultural purpose. Under Section 95 of the Karnataka Land Revenue Act, the Government recently introduced a ‘Single Window’ system for conversion of land.

Apart from conversion of land, the layout should be approved by the concerned authority. Thereafter the building too needs to be approved. Generally, the Urban Development Authority in the district is the approving authority for layouts.

But many layouts are approved by the city municipal councils, town municipal councils (TMCs), and village panchayats, which has led to low quality development works, causing heavy financial burden on the local boards and the resultant in-convenience to the people. The conversion of land for any purpose other than agricultural should not be in violation of the approved master plan, CDP proposals. As far as Bangalore and surrounding areas are concerned, there are various planning authorities which approve layouts. Each planning authority has a specified jurisdiction.

Approval of plans

Before we discuss planning authorities, we must understand the powers of various local bodies like the city corporations, municipal councils, TMCs and village panchayats, to approve building plans.

Constructions are permitted only on converted lands and approved layouts. Village Panchayats may approve building plans with ground plus one structure within their jurisdictional areas only. Gramathana sites have come under strict scrutiny and many Panchayat boards have mindlessly issued Forms 9 and 10 and any approval of building plans on such gramathana sites require extra precaution. The gramathana sites can be identified by referring to a village map at the Department of Survey and Settlement.

According to a new circular, such sites should be certified by the village accountant enclosing a rough sketch of the gramathana site indicating the exact location in the village map along with its boundaries.

If the gramathana site satisfies all these stipulations, the Government will not insist on conversion, and the village Panchayat may approve a building plan of ground plus one floor on such sites. However, it is very difficult to identify genuine gramathana sites as a lot of bogus documents are in circulation. City municipal councils, TMC and the BCC may approve building plans of ground - plus – three floors only. Any building plan in excess of ground – plus – one in village Panchayat areas and in excess of ground – plus - three floors in the areas under the city corporations and municipal councils needs approval from the town planning authorities.

Deemed conversion

As stated earlier, layouts can be formed only on converted lands. The Karnataka High Court, in its Judgment in BDA V/s Vishwa Bharathi House Building Co-operative Society (1992(1) LJ 523B (DB) ILR 1991 KAR 440 (DB) has held that all agricultural lands within the jurisdiction of a city corporation are deemed to be converted. But the Government has clarified that there is no such deemed conversion, but that the competent authority may grant a conversion order.

It is also clarified that though the betterment charges are paid to the concerned local authority, and the Katha is issued by the local authority, if such property comes under agricultural land earlier to payment of betterment charges, conversion of land to non-agricultural purpose is necessary under the provisions of Section 95 of the Karnataka Land Revenue Act (1964). Under such circumstances payment of betterment charges and the issuance of the Katha is not a conclusive proof of conversion.

Planning authorities

There are numerous planning authorities authorized to approve layouts in and around Bangalore. They are;

-> Bangalore Development Authority (BDA)
-> Bangalore Metropolitan Regional Development Authority (BMRDA)
-> Bangalore International Airport Planning Authority (BIAPA)

-> Ramanagarm – Channpatna Urban Development Authority (RCUDA)
-> Nelamangala Planning Authority
-> Magadi Local Planning Authority
-> Kanakapura Local Planning Authority
-> Bangalore Mysore Infrastructure Corridor Planning Authority (BMICPA)

Each planning authority has a specified jurisdiction. The jurisdiction of the BDA comprises the area under the BCC, surrounding city municipal and town municipal councils and village panchayats. All applications may be addressed to the Commissioner, Bangalore Development Authority, Kumarapark, Bangalore -20.

The office of the BMRDA is located at the LRDE building, Ali Askar Road, Bangalore, and has its jurisdiction on Bangalore urban and rural districts and Malur taluk in the Kolar district, except the areas covered under the BDA, BIAPA and other local planning authorities.

BIAPA also has its office at the LRDE building, Ali Askar Road, Opposite to Palace Guttahalli, Bangalore – 52, and has its jurisdiction over the proposed new airport and its environs. BMICPA has a jurisdiction over the small area of about 65 sq.kms comprising the Bangalore-Mysore Inter Corridor Area.

Other Planning areas referred above have a jurisdiction over respective towns and environs. Planning areas under the BMRDA is very vast, but infrastructure available in the BMRDA is not enough for speedy disposal of approvals, causing much delay. In other cases, not referred above, the respective urban development authorities like the Shimoga Urban Development Authority, the Bellary Urban Development Authority etc., have the jurisdiction to approve the formation of layouts, if the lands are situated in their geographical jurisdiction. There are 27 urban development authorities in the State.

Apart from these urban planning authorities, if land is situated in the areas under other planning authorities, the applications have to be referred to the Member Secretary of the concerned planning authority. There are 42 planning authorities in the state.

If properties are located outside the jurisdiction of the BDA, BMRDA, BIAPA, BMICPA, urban development authorities and the Member Secretary Planning Authority, applications have to be submitted to the Assistant Director, Town Planning.

Any development activity has to be approved by these planning authorities as per the provisions of the various laws and the local bodies have no authority to grant such permissions.

