Understanding Real Estate Documentation – Allotment Letters | Agreements for Sale | Sale Deeds under RERA

Table of Contents

1. Overview
2. Sales are Formalised in a Stage – Wise Manner
3. Differences Between Agreement for Sale and Sale Deed
4. What is an Agreement for Sale?
5. Legal Provisions Under RERA
6. Registration of the Agreement for Sale
7. Agreement For Sale Prescribed By MahaRERA Rules, 2017
8. MahaRERA Rules, 2017 Prescribe Model Form for Agreement for Sale
9. What does RERA 2016 Say About Agreement for Sale?
10. Which Enactment Shall Prevail for the Purpose of Agreement for Sale?
11. MahaRERA Rulings
12. What is a Sale Deed?
13. Is Sale Deed the Same as Conveyance Deed?
14. Sale Deed at the Time of Property Registration
15. Supreme Court Ruling on Sale Deed and Agreement for Sale
16. Consequence of Failure to Execute a Sale Deed
17. RERA Provides for Conveyance Deed
18. Frequently Asked Questions (FAQs)

Check out Taxmann's Maharashtra RERA Law & Practice which offers a detailed analysis of the Real Estate (Regulation and Development) Act, 2016, exploring its impact on various stakeholders in the real estate sector. It includes diverse topics like registration, taxation, and legal challenges, providing a comprehensive guide for professionals like CAs, advocates, and real estate agents.

1. Overview

1. The promoters as per their policy execute various documents with allottees such as:

(i) Standard forms: Application for Booking/Reservation form;

(ii) Allotment letters on receipt of minimum amount;

(iii) Memorandum of understanding;

(iv) Agreement for sale; and

(v) Register the sale deed or conveyance deed with allottee at the time of handing over the possession of the apartment upon receipt of full consideration;

(vi) Finally executes and registers the sale deed or conveyance deed of common area such as land, building and common amenities in favour of association of allottees or society or company as the case may be;

(vii) Thereafter, the property cards in urban area or the 7/12 extracts outside urban area will be updated and the new owners name will be recorded by the revenue department.

2. All the above documents are not having same legal implications.

3. Further an agreement for sale of an immovable property is not the same as a sale deed for the property.

4. This Chapter discusses the differences that an allottee and promoter should be aware of, from a legal standpoint.

2. Sales are Formalised in a Stage – Wise Manner

After the apartment is booked by signing the booking form by the allottees, the promoter on his letter head issues allotment letter to confirm the booking of the apartment to the allottee.

Thereafter before receiving more than 10% of the consideration of the apartment, the first documents that is executed, to provide a proper legal status to an understanding between a promoter and an allottee is known as agreement for sale as per section 13 of RERA read with Rule 10 of MahaRERA Rules, 2017. This crucial legal document is also known as agreement for sale.

However, an agreement for sale should not be confused with a sale deed or the conveyance deed – while one is a deed another is an agreement and thus, different from each other. The similarities in the names, one tends to assume they mean the same thing. However, a sale deed is quite different from an agreement for sale.

3. Key Differences Between Agreement for Sale and Sale Deed

4. What is an Agreement for Sale?

An agreement for sale, is an agreement to sell a property in future. This agreement specifies the terms and conditions, under which the property in question will be transferred. The Transfer of Property Act, 1882, which regulates the matters dealing with the sale and transfer of house property, defines the contract for sale or an agreement for sale as under:

“A contract for the sale of immovable property, is a contract that a sale of such property shall take place on the terms settled between the parties” – Section 54.

Section 54 further provides that

“It does not, of itself, create any interest in or charge on such property.”

From the above definition, it becomes amply clear that an agreement for sale contains a promise to transfer a property in question in future, on satisfaction of certain terms and conditions. So, this agreement itself does not create any rights or interest in the property, for the proposed buyer.

What the Agreement for sales creates, is a right for the purchaser to purchase the property in question on satisfaction of certain conditions. Likewise, the seller also gets the right to receive the consideration from the buyer on complying with his part of the terms and conditions.

In case of failure of the seller to sell or hand over possession of the property to the buyer, the buyer gets a right of specific performance, under the provisions of the Specific Relief Act, 1963. A similar right is available to the seller under the agreement, for seeking specific performance from the buyer.

