Pros and Cons of Deemed Conveyance
Builder takes a Land for development from a land owner either by purchasing or with a development agreement. In either case he holds the ownership rights of the land directly or indirectly.
Once construction is completed builder sales flat to different customers/purchaser, wherein builder and purchaser carry out a registered purchase/sale agreement for that particular flat. Thus, all flats are sold to each customer, in turn builder conveys the structure. Thereafter, builder forms the cooperative housing Society of these customers and transfers the rights of structure to the Society.
Since, all the flats in the structure are already sold, transferring rights of the structure is pretty easy. However, one important part is ignored. It’s a transfer of ownership of the land to the Society. This is forgotten by builder, either to keep vested interest or just because of laziness, Land is not conveyed to the Society.
Now, structure is conveyed, structure and land both are in possession of the Society but builder remains as an owner of the land. As per Law , either by provisions of MOFA or by RERA, builder must convey the land to the Society in stipulated period. Members of this society have nothing to worry about this small defect in the title as they are in possession of the property, they own the flat, they can avail Home Loans, they can sale or mortgage the flat without a hitch. Problem arises when The Society goes for redevelopment. In order to get plans approved in Pune Municipal Corporation, it’s owner who has to apply. At this stage, Society realised that they are not owners and they have to beg the builder. This is the only problem you can face.
This problem is overcome by law. Government of Maharashtra has passed a law where Society can get land conveyed to it’s name without cooperation of the builder