REFUSAL TO REGISTER THE DOCUMENTS

REFUSAL TO REGISTER THE DOCUMENTS

Registration of documents of immovable properties is compulsory according to Section 17 of the Indian Registration Act,1908 and Section 54 of the Transfer of Property Act,1882. However, there are certain circumstances under which the registering authority can refuse registration of documents. Both the Indian Registration Act, 1908 and the Karnataka Registration Rules, 1965, provide for refusal to register the documents under certain circumstances. The refusal could be on the ground of jurisdiction of the sub-registrar or for non-compliance of rules and procedure. Some of the grounds on which there could be a refusal by the sub-registrar to register a document are listed below:

1. The document is in a language not understood by the registering officer, or a language not commonly used in the district; and translated version of the same is not produced along with the document.

2. The document has corrections, alterations, erasures, interlineations blanks, which are not attested by the executant.

3. The description of the property is insufficient to identify and the document is not accompanied by a copy of the map, plan as required under the relevant provisions.

4. The document is presented after prescribed time limit.

5. The document is presented by a person who has no right to present it.

6. The executants or their authorized representative, assigns, agents did not attend to registration within the prescribed time.

7. The sub-registrar is not satisfied as to the identity of the person appearing before him as executant or he is not identified to the satisfaction of the sub-registrar.

8. The date of execution is not mentioned in the document or correct date is not possible to be ascertained or the date of execution is altered making it impossible to ascertain.

9. The Sub-registrar is not satisfied as to the right of person appearing as agent or representative or assignee.

10. The execution is not admitted by person said to have executed or his agent.

11. The person supposed to have executed the document is a minor, idiot, lunatic, not competent to contract.

12. In case where the executant is dead and the execution by such deceased person is denied by his representative or assignee.

13. In case of more than one representative of the deceased and when some of them admit the execution and others deny the execution, it will be treated as refusal and registration may be refused.

14. The death of the person who is supposed to have executed is not conclusively proved when the document is presented by his representatives or assignees.

15. The sub-registrar is not satisfied as to the fact of execution of Will presented after the death of the testator or donor.

16. The prescribed fee, penalty under any other law in force for time being has not been paid

Refusal Endorsement

If the refusal is on grounds other than denial of execution, the Sub-registrar is required to endorse the document “Registration refused” and also record his reasons in prescribed books. The person executing the document or any person claiming under such document may request the sub-registrar to provide him a copy of the reasons for refusal, which shall be furnished without unnecessary delay and no fee shall be charged. In this connection, Section 71(1) of the Indian Registration Act is relevant and is reproduced below:

“71(1). Every Sub-registrar refusing to register a document, except on the ground that the property to which it relates is not situate within his sub-district, shall make an order of refusal and record his reasons for such order in his book No.2 and endorse the words Registration refused on the document and on application made by any person executing or claiming under the document shall without payment and unnecessary delay give him a copy of the reasons so recorded. “

When a document is refused to be registered and endorsed accordingly, the recourse open to the aggrieved person is to file an appeal to higher authorities and orders thereon obtained.

APPEAL TO THE REGISTRAR [ Sec. 72]

When the registration of a document is refused on grounds other than want of jurisdiction or on denial of execution, the aggrieved party may appeal in writing to Registrar of the District or Officer in charge, District Registrars office, along with a copy of refusal order and the document. The appeal may be presented by the appellant himself or agent or through his advocate. The appeal shall be preferred within 30 days from the date of refusal order. If the document is in possession of some other person, other than appellant and requires time to present such documents the registrar will grant time.

Further, in cases where the sub-registrar is satisfied that the executant is deliberately keeping away to avoid registration or has gone to a distant place and not likely to return within prescribed time to admit registration, the sub-registrar may refuse to register the document treating the absence of the executant as denial of execution. In case the sub-registrar refuses registration for reasons of denial of execution the persons claiming under such document or their agents may appeal in writing to the registrar within 30 days of the order of refusal supported by a copy of the reasons for refusal and the document along with verification of the statements made in the appeal. as is done in the case of plaints. In the case of denial of execution, only the claimant under such document or his agents shall appeal and the application shall be duly verified. In other cases the appeal may be filed by the executant or claimant or his agent. In the case of refusal to register the Will after the death of the testator by the sub-registrar, the appeal can be filed by the executor of the will before the Registrar.

Enquiry of the Registrar

The Registrar will cause enquiry as to the execution of the document, compliance of the requirement under the various laws, payment of appropriate stamp duty etc. The Registrar may waive the requirement of enclosing a copy of the reasons for refusal to register a document by sub-registrar along with the appeal or application and decide the matter on merits either agreeing with the decision of the Sub-registrar or by reversing the decision of the sub-registrar. However, in respect of appeals filed on the grounds of insufficient details to identify the property, Registrar has no authority to call for further description of the property.

On being ordered by the Registrar for registration of the document in reversal of the order of the sub registrar, such document are required to be presented for registration within 30 days of such order. Upon such presentation of document for registration, the concerned sub registrar shall proceed to register such document. The registration of such document shall be operative from the date on which it was first presented for registration and refused and not from the date of actual registration.

