As the property market is reckless, selling a residential apartment can be difficult. But certain factors like location, apartment design, and public transport can influence people to buy a property. This all factors are generally considered by a buyer, but the only factor which can ruin the deal is the existing home loan.

Below is an example which can help an individual to sell his/her property.

Dinesh Sharma purchased a 2BHK house in 2017. He chose to sell his estate in 2019 because he wished to purchase a 3BHK unit in a project close to his office. On his current estate, he has an outstanding house loan and the original estate papers are with the bank.

Can he sell his property with the home loan?

Yes, the property can be transacted by an individual that has made use of a home loan. The sale transaction, however, provides that the owner obtains NOC or the lender’s approval to this sale transaction.

How to sell a house with an outstanding home loan?

A property may be sold after the approval or consent of the lender is obtained. “This must take place in such a way that portion of the sale consideration is paid straight to the lending bank or the lender and the rest (if any) is paid to the current owner (seller).

The original title deed of the estate registered with the lender bank at the time of the loan disbursements shall be released to the seller/current owner after completion of the total loan consideration is been paid.

The original title deed is usually released by the lender, the registration of the sale deed and the discharge of the sale consideration simultaneously,” describes Niraj Kumar, an associate of DSK Legal.

What all things to be considered by the buyer/seller?

You can buy a mortgaged property, if you are getting better value for money or if you like the place or if you are receiving a fully furnished house without additional cost.

“It is advisable for the customer (an individual or a legal entity) to verify that the original title documents, mutation records, encumbrance certificate, and a litigation investigation on the property to confirm whether the possession is in favour of the current owner,” Kumar said.

Kumar adds: “The seller shall also review documents which verify the ability and accessibility of the buyer to transact the estate, and also sources of funding used to buy the estate.”

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The law on document registration is provided in the Indian Registration Act. This Act offers for the registering of multiple papers, to guarantee retention of proof, fraud avoidance and title assurance.

Law of Registration Act:

According to Section 17 of the Registration Act 1908, all operations involving the sale of land that exceeds Rs100 should be registered. This implies that all sales of real estate transactions must be registered, as no real estate can be bought for Rs 100. Furthermore, all transactions in relation to gifts of a real estate and rentals of more than 12 months also require the registration.

When a party cannot reach the department of the Sub-Registrar in specific cases, the Sub-Registrar can place any of its representatives at its home to take documents for registration. The word ‘immovable property’ involves land, buildings and all rights associated with them.

Types of Documents required for Registration:

The registration of the property documents is to be made available to the office of the Sub-Registrar of Assurances, within whose jurisdiction the property, which is the subject matter of transfer, is situated. In order to register documents, the authorized signatories must attend the seller and the purchaser together with two witnesses.

The signatories should hold their proof of identity. The documents accepted for this purpose include Aadhaar Card, PAN Card or other governmental evidence of identification. If they represent someone else, the signatories must also grant the power of authority. If a company is subject to the agreement, the representative of the company must bring appropriate documents, like power of attorney/letter of authority, along with a copy of the resolution of the company’s board, authorizing him to carry out the registration.

Including original documents and evidence of payment of the stamp duty, you must also submit the property card to the sub-registrar. The Sub-Registrar shall check before registering the documents that the estate has paid adequately for the stamp duty, according to the stamp duty ready reckoner. The registrar shall refuse to register the documents if the stamp duty is inadequate.

Time-frame and Fine in case of any Delay:

The documents to be registered compulsorily should be submitted, along with the specified fee, within four months of the date of their execution.

In the event that time has expired you may apply for condonation to the Sub-registrar for the delay, within the next four months and by payment of a fine that may be 10 times the fee for original registration, the Registrar may approve to register such documents. Property documents are registered at a premium of 1 per cent of the property value, subject to a max of Rs 30,000.

In the past, after a span of six months, the documents submitted by you would be returned. However, the documents (including registry number and evidence that the documents are registered by the registrar) are scanned and returned on the same day in the case of computerization of the sub-registrar’s departments.

The consequence of non-registering any property:

If the purchase agreement for an estate is not registered, you may be at enormous risk. Evidence cannot be accepted by any court of law if a document that is mandatorily needed to be registered but is not registered.

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Brokerage issues can now be covered in the context of a recent change in the regulations that were given by the housing department on June 6 by the Maharashtra Real Estate Regulatory Authority (MahaRERA).

Marketing and brokerage following the sale of flats shall not be covered by the price of developing or constructing a project, the recent amendment says. Such expense, however, should not be covered by the amount to be deposited on the specified separate account, meaning that a broker can contact the authority if his brokerage is due.

