There has to be supplementary sharing agreement between owner and builder as to the flats would the builder be entitled to sell and the flats the landowner can sell .it should be registered to avoid legal complications in future
Buy flat from property developer
In my case, owner had entered into JDA with developer basis the agreement that developer has rights over 60% of UDS whereas owner has 40%. Both JDA and GPA are registered. No sale deed between owner and developer. While JDA clearly mentions who is the owner, it also entitles developer to develop, sell or alter his share of property as per his wish. Can I buy flat from developer directly? Or do I have take explicit consent from owner in my sale agreement.
Asked 18 days ago in Property Law
Religion: Hindu
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9 Answers
In a Joint Development Agreement (JDA) and General Power of Attorney (GPA) scenario, you can typically buy a flat directly from the developer, as the landowner grants the developer the power to sell the developed property on their behalf.
A GPA is a legal document that empowers the developer to act on behalf of the landowner, including selling the developed property.
1. If the flat you have identified/going to buy has fallen to the share of developer, then you can buy the flat directly from the developer, without obtaining consent from the owner, at the time of executing sale agreement.
2. However, this should not be construed as legal opinion, as other legal parameters , have to be looked into before buying the property.
Reason for me asking this is this verdict quoted by on of my friend - https://economictimes.indiatimes.com/wealth/legal/will/6-reasons-why-you-should-not-buy-property-via-power-of-attorney/articleshow/92072869.cms?from=mdr "Supreme Court ruled in 2019 that property transfers made through a PoA are not valid. As a result, if you buy a property from someone who has a PoA the previous owner will still be considered the titleholder. The top court has also ruled that sales conducted under a GPA are not protected by the law and property can be lawfully transferred only through registered sale deeds."
Asked 17 days ago
The judgement doesn’t have retrospective effect it has only effect after the same was passed
The supreme court judgement is for the vendor who has no title on his name except for the power of attorney deed in his favour.
Many people in order to avoid paying stamp duty, don't get the sale deed registered on their names but get a power of attorney on their names to possess the property.
The supreme court judgement is applicable for such cases only.
Here the developer is not the vendor, but he will execute the registered sale deed on behalf of the landowner and wherever necessary the landowner will be a consenting party to the sale deed.
You obtain a proper legal opinion before venturing into this investment.
There is no legal bar for land owner executing development agreement with the builder and executing POA in his favour
the said SC judgment does not debar landowner executing POA based on development agreement
- A Collaboration Agreement is an arrangement between an owner of the land and a builder where the land owner contributes the land and the developer undertakes the responsibility of obtaining approvals, property development, launching and marketing the project with the help of his financial resources.
- As per law, the builder is not the transferee or buyer of the flats as per the Transfer of Property Act, 1882 under the Collaboration Agreement.
- The ownership lies with the owner of the land, but the landowner grants the builder along with development rights, a license to enter the land for the purpose of development.
- The license/authority to enter the land is typically given by way of a Power of attorney issued in favor of the Builder, and this General power of attorney should be registered with the Registrar in order to be legally binding on both parties.
- Further, the transfer of the land on which construction will be carried by the Builder, is mandatory.
- Hence, if the said JDA and GPA is registered then the developer can sell his part of share directly.
You can certainly buy flat from developer on the basis of registered GPA. Judgment referred by you applies to different circumstances. Registration Act provides for sale of property by attorney of principal, if the principal is title holder of property. You will face problem in purchasing particular flat as shares are not yet ascertained.