Appeal against the order of the Registrar

The Registrar shall record his reasons for refusal and furnish a copy of such reasons to the appellant. There lies an appeal against the decision of the Registrar to the Civil Court within whose limits the Registering Authority’s office is located. Such an appeal is to be filed within 30 days of the Order of refusal by the Registrar.

PERSONS EXEMPTED FROM APPEARANCE AT REGISTRATION OFFICE

PERSONS EXEMPTED FROM APPEARANCE AT REGISTRATION OFFICE

Indian Registration Act 1908 has mandated that who should present the document for registration personally. The executant of a document or any person claiming under such document or representative or assignee of such executant or duly authorised power of attorney holder has to present the document for registration. These are detailed in sections 32 and 33 of the Act. Karnataka Registration Rules stipulates the document shall be presented for registration to the registering officer and not to a clerk or peon. In ordinary course, the registration or deposit of documents has to be made only at the designated office.

The Act also provides for exemption of certain people from personal appearance and presents the document for registration.

Section 31 of the Act gives power to the registering officer under special cases to attend the residence of any person desiring to present a document for registration or to deposit a will and accept for registration of such document or deposit of will.

Section 38 of the Act lists the category of persons who are exempted from appearance at registration office to present the document for registration. 1) Any person who is bodily infirm because of illness or age and cannot attend the office without risk or is inconvenience, 2) any person in jail under civil or criminal process or 3) persons who are exempt by law from personal appearance in court are exempted from personal appearance or through their agents. Persons who are exempted from personal appearance in court as per Civil Procedure Code are (1) Women who according to the customs and manners of the country ought not to be compelled to appear in public, persons of rank especially exempted by the government. In such cases the registering officer shall personally go to the house of such person or the jail where the person is confined and examine him or may appoint a person or visit and examine such person.

PROCEDURE FOR ATTENDING AT PRIVATE RESIDENCE

Karnataka Registration Rules 1965 has formulated procedure for attendance if the registering officer at Private residence. The relevant rules are detailed in chapter 10 and under Rule Nos. 56 to 32. Any application for attendance at private residence shall be in writing and has to be signed by the person who requests the attendance at his residence. Such letter may be presented by any person to the registering officer. The request has to be complied with as early as possible. If such attendance at private residence disturbs the regular routine of the office or requires closure of office and if the case does not fall under section 31 of the Indian Registration Act, a commission may be issued, which means another person other than the registering officer may be requested to attend the private residence and complete the registration formalities. The attendance of sub-registrar at private residence or issuing commission has to be reported to the registrar within 24 hours. The Sub-registrar shall not proceed out of his sub district for this purpose, but registrar may attend the private residence situated in his district though it may not be situated within the sub district under his immediate charge.

The commissioner appointed to attend the private residence will examine the witness and persons to give evidence and the registering officer will examine the commissioner personally in his office connected with discharge of his commission and voluntary nature of admission of execution.

During the course of attendance if the registering authority has to record the admission or execution of persons not exempted from personal appearance in the respect of the same document executed by a person exempted from personal appearance, the registering authority may comply with the request provided attendance fee is levied.

Government Officers

Section 88 of the Act refers to documents, which are executed by government officers or certain public functionaries who are exempted from personal appearance.

Any officer of the government, any administrator general, official trustee or official assignee, the sheriff, receiver or registrar of High Court, any holder of such other public office as notified in the official Gazette of the state government are exempted from personal appearance or through their agents at registration office in connection with registration of any instrument executed by them or any document executed in their favor in their official capacity. They are also exempted from signing the document for admitting the execution as required under section 58 of the Act.

When documents are forwarded by government officer with a covering letter stating that documents executed by him and be registered, the covering letter will be sufficient to satisfy the genuineness of the signature of the expectant. If such document is presented by a private party, who is also a party to the document, the registering authority will satisfy as to the genuineness of the signature by a brief inquiry. The fact of exemption from personal appearance and presentation of the document by covering letter will be endorsed.

Only Copies to be sent

Certain category of documents like copies of orders, certificates and instruments need not be presented for registration but may be sent to the registering office for filing as per section 89 of the Act. In following cases, the copies have to be forwarded to the Jurisdictional registering officer under whose jurisdiction the immovable property in question is situated.

Every officer granting a loan under Land Improvement Loans Act 1883. Every court granting a certificate of sale of immovable property under Civil Procedure Code, 1908.

In case of loans under Land Improvement Loans Act 1883, the details of any land to be granted as collateral security.

Every officer granting a loan under Agriculturists Loan Act 1884, a copy of the document whereby the immovable property is mortgaged to secure the repayment of the loan or if such property is mortgaged for the same purpose in order granting the loan, a copy of such order.

Every Revenue officer, who grants a certificate of sale to the purchase of immovable property sold in public auction.

The registering officer will file the copies of such orders, certificates, and instruments in book No.1. The concerned officers need not appear in person at registration office.

State government has made rules as to the mode of making copies and manner of filing copies.

ADJUDICATION OF MATTERS CONCERNING PAYMENT OF STAMP

ADJUDICATION OF MATTERS CONCERNING PAYMENT OF STAMP

ADJUDICATION means a decision which is rendered by a competent authority or a judge on disputed or disagreed issues.

It is often disputed or disagreed in the matters of stamp duty payable by persons seeking registration of certain instruments.