Each promoter has to keep a separate account to deposit cash to be used in project development. The cash in this account is only to be used for building and project development purposes. This means that money cannot be diverted for any other things like marketing, real estate observers clarified.

The Notification further reads, “If the transaction between the promoter and the allottee is being made possible by a Registered Estate Agent, any amount (including taxes) agreed to as a remuneration / fees / commission / brokerage charge for that registered real estate agent shall be paid, if applicable, by the promoter / allottee / both, in the case of the transaction under this Agreement, in accordance with the agreed terms of payment.”

The choice to remove advertising and brokerage costs from development costs while developers are apprehensive is a nice step from a consumer point of perspective, but also implies it can have an effect on the rates for the end-users.

Real estate industry says that a project consists of the cost of advertising, marketing, and brokerages and this should ideally be a part of the project cost.

One of the Real estate agents said, “We are confident that we will lastly be paid our dues by RERA covering brokerage. We had also suggested the standardization of Brokerage charges, which still has to be authorized”.

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How will you feel when you see your future flat blueprint to be great but in real builder doesn’t fulfil all the said commitments? As a buyer, you will feel cheated right? A similar kind of case happened at Goregaon East where a Residents of a 31 storey tower have sought intervention from the housing regulator Maharashtra Real Estate Regulatory Authority in their dispute with VGS Realty Construction Pvt Ltd, a group company of Omkar Developers. The residents claimed that the builder had washed its hands off the project without providing promised amenities and completing it.
The Omkar Ananta residents, the SRA project component, alleged that the developer marketed the project with a long list of amenities including a double-high entrance lobby, a jogging track, a swimming pool, a landscaped garden, a health & fitness center, a playground for children and an acutherapy walkway, but none have been forthcoming even though they have made 100 per cent payment while taking the fit-out possession in 2017.
Omkar Ananta was proposed as a 31-story project on the top of a rocky hill, consisting of wings A, B and C. The project was designed to have A and C wings in the same building whereas the B wing was a separate structure with all the amenities between the two buildings. In October 2017, residents were fitted out, but they said there is no sign of the developer has started work on the B wing. Slums are still in the B wing plot and have been denied all facilities.
We had shown fancy brochures promising every comfort and we could not even see our flats until 100% of payments were made and fitout possession papers were signed. We realized there are many problems in the internal fittings after taking possession. In addition, new projects are being initiated by the developer, but they are non-committal on when we will get these amenities.
One of the resident Srikrishna Mohanta, who lives in Flat C 1104 said, “The management is not answering to any of our calls.”
Another resident named Urmila Singh, who lives in flat A 202 said, “There is no connection to BMC water. Four tankers have been provided by the developer each day. The gas piped line has not yet been provided. Parking for all of us is not enough. The elevators are not backed up by power and fire safety equipment has not been properly installed. There is only one entry/exit into the building and fire engines cannot be fitted in the event of a fire. We wonder how the SRA awarded the project Occupancy Certificate with these fundamental things missing.”
When the residents approached the MahaRERA to request the registration of the project, they were told that it would be impossible to register for a current real estate project once OC was granted. “SRA granted the OC on 29 April 2017 only 2 days before the entry into force of RERA on 1 May 2017. But the project is unfinished and should be registered with MahaRERA, “said C403 resident Krishna Keshav.
Bharat Dhuppar, Omkar Developers CEO, Western Region, has denied that it has discharged its B wing construction responsibilities, stressing that all of the facilities had been designed to take an integrated Phase I and Phase II of the project into account. “Following the completion of Phase I, we could not begin Phase II; and B wing was to be developed in Phase II. However, the real estate scenario was turned so dreadful. There’s a market downturn. In addition, due to the NBFC (non-banking financial institution) crisis, the liquidity scenario has deteriorated. But we will soon complete the B wing and residents will have all the amenities, but we can not give an approximate or exact timeframe from now on because of the market scenario, “said Dhuppar.
He says BMC water connection compliance is in an advanced stage. He responded to a fire-safety lacuna and complained that elevators were not backed up by power: “We wouldn’t have OC in the first place without fire safety compliance. In case of power failure, the elevators are equipped with the necessary Auto Rescue equipment and the elevator will be opened automatically in case of a power failure. Back-up generators are not essential in accordance with fire standards, but we want to install them soon so that elevators work smoothly even if the power failure happens.”

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Gone are the days, when a buyer was struggling to get possession for a property. Now, people can expect to get some sort of result for their real estate problems.

