Ramesh Prabhu explained the law, procedures and incentives for obtaining deemed conveyance for a cooperative housing society, at a seminar organised by Moneylife Foundation
Nearly 85% of co-operative housing societies (CHS) in Mumbai alone do not have conveyance from their builders. It is the same elsewhere in Maharashtra. "Although the process is simple, people find it difficult to collect required documents from several departments for obtaining deemed conveyance. However, one can use innovative methods like procuring information under the Right to Information (RTI) to obtain all the documents from several departments, says Ramesh Prabhu.
He was speaking at a seminar on "Deemed Conveyance – Law, procedure and incentives to meet the 31st Dec deadline" organised by Moneylife Foundation in Mumbai. Mr Prabhu is a chartered accountant (CA) by profession and an expert on various laws and issues concerning the co-operative and housing sectors.
To avoid major problems later on, or to avoid problems such as Campa Cola compound residents, all CHS members need to first resolve the issue of becoming legal titleholder of the land through conveyance deed or deemed conveyance. Otherwise "when things go wrong, like in the case of the collapsed Laxmi Chhaya building from Mumbai, it poses a serious risk to your most valuable asset and probably your biggest investment," said Mr Prabhu.
The Maharashtra government's "Deemed Conveyance" scheme has been extended twice and will close on 31 December 2014. The government has said there will be no further extension. Many housing societies are keen for redevelopment but they cannot go ahead with redevelopment for want of conveyance.
Mr Prabhu said, “There are three options for getting conveyance—through builder, through court cases or through deemed conveyance. As per the law, the builder or developer is supposed to provide conveyance for a CHS within four months of establishing the CHS. Therefore, one can safely say, four months after setting up a CHS, it is 'deemed' to have a conveyance in place. Only thing required is to get it documented in government records.”
“In case of the developer or builder and land owners (together promoters) are not willing to or ready to sign the conveyance deed, then as per the law, the District Deputy Registrar (DDR) as competitive authority signs it as promoter/s. In addition, even if there is a court case pending, the DDR as statutory authority can give the deemed conveyance in favour of the CHS,” he added.
One of the issues raised in deemed conveyance applications is that there are two or more buildings on adjacent plots owned or developed by the builder. Mr Prabhu said, “There are several judgements by the Court that say two or more CHS on a single plot of land can also go for deemed conveyance separately. Even condos can be given deemed conveyance.”
For flat owners in buildings developed by MHADA or given on lease by CIDCO, there are separate provisions, and the CHS can approach the respective authorities, Mr Prabhu added.
What is conveyance or deemed conveyance?
As per the provisions of section 11 of the Maharashtra Ownerships Flats Act (MOFA), the promoter is duty-bound to complete his title and convey the same to the organisation of persons who had bought the flat (i.e. cooperative society, CHS, home buyer, apartment owner, etc). The Conveyance has to be executed and the promoter or builder has to deliver the title relating to the property. It is also the duty of the promoter to file a copy of the conveyance with the flat purchasers and the competent authority under section 11(2).
Many a times it is found that builders have not conveyed the title of properties to the housing societies in the hope of availing more floor space index (FSI) that may become available, or the benefits accrued to them in case the property is redeveloped. In such cases, members of the CHS can get the deemed conveyance from the authorities.
The buyer after forming a cooperative housing society (or CHS) also can approach the competent authority for obtaining a unilateral deemed conveyance in favour of the legal entity i.e. cooperative society, CHS, apartment or a company.
How to obtain conveyance or deemed conveyance?
When the developer and land owners (promoters) are ready to sign the deed, the CHS can opt for conveyance deed. In case, either the promoters are not ready or not available, then the CHS can opt of unilateral or deemed conveyance. In both cases, either the developer or builder or the CHS have to file an application in prescribed format (form No.7) before the sub-registrar. For more information you can visit the Maharashtra government's portal for conveyance.
The competent authority on receiving such application shall, within reasonable time, but in any case not later than six months after making such enquiries as deemed necessary, after verifying authenticity of the document submitted, after giving the promoter reasonable opportunity for being heard, shall issue a certificate to the sub-registrar or any other appropriate registration authority under The Registration Act, 1908. This certifies that there is a fit case for enforcing unilateral execution of Conveyance Deed, conveying the right title and interest of the promoters in the land and building in favour of the applicant as Deemed Conveyance.
Submissions made by the cooperative society or apartment owner to the sub-registrar shall, (or the appropriate registering authority), on the basis of the certificate issued by the competent authority, along with the unilateral instrument of conveyance, notwithstanding anything contained in The Registration Act, 1908, issue summons to the promoters as to why unilateral instrument should not be registered as Deemed Conveyance.
After giving the promoter reasonable opportunity of being heard, after being satisfied that is a fit case for unilateral conveyance, (the competent authority or sub-registrar) shall register instrument as deemed conveyance.
Towards the end of the session Mr Prabhu spoke on a few case laws where completion certificate/ occupation certificate is not required for deemed conveyance, even if a case in consumer court is pending–you can apply for deemed conveyance, deemed conveyance is possible even if there is balance FSI and disputes raised of open space between the two buildings and FSI thereupon- still Deemed Conveyance upheld.