In spite of clear description of changeability of stamp duty under the various Articles of the Karnataka Stamp Act, disagreements between executants and the registering authority and also certain doubts do enter into the minds of person wanting to register.

In order to remove such disagreements or doubts, any person is empowered under the provisions of the Karnataka Stamp Act 1957 to adjudicate the issue or seek the opinion of the District Registrar/ Deputy Commissioner as to proper stamp duty to avoid complications like, under-valuation and penalty at later stage.

The Registering authority himself is also empowered under the Act to make a reference to the Deputy Commissioner / District Registrar for determination of the stamp duty on the property in case of disagreements or disputes arise where the person is declined to pay the stamp duty set forth by him. As provided under the Act, any instrument which is either executed or not and previously stamped or not can be brought to the District Registrar / Deputy Commissioner to have his opinion as to the Stamp Duty with which it is chargeable.

For doing so, the person should make an application with a fee of Rs.100 and also furnish an abstract of the instrument and an affidavit or other evidence as would support his claim on set forth value or such duty to be determined by the District Registrar.

Admission

On receipt of such application along with fee, abstract of the instrument or other evidences, the Deputy Commissioner/District Registrar having satisfied in all respects, shall make his best judgment to determine the stamp duty to be payable or decide that the duty claimed by the person suffices the correct description of chargeability or else decide that the stamp duty already paid is equal to the duty so determined by him or in his opinion, such instrument is not chargeable. After satisfying the case, the Deputy Commissioner / District Registrar shall certify the endorsement on such instrument accordingly and appropriately.

It is also provided that the District Registrar/Deputy Commissioner may also refuse to proceed in this Adjudication, if the person does not fulfill the conditions stipulated therein.

The provision of the Act provides that no evidence furnished in pursuance of this adjudication shall be used in any civil proceedings against any person except in any enquiry relating chargeability of stamp duty. Further, every person by whom any such evidence is furnished shall, on payment of the full stamp duty which is commensurate with the chargeability of the instrument, be relieved of penalty for his omission.

Endorsement not empowered

However, the Deputy Commissioner/District Registrar is not empowered under the provision of the Act to give endorsement on the instruments of the types hereunder brought to him.

a) After expiration of one month from the date of its execution or first execution in India.

b) Executed or first executed out of India and brought to him after expiration of three months after it has been first received in the State of Karnataka.

c) Or any instruments chargeable with duty not exceeding fifteen paise or a mortgage crop with a duty of twenty five paise when brought to him after the execution there of, on paper not duly stamped.

Reference for decision

It is also provided under the Act that even the Deputy Commissioner / District Registrar is enabled to refer his own decision in pursuance of this adjudication, in case of his doubt about the chargeability of stamp duty, to the Chief Controlling Revenue Authority who will also give his decision therein. More so, the Chief Controlling Revenue Authority, is also empowered suo moto within five years from the date of order passed by the Deputy Commissioner/ District register, to call for and examine the records relating to such order passed by Deputy Commissioner / Registrar after examining records and hearing the parties, pass an order in writing confirming, modifying or setting aside such order and direct the Deputy Commissioner / District Registrar. Again, the Chief Controlling Revenue Authority can refer its opinion to the High Court of Karnataka for a decision.

Generally, the Sub-Registrar is under duty and obligations to accept the instruments for registration after observing all formalities. In cases where the registering authority is deemed to have set forth the stamp value which, according to the person wanting to register, is more. The person aggrieved can definitely approach the Deputy Commissioner/District Registrar, with application, fee and other documents, for appropriate relief.

YOUR HOME IN AN APARTMENT

YOUR HOME IN AN APARTMENT

The apartment culture is of recent origin and has become very popular. This type of group housing is not alien to the human culture. Earlier people used to live on riverbanks in groups sharing common facilities.

In the early twentieth century it was known for such group housing but in a different manner. Group housing popularly known as “Vatara” was very common where small dwelling units were constructed in a single compound and families lived in perfect harmony and unison. The Vatara, used to be horizontal or L shaped with single storey buildings whereas the apartments are vertical with multistoried buildings.

In Bangalore in the early seventies, the first Apartment constructed was Shalimar Apartment. In the early eighties Apartment culture began to show its presence in Malleshwaram. Apartment Culture is rapidly picking up.

Advantages

Flats have certain advantages when compared to independent houses. Community living offers security and certain amenities and facilities, which an individual cannot afford and which can be shared with other occupants as common facilities at minimal cost. Facilities like gym, recreational center, swimming pool, sauna; Jacuzzi, full-fledged security, clubhouses, sports and games come at nominal cost. Generally Apartments have Owners Residents Association, which attend to the problems of the residents and carryout repairs.

The purchaser of a flat need not worry about issues like obtaining plan sanctions, finding a contractor, supervising the construction, getting water, power, sanitary connection and other related formalities, which the Developer takes care. Purchaser may have the interior done according to his needs on payment of some additional fee.

Sanctioning Authority

With respect to sanctioning of plans, various approving authorities have powers with some restrictions. The village Panchayat cannot approve a plan of a multistoried building; High Rise Building Complex or a Building more than 8000 sq.ft of land and any building plan exceeding the prescribed height has to be approved by Town Planning Authority. It must be kept in mind that any massive violation of the sanction plan will face the threat of demolition of the building at the future date.

