My Tips
1. DIFFERENCE OF SALE DEED AND AGREEMENT TO SELL (ATS)
Sale Deed is not ATS and ATS is not Sale Deed.
But why am I writing this?
Because ATS has been/is being used as Sale Deed. Just check the language of an ATS that is being used in the file of GPA/ATS sale. Only the Title is ATS but the whole language is picked up from a Sale Deed. Absolutely illegal.
ATS is just a BAYANA AGREEMENT.
In an ATS, complete transactions of money and property’s possession cannot be shown. If shown, then it is not ATS. Complete transactions can be shown only via Sale Deed. That is the difference. But this difference has been/ is ignored even by the Sub-Registrars and every day ATSs with language of Sale deed have been/are registered.
BEWARE!
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2. TSR (TITLE SEARCH REPORT)? OR LSR (LEGAL SEARCH REPORT)? TSR or LSR?
What is this, and what is its importance in the sale-purchase of properties?
Just see.
TSR/LSR is the same report that a Lender Bank gets from a legal firm before sanctioning a property loan against a particular property. This legal firm makes a deep inquiry of that property in the concerned Sub-Registrar Office, Courts, Revenue Office, MCD Office, etc. and prepares that report. Banks do not sanction the smallest loan without getting a TSR/LSR.
If a purchaser is not going to avail a bank loan, I would highly recommend that he must get TSR/LSR at his own expense before entering especially into the deal of an Agricultural Land or a property in a private colony.
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3. SALE ON GPA & AGREEMENT TO SELL? VALID?
The simple answer to the above question is NO.
But half of Delhi’s properties have been sold on GPA (General Power of Attorney) and Agreement to Sell (ATS).
Hire Purchase/ Lease-hold DDA properties, JJ Colony properties, Unapproved Colony properties, all have been/are being sold on GPA/ATS etc.
Though GPA with money transaction cannot be cancelled by the seller, and DDA also converts a property from leasehold/Hire-purchase to Freehold on the basis of GPA/ ATS yet GPA/ATS are not the perfect method of transferring a property.
The best way of transferring a property are Sale Deed, Gift Deed, Conveyance Deed, Relinquishment deed. All mandatorily registrable.
*Suraj Lamp Industries Vs. State of Haryana*
Study the above-mentioned Landmark Judgement of Supreme Court to understand more.
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4. BROKERAGE OF PROPERTY DEALERS?
There is no law that governs brokerage of property dealers except the RERA Act-2017 and the Haryana Property Dealers Act-2008.
And these laws are not applicable everywhere in India. The 1% brokerage norm is market-driven, not law-driven.
In my view, this 1% brokerage is too low. Peanuts.
A broker shall have to sell hundreds of properties to gather money to buy a property of his own. Not practical. Not easy.
So my advice the Seller and purchasers is, that you please give appropriate brokerage to the Brokers. If you give peanuts, you shall hire the monkeys only.
5. AN UNAUTHORIZED PROPERTY IS UNAUTHORIZED IS UNAUTHORIZED
Electric/water meter installations, or utility bill payments, or property tax payments, or bank loans, or even SALE DEEDS can not make an unauthorized property an authorized one.
No.
Unauthorized property remains unauthorized UNTIL it is regularized or authorized by the exact concerned Govt. authority.
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6. TERRACE RIGHTS? OWNED BY TOP FLOORS? REALLY?
It is a common perception that Terrace/Roof rights belong to the Top Floors, especially in DDA FLATS. But is this right? The answer is NO.
Terraces/Roofs are common areas just like stairs, Lifts, Parkings, Entry Gates etc. I found clear Court-rulings in the case of DDA Flats. Here below is an example: —
Delhi High Court has stated in Bihari Lal Jalan, Wg. Cdr. Madan Lal …vs Dda And Ors.:–
“18. सामान्य क्षेत्र या सामान्य भाग सभी आवंटियों के लिए समान रहना चाहिए और किसी विशेष आवंटी या आवंटियों के समूह द्वारा उनके विशेष उपयोग के लिए इसे नहीं हड़पा जा सकता है। जहां तक शीर्ष मंजिल के मालिक द्वारा शीर्ष भागों के विशेष उपयोग का संबंध है, हमारा मानना है शीर्ष छत एक सामान्य हिस्सा है जैसा कि 1968 के डीडीए विनियमों में वर्णित है और इसका उपयोग केवल शीर्ष मंजिल के मालिक के लिए नहीं है।“
“18. Common areas or common portions must remain common to all the allottees and cannot be grabbed by any particular allottee or group of allottees for their exclusive use. Insofar as exclusive use of the top portions by the top floor owner is concerned, we feel that the top terrace is a common portion as described in the DDA Regulations of 1968 and the use of the same is not exclusive to the top floor owner.”