Just like many other cases, a similar case was found in which a buyer had paid some advance along with stamp duty but never got the possession. A Lower-Parel resident Shrivastava said that she had booked the flat on the 13th floor of the building (Prarthana Heights). This complaint has been registered with the Maharashtra State Consumer Disputes Redressal Commission in 2015. According to the agreement done on 26th December 2005, Shrivastava was supposed to get the possession on December 2007 which was not given as it was agreed. Shrivastava had paid Rs 64lakh along with stamp duty.

The state consumer commission ordered Prarthana Builder to hand over a 790sq.ft flat in Lower-Parel and also pay Rs 21lakh compensation to the buyer for the delay. The buyer purchased the property for Rs 71lakh in 2005 but was never given possession of the flat.

The court also mentioned that if the flat is not been given within 2 months, then the builder would have to pay an extra Rs 50,000 each month to Madhumati Lele Shrivastava.  The compensation amount of Rs 21Lakh includes reimbursement for the rent which Shrivastava had to shell out over the years.

As the problem was occurred by the builder and not by the purchaser, the commission refused the offer given by the builder, Prarthana Enterprises who wanted to refund Rs 64lakh paid as booking amount.

The builder had agreed to pay Rs 50,000  a month as a rent amount until possession is given, but Shrivastava said the commission that neither did the builder pay rent for a single month nor did he handed over the possession of the flat.

Further, she said she is willing to pay the remaining Rs 7lakh, but the builder should give her a flat of similar size, with similar amenities, within 1 km of the existing flat. The builder argued that there was a delay in returning the possession since there were stop work notices from the corporation from time to time.

Refuting the defence, the commission said, “It is very clear from those stop-work notices and other reasons that the complainant has no role in it and hence, the complainant cannot suffer.”  The commission said that the fact remained that the builder did not hand over possession of the flat, as agreed. “Thus, there is clear- cut deficiency in service on the part of the opponents,” the commission said.

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There are times when we get excited and indulge in something which later we don’t like. In the case of buying a property, you may hear some exciting opportunity for investment and want to cancel the property deal which you booked last week. Many a time an individual wants to withdraw its property deal, due to the inadequacy of paying the rest amount or the developer is delaying the possession time. For this, a person should acknowledge certain factor which might guide to cancel the property deal correctly.

According to the Government of Maharashtra, a person can claim the refund for stamp duty he paid within 6 months from its payment. The government is likely to deduct 1% of the stamp duty which is subject to a minimum of Rs 200 and a maximum of Rs 1,000 of the stamp duty paid.

If the developer is delaying the project possession and an individual wants to cancel the deal, in such case the Maharashtra government allows a longer period of two years from the date of the agreement, for claiming the refund of the stamp duty, subject to certain conditions. Meanwhile, this is only applicable to the cancellation agreement which is registered and the developers fail to hand over the possession of the property booked.

At the time of cancellation, a buyer can expect a refund of 98% of the stamp duty if an application is made for a refund of the stamp duty. The documents required for the refund application are 1) Original Agreement and 2) Original cancellation deed with both the documents being registered. However, you will not get a refund of the registration charges.

Important Factors to understand:

1) Generally, a Builder-buyer agreement which includes sale agreement or property allotment documents carries cancellation policy. Go through the document in detail as the cancellation is subject to the agreement terms.

2) Always keep the acknowledgement document you receive especially at the time of payment.

3) Pay through cheques or other methods which can be recorded instead of paying in cash.

4) Always, have a written consent as verbal promises and assurances are not considered as valid in court.

A developer has a right for cancellation charges which usually ranges around 10% of the cost of the property. This deduction is done before refunding the booking amount. As there are no guidelines declared by the government the deduction is done at the builder’s preference and some builders might waive it off in some cases.

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Some Builders/Developers designs a building which is more likely to attract modern requirements of the public, to do so they might do cost cutting in safety measures which are essential in any building. Whether it a Commercial or Residential building, a developer has to consider safety precautions for one’s life.

People like to own a flat in a skyscraper building, but they should understand the safety measures of a particular building. One of the measure safety precautions which a buyer must ask is about whether this building is safe? There are many fire accidents happened in well-known society. A robust fire-fighting system is a crucial aspect of a building’s safety plan. There are many old buildings in Mumbai, for them the fire department needs to take steps, to create awareness about fire safety among the residents of the building.

For newly constructed buildings, the government has given some set of rules concerning fire safety which a developer needs to follow. Apart from following the norms laid out by civic bodies for approvals, developers can add value, by selecting fire-resistant materials for constructions.