It is also necessary to ascertain whether the building has complied with the Floor Area Ratio (FAR), that is, total built up area permitted on the plot with prescribed setbacks vacant space that is to be left around the building.

Financial institutions are currently offering long-term loans at a very low interest rate. Housing finance companies and banks also prefer financing the flats as multiple beneficiaries live in a single compound and it would be easy for them to follow up and they need not spend much on legal formalities.

Any high rise structure should have clearance from BWSSB, BESCOM, Fire force, Telephone department, Pollution Control Board and also from the Airport Authority of India.

Process of Purchase

The purchaser of a flat has to take into account the location of the flat, its proximity to civic amenities and also select the builder according to his track record. It is always advisable to visit some of the projects completed by the builder before booking a flat.

Verification of the title of the property is one of the important aspects of purchase of property. Though the builder provides legal certificate from their advocate, the purchaser should always independently get the title verified by his own Advocate. Only advocates with a minimum of 7 years of experience are eligible to issue legal opinion for the apartment to the Developer as per the Karnataka Apartment Act.

If the property is sold by a general power of attorney holder, verify the terms of GPA and whether the owner who has given the GPA is surviving or not, should also be checked.

Validity of the GPA, Joint Venture and other Title deeds are most important factors that should be kept in mind. Agreement with the developer should contain the ownership details, sale price, payment schedule, Specifications of the construction, car parking details, undivided share of land, common amenities, Penalty clause for both parties, what are the other deposit charges to be deposited, Registration charges, whether Sales Tax is applicable or not, any other expenses etc., should be mentioned in the Agreement. Further, it must also contain the layout plan, sketch of your portion of the apartment, with specifications, date of commencement of construction work, date of handing over of the apartment, penalty for delayed construction and payment defaults, no escalation clause, guarantee for the quality of construction and construction materials used.

Conveyance/Sale Deed

After completion of the apartment construction the sale deed should be executed by the vendor of the land and the Promoters jointly as per the understanding. The sale deed must also mention the duties and responsibilities of the buyer and the seller, the purchaser has to pay the required stamp duty and complete the registration formalities. Registered sale deed is the main document that confers on you the ownership of the flat. On the basis of the sale deed the Revenue authority issues documents of title like the Khatha Certificate, Khatha Extract and Tax paid receipts.

Price of a flat is determined, based on the various factor like location, specification of the work, carpet area and percentage of Super Built up Area.

Undivided Share of Land

When you purchase an apartment you are entitled to an undivided share in the total land area. The undivided share depends upon the built up area of the apartment and the land area. As the total built up area increases the undivided share decreases and vice versa.

Share Certificate Method

Purchase of the flat by share certificate method is very popular in Maharashtra. A registered Co-op. Societies acquires land, constructs flats which are allotted to its members; whereas in Karnataka, the share certificate method is not accepted by general public, financial institutions, State Government, etc. Karnataka Government is of the view that individual flats should be registered by regular conveyance. When tracing the title of this type of share certificate method, verification of the society record, its byelaws and share certificates is very important.

Super Built-Up Area

You must also know what certain areas are called with reference to a building. From the floor area ratio and site area, we can work out the total constructed area. Plinth Area is the total area of construction. This includes all the floors as well as the wall thickness. Carpet area is the area inside the constructed building between the walls and the area actually usable. Super built up area is the salable area generally applicable to apartments. This includes the wall thickness, projected common areas and the set back area. Some promoters will adopt certain methods to arrive at more Super built up area to reduce the sale price. The purchaser should be very cautious about the Super built area, on which the price of flat is determined. Super built up area consists of actual flat area plus proportionate area of common areas like staircase cum verandah, balcony and other common areas etc. Carpet area is the area available for actual residing. Generally super built up area should not be more than 25% of the carpet area.

Apartment Owners’ Association

After the construction and handing over of flats, the owners of apartments form an association to take care of the needs of the residents and to upkeep of the common areas. The builder must hand over detailed drawings of electrical wiring, piping and drainage system to the association. The builder must also hand over to the Association all the original Documents of Title and Sale deed including plan, drawings etc., as without proper drawings, it would be difficult for the association to maintain the apartment building.

DUTIES OF A FLAT PROMOTER

DUTIES OF A FLAT PROMOTER

In order to regularize the promotion, construction, sale, management and transfer of ownership of flats, the Karnataka Ownership flat (Regulation of the promotion of construction, Sale, management and Transfer) Act 1972, was enacted by the Government of Karnataka. The Act popularly known as Karnataka Act 16 of 1973 was first published in Gazette Extraordinary on 23.07.1973, received the assent of the president on 29.06.1974, and came into force on 01.04.1975, as per notification No.FD/KHB/75 dated 06.03.1975. The Act details the rights and responsibilities of promoter and purchaser of flats.

A flat is defined in the Act as “a separate and self contained set of premises used or intended to be used for residence, or office, or shop, or go-down, and includes a garage the premises forming a part of a building”.