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7. RENT AGREEMENTS OF 22 MONTHS? UNREGISTERED? VALID?
While I have seen age-old, active, and reputed property dealers making unregistered Rent Agreements of 22 months or even longer period than 22 months but the simple answer to the above-question is *NO. Unregistered Rent Agreement of more than 11 months is invalid. Such a Rent agreement is not admissible in the Court of Law.
Here below are the laws applicable: —
Section 17 in The Registration Act, 1908:– Documents of which registration is compulsory:- (d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
Section 107 of TRANSFER OF PROPERTY ACT:– Leases how made.—A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
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8. PRECAUTION WHILE SELLING LEASEHOLD /HIRE-PURCHASE PROPERTY
Document Writers have stereotyped drafts, and they go on using them without going into finer distinctions.
I have seen more than once that even in the drafting of a leasehold or hire-purchase property, there are clauses stating that the property is free from all kinds of encumbrances, dues, bills and balances, etc.
No. Such clauses are very DANGEROUS for the Seller in such deals.
On the contrary, it must be mentioned that the property is NOT freehold and there are certain dues pending to DDA/GDA/HUDA etc. And further, it must be mentioned that these dues SHALL BE/SHALL NOT be cleared by the seller.
Thus the purchaser would never be able to claim any dues/balances/bills from the seller that had not been agreed upon.
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9. BENEFIT OF ARBITRATION CLAUSE IN AGREEMENTS
I prefer inserting Arbitration Clause in my Agreements (Sale Agreement. Rent Agreement etc.). It is somewhat like this:–
“In case of any dispute between the parties involved in this agreement, matter shall be referred to “Indian Council of Arbitration (ICA), Room No.112, 1st Floor, Federation House, Tansen Marg, New Delhi-110 001, Phone: 23719102; 23319849; 23350087; 23319760″. And the decision of the Arbirator appointed by ICA shall be final.”
Arbitration is expensive and arbitration by ICA is even more expensive but it can save decades-long Court-fight and Lakhs of rupees.
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10. PUTTING E-MAIL IDs, PHONE NUMBERS/ PERMANENT ADDRESSES ETC. IN AGREEMENTS
In the very beginning of all kinds of Agreements, I prefer inserting AADHAR numbers, phone numbers, e-mail IDs, and permanent addresses (if any, apart from the present address) of all the people involved.
And I also insert a clause defining that “Notices” can be sent via electronic as well as conventional methods, if required.
WHY?
Because, in case of disputes, people go on avoiding Notices/Summons for years. This simple hack may help a lot in such cases. The courts may accept serving of the notices under such agreements.
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11. BENEFIT OF MAKING ALL THE MAJOR OCCUPANTS TENANTS
In “Tenants Section” of the Rent Agreements, usually only One main family member’s name is mentioned even if there are 5 or more Major family members.
I suggest a better option. In tenants section, put name of all the family members who are above 18 years of Age. Get signatures and thumbs of all of them on each paper.
Now all are equally responsible for each and every term of the agreement. Far better than One person.
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12. WHETHER SOCIETIES CAN TAKE ENTRY/ GATE FEE FROM THE NEW PURCHASERS?
Recently I had debate with one of our dealer brothers. He had the view that societies can charge the entry/Gate fee from the purchasers. I was not convinced. Because I think that society can only take the maintenance charges and nothing else. None can stop the owner from selling and none can stop the new purchaser from entering the property.
Here is the result of my online RESEARCH:
The office of the Registrar Cooperative Societies (RCS) of Delhi Government has issued repeated directives which assert that the practice of charging entry fee is illegal and the president/ secretary of the housing society will be held responsible for this transgression.
The RCS directive states that “Violation of this Directive will be viewed seriously and the President / Secretary of the concerned Society would be held responsible jointly and individually. Action will be taken against the Society under the provisions of the Delhi Cooperative Societies Act and Delhi Cooperative Societies Rules for any such violation.”
In Smt. Kusum Lata Gupta And Ors. vs Registrar Cooperative Societies And … on 29 January, 2007, Delhi High Court passed the similar Verdict. It was a WRIT filed on the basis of the same directives issued by the Registrar, Co-operative Societies on 14.12.1999 and 10.10.2001.
Result of my research is, no society can charge any kind of Gate fee/ Entry fee from the purchasers.
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13. ONE MONTH NOTICE CLAUSE IN RENT AGREEMENTS:–
Often, there is a clause in Rent agreements that the rented property can be vacated either by the tenant or the Owner after giving a one-month advance notice to the other.
This is a dangerous clause, especially for the tenants. This clause minimizes the period of the Rent Agreement from 11 or 22 months to One month only. The tenant lives under the impression that he is to live for 11/22 months but he forgets that the Owner can ask him to vacate any time after giving one-month Notice.
Not a very good thing for the tenants.
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