The Campa Cola Case
Earlier this month, the Bombay High Court set aside the deemed conveyance granted to Campa Cola societies and remanded the matter to the deputy registrar of cooperative societies for a fresh hearing.
Commenting on this development, Mr Prabhu said, "The main reason for setting aside the deemed conveyance order of Campa Cola is, that all necessary parties were not included in the application. In the case of Campa Cola, the land belonged to BrihanMumbai Municipal Corp (BMC) and BMC was not made a party in the application for reasons best known to them. When BMC challenged the same before the High court, the Campa Cola Council agreed to include BMC as a party and requested to give an opportunity for fresh hearing to all the parties before District Deputy Registrar (DDR) within next three months. Thus the matter has been remanded back for fresh hearing and I am sure, the same will be granted."
"The mistakes sometime committed by the consultants or society is that they want to go for short cuts which takes more time," he added.
The market regulator has ordered freezing of demat and bank account of one Ashok Bhagat to recover Rs97 lakh in the Empower Industries case
Market regulator Securities and Exchange Board of India (SEBI) has ordered attachment of bank and demat accounts of one Ashok Bhagat to recover dues worth about Rs97 lakh in Empower Industries India Ltd case.
The dues include penalty worth Rs82 lakh imposed on Bhagat by SEBI in January last year on charges of violating capital market norms in the matter of Empower Industries.
In an attachment order dated 11 July 2014, SEBI has asked banks to attach all accounts, including lockers held by him.
Similarly, the regulator has directed depositories - NSDL and CDSL -- to attach all demat accounts of the defaulter.
SEBI informed the banks and the depositories that there was "sufficient reason" to believe that defaulter may dispose of the amounts in the accounts and "realisation of amount due under the certificate would in consequence be delayed or obstructed".
The regulator has also asked banks to attach the lockers held by him as well as "all other amount/ proceeds due or may become due to the defaulters or any other money held or may subsequently hold for or on account of defaulter".
It has further ordered the banks and depositories that with immediate effect no debit would be made in these accounts until further directions from the market regulator.
However, the credits, if any, into the account may be allowed, SEBI said.
The watchdog has also asked for various details of the accounts held by him, including account statements.
According to the FTC lawsuit, Amazon’s set up allowed children playing kids’ games to spend unlimited amounts of money to purchase items as they played, such as coins or stars and that kids may not have been able to distinguish which items cost actual money and which cost virtual currency
Thousands of consumers are due millions in refunds for unauthorized charges billed to their credit cards by Amazon.com for amounts racked up by their children playing apps, the Federal Trade Commission (FTC) alleged in a lawsuit filed last week.
The suit, filed in Washington federal court, charges that Amazon’s set up allowed children playing kids’ games to spend unlimited amounts of money to purchase items as they played, such as coins or stars, without parents’ permission and that kids may not have been able to distinguish which items cost actual money and which cost virtual currency. Amazon keeps 30 percent of all in-app charges –which can range from 99 cents to $99 — and has a no-refund policy on these types of charges.
‘Not a hack but nearly as bad’
One parent complained to the FTC that she was billed more than $300 in charges her daughter ran up. Another parent’s six-year old child pushed buttons at random and incurred charges on a gaming app.
The commission said Amazon knew within a month of introducing the in-app charge system in 2011 that it was causing problems for customers and that internal emails described the situation as “near house on fire.” In March 2012 Amazon began requiring passwords to confirm in-app charges but only those exceeding $20. Last year, Amazon adjusted its in-app charge system to require passwords but sometimes the passwords were stored and customers weren’t always presented with the prompt, and even if they were, the prompt did not provide the amount of the charge, the FTC alleged in its suit.
One Amazon customer service representative told a parent, according to the suit:
It’s not a hack, but nearly as bad: it’s an in-game purchase. A user, such as a child, can easily misinterpret the option to spend actual money as just part of the game.
Basic consumer rights
FTC Consumer Protection Director Jessica Rich said the suit against Amazon is part of a continued effort by the agency to enforce a crucial tenant of consumer rights, which is that consumers should not be billed for charges without informed consent.
In March the FTC settled a similar complaint with Apple for allegedly unfairly charging parents for in-app purchases made by their children without their consent. Apple agreed to refund customers $32.5 million and change its billing practices. Rich said Apple is in the process of complying with that settlement.
Last week, the FTC filed a complaint against T-Mobile alleging it bilked customers out of hundreds of millions of dollars in a cramming scheme.
Amazon defended itself in a July 1 letter to the FTC and called the lawsuit “deeply disappointing.” Amazon Associate General Counsel and Vice President Andrew DeVore said:
In-app purchasing was and remains a new and rapidly evolving segment, and we have consistently improved the customer experience in response to data….Pursuing litigation against a company whose practices were lawful from the outset and that already meet or exceed the requirements of the Apple consent order makes no sense, and is an unfortunate misallocation of the Commission’s resources.
While the FTC acknowledged that Amazon has refunded some customers who complained to the company, Rich said the commission is seeking full refunds for all affected consumers and a court order ensuring that Amazon will obtain permission before imposing charges for in-app purchases. It is also requesting Amazon give up the revenue it gained from these charges. The FTC, however, is not seeking penalties.