Promoter is a person who constructs or causes to be constructed a block of building of flats or apartments for the purpose of selling some or all of them to other persons or to a company, co-operative society or others.

Thus a promoter need not construct a flat. He may get them constructed through another builder. Such construction is for selling some or all of the flats. Since he receives advance amounts from proposed purchasers and will be in possession of the land not owned by him, the Act prescribes certain obligation on promoter.

GENERAL LIABILITIES

Section 3 deals with the general liabilities of promoter. The promoter has to disclose the nature of his title to the land on which the flats are constructed. Such title has to be duly certified by an advocate who has standing practice of not less than seven years. He shall produce the original documents of his title to the property. Advocates certificate of his title, encumbrance certificates, documents relating to the title, the plan and specifications of building proposed, before the intending proposer. Some of the promoters refuse to give copies of the title documents to the proposed purchaser which is against the law and not ethical. He has to allow inspection of plans and specifications of the property of the building approved by local authority, disclose the nature of fixtures, fittings, amenities including provisions for lift. If the promoter himself is the builder shall disclose the prescribed particulars of design and materials used for building. If the promoter is not the builder, he shall make available for inspection all agreements entered by him with architects and contractors related to design and materials used for construction.

Promoter has to prepare and maintain a list of flats with their specific numbers and names and complete address of persons who have agreed to purchase flats with consideration amount charged and terms and conditions on which flats are sold and shall inform the proposed purchaser in writing the date by which the possession of the flat will be given.

He has the responsibility of informing in writing the nature and constitution of organization to which title being passed with terms and conditions.

He should not allow persons to enter and take possession of flats until completion certificate wherever required is obtained from the competent authority. He is duty bound to disclose the full outgoings including ground rent, municipal taxes, tax on income, water and power charges and any subsisting mortgage. If the purchaser demands, he has to furnish the true copies of all documents of title, advocates certificate, encumbrance certificates/documents, approved plan and specifications, list of furniture, fixtures, amenities, list of flats with numbers with the name and address of proposed purchasers, the price at which the flats are sold and also terms and conditions of such sale, provided the purchaser pays the charges for such copies.

AGREEMENT

The promoter may receive the advance amount not exceeding 20% of sale price, but before accepting such advance, he has to enter into an written agreement with the purchaser and such agreement shall be registered. The sale agreement should contain the complete details of the building to be constructed, and promoter obligation to comply with the approved plans and specifications, the date by which the possession will be handed over, the agreed consideration and mode of payment of the consideration, nature of owners’ organization proposed, details of common areas, facilities including limited common areas and amenities, and percentage of undivided interest. But most of the agreements are one sided in favor of promoters/builders. The copies of advocates certificate and plan and specification of the flat to be sold has to be enclosed to the agreement.

Promoter as trustee

The promoter receives various amounts from flat purchasers like advance, deposits, towards share capital to form the society, or company, ground rent, water and power charges, taxes. He shall maintain a separate account of such advances and deposits in any bank. He shall hold such money as a trustee and disburse the moneys towards the intended purposes.

The promoter who is in possession of flats shall pay all outgoings on flats until he transfers flats to persons who have purchased or to an organization of such persons.

Changes in plans and specifications

After the approved plans and specifications are disclosed / furnished to the proposed purchaser, any alterations in the structure of any particular flat shall be done only with the prior consent of the proposed purchaser.

If any alterations have to be made in the structure of the building the consent of all proposed purchasers is required. The building shall be constructed in strict conformity with the approved plans and specifications.

Any defect in the construction of the building, materials used in the construction or unauthorized change in construction has to be brought to the notice of the promoter within a year of taking possession, and the promoter shall wherever possible rectify such defects free of cost. If rectification is not possible the aggrieved person is entitled to receive reasonable compensation. State government will designate an officer not below the rank of Superintending engineer to settle the disputes in connection with defects, reasonable compensation and rectification. The aforesaid person may approach such designated person within two years of taking possession on payment of specified fee (Rs.100). The decision of such officer shall be final.

Delay in handing over possession

The promoter has to handover the possession of the flat on to the agreed date. Such date may be extended on agreement. The promoter may also not in a position to handover the possession of the flat for reasons beyond his control.

If the promoter fails to deliver the possession of flat on the agreed or extended date and by another three months thereafter of such agreed extended time the proposed purchaser may claim refund of the amounts paid.

Similarly in case of non delivery of flats on account of reasons beyond the control of the promoter, and if such reasons exists after three months from the agreed date of handing over possession, the proposed purchaser may claim refund of the amounts paid.

In both the cases the promoter shall refund the amounts received with simple interest at 9% p.a. from the date of receipt till the date of payment. Such amounts and interest shall continue to be a charge on land and flat but any earlier encumbrances have priority.

MORTGAGE

The promoter shall not create any mortgage or charge on the flat or land after the execution of the agreements without previous written consent of proposed purchaser. Any mortgage / charge created without previous written consent of proposed purchaser shall not affect the right and interest of proposed purchaser.

Formation of society or company

The promoter has to take steps to form society or company consisting of owners. The promoter shall submit an application to the registrar for registration of organization. Such application shall be submitted within four months from the date on which minimum number of persons required to form such society or company have taken flats. The promoter shall represent the flats which are unsold.