Even though the signing of the agreement for sale does not mean the sale has been concluded, it is a crucial step in that direction. This is why buyers must be acutely aware of the terms and condition as mentioned in the agreement.

5. Legal Provisions Under RERA

(1) Section 2(c) of RERA defines Agreement for sale

The term “agreement” shall have the same meaning as under the Indian Contract Act, 1872 and the term “sale” shall have the same meaning as under the Transfer of Property Act, 1882.

(2) Analysis of definition of agreement for sale

Analysis of definition of ‘agreement for sale’. An agreement for sale constitutes the terms and conditions of sale of a property by the seller to the buyer. These terms and conditions include the consideration amount at which it is to be sold and the future date of full payment. Being an important document in the sale transaction, it enables the process of sale to proceed/progress without any hurdles. All the terms and conditions included in the agreement for sale must be understood thoroughly by both the parties and obeyed throughout the sale process till the time the sale deed is made. Agreement for sale is the base document on which the conveyance deed is drafted. Conveyance deed is the document prepared at the time of full payment made by the buyer and when the actual transfer of the property takes place.

(3) Allotment letter held to be agreement for sale

Maharashtra Real Estate Appellate Tribunal held that allotment letter is nothing but an agreement as per section 2(c) of RERA.

In the case of Jyoti K. Narang v. CCI Projects Pvt. Ltd., it was inter alia held by the Appellate Tribunal on 20th March, 2019 that it is important to gather the nature of the transaction and not the nomenclature of the documents while determining whether the letter executed between the parties was in the nature of an allotment letter or an agreement. Even though the letter was styled as allotment letter, considering the details of sale and purchase of the flat between allottees and promoter along with condition of stipulated period of handing over possession and the manner of payment of price as per the Schedule, it was concluded that the promoter agreed to sell the said flat to the allottees and executed the transaction of sale which was evident from the contents of the allotment letter.

6. Registration of the Agreement for Sale

Section 13 of the RERA states that the promoter shall not accept any amount more than ten per cent of the sale price, under any law for the time being in force. This clarifies that the restriction under MOFA which provides a threshold of 20 per cent on the consideration is further reduced to 10 per cent under RERA. The provision under section 13 of RERA is reproduced hereunder:

13. No deposit or advance to be taken by promoter without first entering into agreement for sale

(1) A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.

(2) The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.

7. Agreement For Sale Prescribed By MahaRERA Rules, 2017

Rule 10 of the Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017 has prescribed the model form of agreement as Annexure A as per the provisions of Section 13 of the Act.

The Act provides that a specified form of agreement for sale between promoters and allottees may be prescribed. This will help in preventing inclusion of biased provisions in it and thereby protect the interest of the allottees. Allottees have also been granted the right to seek relief from unilateral termination of such agreements by promoters without cause. The rule 10 of MahaRERA Rules, 2017 is reproduced hereunder:

Rule 10. Agreement for Sale. –

(1) For the purpose of sub-section (2) of section 13, the agreements for sale shall be in conformity with the provisions, rules and regulations made thereunder and shall be in accordance with the model form of agreement at Annexure ‘A’.

Nothing in this sub-rule shall be deemed to prevent the promoter to modify the model form of Agreement for Sale at Annexure ‘A’.

Provided that such agreement is in conformity with the provisions of sub-section (2) of section 13 of the Act and the rules and regulations made thereunder.

(2) Any application letter, allotment letter or any other document signed by the allottee, in respect of the apartment, plot or building, prior to the execution and registration of the agreement for sale for such apartment, plot or building, as the case may be, shall not be construed to limit the rights and interests of the allottee under the agreement for sale under the Act or the rules or the regulations made thereunder.

Normally, promoters insert punitive clauses against allottees which penalises them heavily for any default while defaults by the promoter attracts negligible or no penalty.

Such penal clauses could well be a thing of the past and allottees can look forward to more balanced and rational agreements in future, now after coming into force the Real Estate (Regulation and Development) Act, 2016.