Top 5 Fire Safety measures which a buyer should check before buying a flat:

1) Provide adequate means of escape: It is dangerous to provide only 1 specific area to escape so, the first rule of fire management requires sufficient escape routes out of the building, in accordance with its scale and occupancy. The number, size and location of exits are specified in the National Building Code (NBC) 2005, a detailed set of guidelines for constructing, maintaining and operating buildings of all types.

2) Install smoke detection & smoke suppression systems: Smoke detection can sense the fire instantly which will alert by providing an automatic alarm system. This system has helped many times, as the premise can be evacuated before the fire spreads in the whole building. Also, Smoke suppression system helps to sprinkle water on the fire detected area.

3) Use flame-retardant materials in interiors: Materials used in the interiors can save or endanger lives. The combination of wood, paper and textiles makes workstations highly combustible. Fabrics can be made flame-retardant, however, so that they self-extinguish when lit. An increasing number of companies, especially multinationals, request such fabrics despite their price premium, according to data from Indian office furniture manufacturer BP Ergo.

4) Ask the local fire brigade to assess safety: Fire department will assess your building’s level of fire safety for a nominal fee. Storage of dangerous or inflammable materials, old and unstable structures, insufficient getaway routes or electricity over-burdens are potential death traps that are best surveyed by experts.

5) Comply with National Building Code: “Green buildings” are in vogue but safe structures are sadly not. Both the Mumbai Fire Brigade and BMC commissioner concede that 80% of buildings likely violate accepted codes of building safety, with ignorance and personal whims leading to illegal modifications after gaining requisite occupancy permission.

Before buying a property people research so many things but forget about this most important element. So, it will be a good practice if one can see all of the above Safety measures before booking a flat.

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RERA is an act for regulation and promotion of the real estate sector to ensure the closeout of apartment, plot or building in an effective and straightforward way. The Act intends to secure the enthusiasm of consumers. It was enacted by the Parliament in May 2016 and the Act has come into power with all its 92 sections from 1st May 2017 crosswise over India.

Introduction of Real Estate Development and Regulatory Act on 15th March 2016 has shaken the whole real estate market in India. It brought every single movement of the purchaser and developer carefully under its administrative body.

Objectives of RERA Act:

1) Ensures accountability towards buyers and protect their interest.

2) Infuse transparency, ensure fair-play and reduce frauds & delays.

3) Introduce professionalism and pan India standardization.

4) Establish symmetry of information between the builder and buyer.

5) Imposing certain responsibilities on both builder and buyer.

6) Establish a regulatory oversight mechanism to enforce contracts.

7) Establish a fast- track dispute resolution mechanism.

8) Promote good governance in the sector which in turn would create investor confidence.

Benefits of RERA Act for Buyers:

1) Standardization of carpet area: Before RERA the manner by which a builder calculated the price of a project wasn’t defined. However, with RERA there is now a standard formula that is used to calculate carpet area. This way, builders cannot provide inflated carpet areas to increase prices.

2) Reducing the risk of insolvency of the builder: Most builders and developers tend to have multiple projects being developed at the same time. Earlier, developers were allowed to move funds raised from one project to that of another. This is not possible with RERA since 70% of the funds raised need to be deposited in a separate bank account. These funds can be withdrawn only after certification by an engineer, a chartered accountant, and an architect.

3) Rules for Advance payment: As per the rules, a builder cannot take more than 10% of the cost of the project from the buyer as advance or application fees. This saves the buyer from having to source funds fast and having to pay a large amount.

4) Rights to the buyer in case of any defects: Within 5 years of possession, if there are any structural defects or problems in quality, the builder has to rectify these damages within 30 days at no cost to the buyer.

5) Interest to be paid in case of default: Prior to RERA, if the developer delayed possession of the property, the interest paid to the buyer was much lower than if the buyer delayed payments to the promoter. This has changed with RERA and both parties have to pay the same amount of interest.

6) Buyer’s rights in case of false promises: If there is a mismatch in terms of what was promised by the builder and what has been delivered, the buyer is entitled to a full refund of the amount that was paid as advance. At times, the builder may have to provide interest on the amount as well.

7) If a defect in the title: If at the time of possession, the buyer discovers that there is a defect in the title of the property, the buyer can claim compensation from the promoter. There is no limit to this amount.

8) Right to information: The buyer has a complete right to information about the project. This includes plans related to layout, execution, and completion status.

9) Grievance Redressal: If the buyer, the promoter, or the agent has any complaints with respect to the project, they can file a complaint with RERA. If they aren’t pleased with RERA’s decision, a complaint can also be filed with the Appellate Tribunal.

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