If the owners opt to submit to the provisions of Karnataka Apartment Ownership Act 1972, by submitting a deed of declaration, the promoter shall inform the registrar of co-operative society as soon as possible after the date of which at least five owners have filed the deed of declaration.

Conveyance of title etc.

The promoter shall take steps to complete his title and convey to the organization, which is registered either as co-operative society, or company or association of flat owners, his right, title and interest in the land and building as per the agreement. If the agreement provides no definite date for conveying the title to the organization/society, he shall convey his title within four months from the date of which the organization was registered and association of owners is duly constituted.

The promoter will be very co-operative and extend red carpet treatment to the prospective purchasers at the time of entering into an agreement and receiving advance money, thereafter it would be very difficult to meet any important person at promoters office and the purchasers will be at the mercy of receptionist.

COMMENCEMENT AND OCCUPANCY CERTIFICATES

COMMENCEMENT AND OCCUPANCY CERTIFICATES

The Completion Certificate and Occupancy Certificate from the Planning authority are essential for any construction as per the provision of law. These certificates evidence that the Commencement and Completion of the building are as per the approved plan and in compliance of Locals laws. Every body heard about the word Commencement Certificate and Occupancy Certificate.’ But practically, most of the persons who are the owners of the buildings have not at all seen how the Commencement Certificate and Completion Certificate will be. The Commencement certificate is one of the most essential documents for the Apartment Construction. Only a few builders who are developing the mega projects are obtaining Commencement and Completion Certificates. Generally, for small Apartment owners, getting completion certificate is not possible because of the deviation and violation in the building construction. Some of the financial institutions and MNCs tenants are insisting on the Commencement Certificate and the Completion Certificate from the owners of the building.

COMMENCEMENT CERTIFICATE:

After the approval of the building plan, the owner shall give notice to the authority of the intention to start work on building site in writing. Further, the owner shall give notice to the authority on completion of foundation or footings before erection of walls on the foundation. Within 15 days from the date of receipt of such notice, the Engineering wing/authority shall inspect the site to verify as to whether the foundation work for the building conforms to the sanction plan or not. If the foundation work is according to the sanction plan, the authority will issue commencement certificate within the prescribed period from the date of the inspection. In any case, the construction shall be proceeded according to the sanctioned plan as if the permission for the commencement of the work is deemed to have been accorded.

Further, the authority will verify as to whether the building has been constructed in all respects as per the sanctioned plan of the building, complied with Building bye-laws, including other relevant permissions or clearances obtained from the other departments. If everything is in order, Engineering Department will issue the Commencement certificate.

OCCUPANCY CERTIFICATE:

Problems with respect to issuance of Occupancy Certificate arises on account of violation of Building laws, such is almost 95% of buildings in Bangalore facing the problem. Though common people have spent their hard earned money on the project with a dream of owning a house, they are unable to get the occupancy certificate because of the deviations in construction of the building. Whereas, the Builders having a good connection, escape through various loopholes in law and extended their salable area.

DEVIATIONS AND VIOLATION:

Wherever any construction is in violation of the sanctioned plan, the Commissioner may, if he considers that the violations are minor viz., only when the violations are within 5% of (1) the minimum set back to be left around the building (2) the maximum plot coverage (3) permissible floor area ratio and maximum height of the building and that the demolition under the Act is not feasible without affecting the structural stability, regularize such violations by issuing sanction of the modified plan with a levy of suitable fee to be prescribed. The Commissioner shall come to such conclusion only after recording detailed reasons for the same. Violations under the provision shall not include the buildings which are constructed without obtaining any sanctioned plan whatsoever and also violation, which are made inspite of the same being specifically deleted or rejected in the sanctioned plan.
CONSEQUENCE OF DEVIATION:

In general, builders and occupants are not much bothering about the Commencement Certificate and Occupancy Certificate. It is advisable to insist for the Completion certificate from the builders. Only after the receipt of completion certificate, the title will be perfected. However, the officials are not bothering at the time of construction and they would not issue the completion certificate even after completion of the building. People in Bangalore in general are not bothering about the completion certificate.

However, certain cases of demolition of unauthorized floors, deviations were happened very recently at Brigade Road Street and Richmond Street, in Bangalore.

Deviation is a vicious circle, which only the government can break. Government must initiate immediate remedial action to stem the root. The authorities shall not be very rigid in granting completion certificates. If the builder has deviated a little more than the allowed percentage, the authorities may impose the huge penalty and regularize the building.

COMMON EXPENSES AND MAINTENANCE OF APARTMENTS

COMMON EXPENSES AND MAINTENANCE OF APARTMENTS

Apartment culture in Bangalore has gained popularity due to several factors and presently there are a large number of apartments built within the city and on the outskirts of Bangalore.