8. MahaRERA Rules, 2017 Prescribe Model Form for Agreement for Sale

Section 13 of the Act read with rule 10 provides for the model format of the agreement which provides for the various details in respect of the project of the promoter. The particulars of the development project have to inter alia include the following items:

(i) The details of the construction of building and apartments;

(ii) Specifications of the internal and external development works;

(iii) The dates and manner for the payment of the purchaser price;

(iv) Schedule for the completion of the project and the subsequent possession;

(v) Rate of interest payable.

Rule 10 allows the promoter to modify the model agreement as long as it is in conformity with section 13 of the Act and the corresponding rule. Rule 10 provides that any other application letter, allotment letter or any other document signed otherwise between the promoter and the allottee, before the execution and registration of the agreement, shall not in any manner be construed to limit or waiver the rights and interests of the Allottee under the subsequent agreement for sale, under the Act.

The model form of the agreement provided under Annexure A of the Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017 states that clauses which are mandatory under the Act shall be retained in every individual agreement executed by the Promoter and the Allottee. The provisions which are contrary to the statutory conditions shall not be binding upon the parties.

Even though the promoter has been given flexibility to modify and alter the model agreement, such modifications or alterations shall not be inconsistent or contrary to the provisions of the Act or the rules and regulations made thereunder.

Except as stated under section 13 of the Act, the promoter has a flexibility in respect of the other provisions of the agreement. Therefore, clauses pertaining to the various other aspects of the Agreement, for example internal society rules can be decided by the promoter.

Despite the model agreement for sale prescribed in MahaRERA rules, pro- moters were insisting on one sided agreement clauses leading to litigation.

MahaRERA observed that during the course of hearing of the complaints that various issues of agreement were arising by way of dispute. Therefore, it was necessary to consider to modify the Agreement for Sale prescribed in Annexure A of the said Rules. In view of the above, the MahaRERA has constituted a committee to advise and to give recommendations vis-a-vis suggestion in the Draft Agreement for Sale and Draft for Allotment letter, vide order No. 17/2021 dated 14th June 2021, MahaRERA vide its order No. 38 dated 13-12-2022 made it mandatory to have following clauses in proforma agreement to sale and no deviation should be made. Explanation in section and rules is read as below:

(a) Force majeure – Section 6 “Explanation. – For the purpose of this section, the expression “force majeure” shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project,”.

Rule 6 (a)

“Upon the registration number in Form “C”. The period for which registration shall be valid shall exclude such period where actual work could not be carried by the promoter as per the sanctioned plan due to specific stay of injunction orders relating to the real estate project from any Court of law, or Tribunal, competent authority, statutory authority, high power committee, etc.”

(b) Time period for the formation of association of allottees by whatever name called, not being in compliance with the proviso of Section (4) (e) of the Act read with rule 9 (1) of the Rules which proviso and Rule are as follows:

Section 11(4)(e)

“provided that in the absence of local laws, the association of allottees by whatever name called, shall be formed within a period of three months of the majority of allottees having booked their plot or apartment or building as the case may be, in the project;”

Rule 9(7)(i) “Where a, Co-operative Housing Society the Promoter shall submit the application in that behalf to the Registrar for registration of a Co-operative Housing Society under the Maharashtra Cooperative Societies Act, 1960 or a company or any other legal entity, within three months from the date or which fifty-one per cent of the total number of allottees in such a building or a wing have booked their apartment.

Rule 9(7)(ii) “Where a Promoter , then the Promoter shall submit an application to the Registrar for registration of the Co-operative Society or the company application to the Registrar for registration of the Co-operative society or the company to form and register an Apex Body in form of Federation or Holding entity consisting of all such entities in the layout formed as per clause (i) of sub-rule (1) of rule 9(1)(i) herein above. Such application shall be made within a period of three months from the date of the receipt of Occupation Certificate of the last of the building which was to be constructed in the layout.

(c) Time period for execution of registered conveyance deed with the association of allottees by whatever name called, not being as per the mandate of section 17 of the Act read with rule 9(2) of the Rules, the said mandate reads as follows:

Section 77

“Provided that in the absence of any local law conveyance deed in favour of the allottee or the association of the allottees or the competent authority, as the case may be, under this section shall be carried out by the promoter within three months from date of issue of occupancy certificate.”

