Conveyance & Deemed Conveyance in Housing Societies

Understanding Conveyance

Conveyance is the legal transfer of ownership of land and buildings from a developer (builder) to a cooperative housing society. This process is crucial for societies as it grants them full ownership rights, enables redevelopment, and provides financial security.

As per Section 11 of the Maharashtra Ownership Flats Act (MOFA), 1963, the builder or promoter is legally required to execute the conveyance deed within four months of registering the society. Similarly, Section 17 of the Real Estate (Regulation and Development) Act (RERA), 2016, mandates developers to register a conveyance deed within three months of obtaining the occupancy certificate.

Why is Conveyance Important?

Without conveyance, housing societies do not own the land and building outright, leading to several complications:

• Limited redevelopment rights – Societies cannot initiate redevelopment projects without ownership.
• Risk of unauthorized sales or mortgages – Builders can mortgage or sell the land to third parties since they hold the title.
• Financial losses – Societies may later have to pay hefty fees to obtain conveyance.

Once conveyance is completed, the society's name is recorded in the property card and revenue records, making the property legally free and marketable.

Types of Conveyance

1. Regular Conveyance

This is the standard legal transfer of property ownership, where the builder/developer voluntarily executes the conveyance deed in favor of the housing society.

2. Deemed Conveyance

When a builder fails or refuses to transfer ownership, societies can apply for deemed conveyance under MOFA. In such cases, the District Deputy Registrar (DDR) issues an order granting the conveyance to the society.

However, while deemed conveyance grants a valid title, it may not always provide absolute rights over common areas or unutilized Floor Space Index (FSI). Moreover, builders can legally challenge deemed conveyance orders, leading to prolonged litigation.

Advantages of Having a Conveyance Deed

1?? Legal Ownership – The society secures its land and building ownership, preventing disputes.

2?? Redevelopment Benefits – Societies can initiate reconstruction projects without seeking builder approval.

3?? Access to Additional FSI – Government policies allow societies to claim unutilized FSI for redevelopment.

4?? Loan & Mortgage Benefits – A registered conveyance deed enables the society to raise loans for repairs or reconstruction.

5?? Sale of Common Areas – The society controls parking spaces, open land, and terraces, preventing misuse by the builder.

6?? Compensation for Redevelopment – Members receive compensation and benefits when opting for redevelopment projects.

Consequences of Not Having a Conveyance Deed

?? The builder remains the legal owner of the land, even though flat owners have paid for their apartments.

?? Societies cannot reconstruct the building without the builder’s approval.

?? Builders may mortgage the land and raise loans without the society’s knowledge.

?? Unutilized FSI benefits could be exploited by the builder instead of being utilized for redevelopment.

?? The builder may sell common areas, such as gardens, open spaces, or terraces, for profit.

?? In the future, societies may have to pay high fees to obtain conveyance, which could have been done earlier at a nominal cost.

RERA Provisions & Impact on Conveyance

Under RERA, Section 17, developers are required to: ?? Execute a registered conveyance deed in favor of the society within three months of obtaining the occupancy certificate. ?? Hand over all necessary documents and plans within 30 days after granting possession to buyers.

This provision strengthens housing societies' rights by making conveyance a statutory obligation for builders.

Conveyance in Redevelopment Projects

In redevelopment, conveyance plays a pivotal role in transferring land ownership from individual landowners to the housing society. The society then manages the redevelopment process and distributes newly constructed flats among members.

However, under deemed conveyance, certain legal restrictions might apply to common area usage and additional FSI claims. Builders may also challenge the conveyance, causing legal complications.

Conclusion

Executing a conveyance deed is not just a formality but a critical legal step in securing a society’s rights. Whether through regular or deemed conveyance, housing societies must actively pursue ownership transfer to:

? Safeguard property from builder exploitation.

? Enable redevelopment and expansion.

? Unlock financial benefits, including loans and FSI claims.

With RERA mandating timely conveyance, housing societies should proactively ensure compliance and avoid future legal hurdles. A properly executed conveyance deed is the foundation of long-term security, stability, and growth for any housing society.

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