The unique feature of apartments is that the owner of an apartment will enjoy his property subject to several restrictions though he shall be entitled to the exclusive ownership and possession of his/her apartment. He/She will not get absolute right over the land on which the apartment building is constructed, but only gets an undivided share in the land. Every apartment owner has to utilise the common areas and the common facilities like use of stair case, elevators, fire escapes, basements, swimming pool, recreation centre, community hall, play rooms, etc., in co-ordination with the other apartment owners/occupants and has to make additions, alterations and repairs to his apartment only with the consent of the apartment owners association and in accordance with the provisions of the bye-laws or guidelines of such association. Further, the foundation, columns, girders, beams,etc., of an apartment building are common and hence they are to be protected with care. In apartments, the owners have always keep in mind the philosophy of LIVE AND LET OTHERS LIVE.

Apartment Act

To regulate the activities of apartment owners in possession and enjoyment of their apartments, State Governments have enacted and made applicable in their States the Apartment Ownership Act and rules. The State of Maharashtra was first to enact “The Maharashtra Apartment Ownership Act 1970, which has come into force with effect from February 19, 1971. The Karnataka Apartment Ownership Act, 1972, was published in Karnataka Gazette extraordinary on 23.07.1973 and came into force from 01.04.1975.

Before proceeding further it is worthwhile to know the definitions of Apartment, building, property, and Flat.

Apartment is defined in Karnataka Apartment Ownership Act, 1972, as “a part of the property intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floor (or parts thereof) in a building intended to be used for residential purposes and with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway”.

This Act defines Building as a building containing four or more apartments or two or more buildings each containing two or more apartments with a total four or more apartments of all such buildings and comprising a part of the property.

Like various commonly used words having different meaning the word “property” also has a distinct meaning in the Karnataka Apartment Ownership Act. This includes land, building all improvements and structures thereon, allowed in freehold or held on lease or as a occupant under any law relating to land revenue and all easements, rights, appurtenances belong thereto and all articles of personal property intended to use in connection with which have been or intended to be submitted to the provisions of Act.

According to Karnataka Ownership Flat (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972, “Flat” is defined to mean a separate and self contained set of premises used, intended to be used for residence or office, or showroom or shops or go down (includes a garage) the premises forming a part of a building.

Common areas and facilities

The unique feature of apartments is the utilization of the common areas and facilities by the apartment owners which are to be shared by all the apartment owners since none of them will have an absolute ownership or beneficial right over the common areas and common facilities. These areas and facilities include the land on which building is constructed, foundation, columns girders, beams, supports, terrace, corridors, lobbies, stairs, fire escapes, entrances and exits of the building, basement, cellars, gardens, storage spaces, the premises, generators, installations of central services like power, light, gas, hot and cold water, heating, refrigeration, air conditioning, incinerating, elevators, tanks, pumps, compressors, ducts,etc. and in general all apparatus and installations existing for any common use. Further,the community halls and commercial facilities available within the precincts of the apartment building which are necessary for enjoyment of the apartment owners are also considered as common facilities. All such common areas and facilities are to be mentioned in the deed of declaration to be registered with the jurisdictional sub-registrar.

To maintain these common areas and to provide the common facilities, money is needed. Every apartment owner has to contribute his/her share in the common expenses calculated on the basis of the super built area of his apartment which is to be paid regularly by all the apartment owners without default. As per section 19 of the Karnataka Apartment Ownership Act, 1972 all unpaid common expenses shall constitute a charge on such apartment prior to all other charges, except the charge, if any, on apartment for payment of government and municipal taxes and all sums unpaid on a first mortgage of the apartment.

According to the Karnataka Apartment Ownership Act, “Common expenses” means (a) all sums lawfully assessed against the apartment owner by the Association of apartment owners; (b) expenses of administration, maintenance, repair or replacement of common areas and facilities; (c) expenses agreed upon as common expenses in bye-laws; and {d} expenses declared as common expenses by the provisions of the Act or by the declaration or the bye-laws.

As the common expenses are liable to be shared there could never be any loss. On the contrary, there are chances of surplus fund which is known as common profits. Common profits means balance of all income, rents, profits, and revenues from common areas and facilities remaining after deduction of common expenses.

Deed of declaration

If any apartment owner wants to be governed by the provisions of the Karnataka Apartment Ownership Act, he shall execute a deed of declaration of apartment under the Act, which is to be registered with jurisdictional sub registrar. Deed of Apartment contains description of land on which the building is constructed, whether the land is freehold or leasehold, complete description of building, mentioning the number of floors, basement number of apartments and principle materials of which it is constructed, number of each apartment, location, area, number of rooms, immediate common area to which it has access and any other data relevant for proper identification, description of common areas and facilities, value of the property and of each apartment, percentage of undivided interest in common areas and facilities for each apartment, name of the owner, voting rights, method by which the declaration may be amended etc.

Separate assessment

Each apartment with its percentage of undivided interest in the land, super built up area of their flat. common areas and facilities will be deemed as separate property for assessment of tax on land and building. Likewise association also will collect the maintenance charges proportionately to their super built-up area, generally Rs.0.50 to 2.00 per sqft. maintenance charge will be there depends on the facilities and maintenance expenses.

Status of apartments

Each apartment together with its undivided interest in land and common areas constitute a heritable and transferable immovable property. Accordingly the apartment owners may transfer their apartments with the undivided interest in land, common areas and facilities by way of sale, mortgage, lease, gift, exchange or in any other manner. The apartment owner may also make bequest of the same under law applicable to transfer and succession of immovable property.