Deemed Conveyance – Maharashtra Ownership Flats Act, 1963

What is “Deemed Conveyance” – For proper understanding of “deemed conveyance” we need to analyze the two words separately. Literal meaning of “Deemed” is “to believe / to consider” and is slightly different from “actual / true”. Conveyance means to transfer ownership right and / or interest in fixed (immovable asset). Now these two words put together stand for “ transfer of ownership rights, interest in a property in such a way which is not real or true but is considered / adjudged to be true.”

Regular Conveyance Vs. Deemed Conveyance – In case of actual / true conveyance the ownership rights, title and interest in immovable property is transferred by the “owner / transferor” in favor of the “transferee” by executing “Conveyance Deed” against valid consideration. Whereas in case of “deemed conveyance” such conveyance deed is signed on behalf of the transferor by the appropriate authority after legal intervention. This provision has been incorporated by amending the “Maharashtra Ownership Flats Act, 1963”

Reason and Procedure for Deemed Conveyance – The developers / builders, landowners delay the conveyance of land and building in favor of the society formed by the buyers of flats in a housing complex, apartments. They do so with the intention to enjoy the future benefits such as additional Floor Space Index (FSI), development rights etc. To safeguard interest of the purchasers of flats in such housing complexes / apartments it is provided in the said act that Sale agreement has to be registered against payment of 20% of total consideration for booking flat, occupation certificate to be provided after completion of the formalities, society to be formed within 4 (four) months of sale of minimum number of flats, conveyance of land and building to such legally formed body within 4 (Four) months of such formation. Failure on part of the builder / developer to abide by the aforesaid provisions would make them liable to be prosecuted for criminal offence and the provision of Deemed Conveyance will be invoked.

In case of reluctant builders, land owners to transfer the land and building to the society after expiry of 4 months from the date of it’s formation, the said land and building is deemed to have been transferred to the legally formed body (Society) by a competent designated authority i.e. District Deputy Registrar. The aggrieved buyers (flat owners) apply to the designated competent authority, who hears and decides the matter. If the said competent authority is satisfied, it passes an order in favor of the society. After such order is passed the society prepares an unilateral conveyance deed and along with the order submits the same to the designated authority for execution and registration. The said competent authority executes the conveyance deed on behalf of the erring builder / land owner. The said authority communicates to the sub-registrar to register the conveyance deed against payment of appropriate stamp duty and registration charges.

Appeal against “Deemed Conveyance” – There is no provision to appeal against the order of “Deemed Conveyance” in any court except Hon’ble High Court and / or Hon’ble Supreme Court where aggrieved parties (developers / builders / land owners in such cases) can file Writ petition under Article 226 of the Constitution of India.

Conditions for “Deemed Conveyance” –

  1. Minimum of 60% of the flats constructed in the complex are sold.
  2. A co-operative society or Association of flat owners has been formed and at least 4 months have passed since formation of such association / co-operative society.
  3. There must be communication between the builder / developer / land owner and the society / association in this regard, wherein the builder / developer / land owner has promised to convey the land and building in favor of the society and has failed OR has refused to do so.

Advantages of “Deemed Conveyance” –

  1. Property becomes free and marketable even without regular transfer by the owner, builder.
  2. Society can raise funds for repairing and reconstruction of the building / apartment by creating charge over the property.
  3. Proper and legal title is obtained in the name of the society.
  4. Flat owners (members of the society) become entitled to compensation from the builder on redevelopment of the building

indianpropertylawyersThis article is contributed by IndianPropertyLawyers.com, simplifying property legal services. Kindly do post your comments and queries below.

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