Rule 9(2)(ii)

“Period for Conveyance of title, by Promoter, to legal entity of allottees in case of single building project. The Promoter shall (subject to his right to dispose of the remaining apartments, if any) execute the conveyance of title within three months from the date of issue of occupancy certificate.”

Rule 9(2)(iii)

“Period for conveyance of title, by Promoter, to organisation of allottees in case of Layout:

(a) In the case of a building or a wing of a building in a Layout, the Promoter shall (subject to his right to dispose of the remaining apartment, if any) execute the conveyance of the structure of that building or wing of that building (excluding basements and podiums) within one month from the date of issue of occupancy certificate.

(b) In the case of a layout, the Promoter shall execute the conveyance of the entire undivided to inseparable land underneath all buildings jointly or otherwise within three months from the date of issue of occupancy certificate to the last of the building or wing in the layout.”

(d) Defect Liability – Not mentioning of the defect liability Period or reducing the defect Liability period. The relevant provision of the Act i.e. Section 14(3) reads as follows:

Section 14(3)

“In case any structural defect or any other defect in workmanship, quality or provisions of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, under the Act.”

(e) Confirmation of final carpet area –

“The Promoter shall confirm the final carpet area that has been allotted to the Allottee after the construction of the Building is complete and the occupancy certificate is granted by the competent authority, by furnishing details of the changes, if any, in the carpet area, subject to a variation cap of three per cent. The total price payable for the carpet area shall be recalculated upon confirmation by the Promoter. If there is any reduction in the carpet area within the defined limit then Promoter shall refund the excess money paid by Allottee within forty-five days with annual interest at the rate specified in the Rules, from the date when such an excess amount was paid by the Allottee. If there is any increase in the carpet area allotted to Allottee, the Promoter shall demand additional amount from the Allottee as per the next milestone of the Payment Plan. All these monetary adjustments shall be made at the same rate Per square meter as agreed in Clause 1(a) of this Agreement.”

(f) Right of the promoter to charge interest to allottee –

“Without prejudice to the right of promoter to charge interest in terms of sub-clause 4.1 above, on the Allottee committing default in payment on due date of any amount due and payable by the Allottee to the Promoter under this Agreement (including his/her proportionate share of taxes levied by concerned local authority and other outgoings) and on the allottee committing three defaults of payment of instalments, the Promoter shall at his own option may terminate this Agreement:

Provided that, Promoter shall give notice of fifteen days in writing to the Allottee, by Registered Post AD at the address provided by the allottee and mail at the e-mail address provided by the Allottee, of his intention to terminate this Agreement and of the specific breach or breaches of terms and conditions in respect of which it is intended to terminate the Agreement. If the Allottee fails to rectify the breach or breaches mentioned by the Promoter within the period of notice then at the end of such notice period, promoter shall be entitled to terminate this Agreement. Provided, further that upon termination of this Agreement as aforesaid, the Promoter shall refund to the Allottee (subject to adjustment and recovery of any agreed liquidated damages or any other amount which may be payable to Promoter) within a period of thirty days of the termination, the instalments of sale consideration of the Apartment which may till then have been paid by the Allottee to the Promoter.”

9. What does RERA 2016 Say About Agreement for Sale?

Section 13(1) of RERA Act, 2016 states that

“A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot or building as the case may be, as an advance payment or an application fee from a person without first entering into written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force”.

From this we can infer that this particular provision emphasizes the fact that there are two fundamental duties of a promoter:

• First, the promoter, after taking the advance amount from the prospective buyer, has to execute the agreement for sale.
• Secondly, the agreement for Sale should be registered before appropriate authorities.

10. Which Enactment Shall Prevail for the Purpose of Agreement for Sale?

In order to answer this question we need to understand that real estate transactions in India are governed by the following enactments:

• Transfer of Property Act, 1882 (TPA);
• Indian Contract Act, 1872 (Contract Act);
• Real Estate (Regulation and Development) Act, 2016 (RERA);
• Registration Act, 1908 (Registration Act);
• Indian Stamp Act, 1899 (Stamp Act); and
• Indian Easements Act, 1882 (Easements Act).

But when we analyse the section 13(1) of RERA Act, 2016 specifies that an agreement for Sale must be registered as per the law for time being in force this means that an agreement for Sale is registered as per the provisions of the Registration Act, 1908.

However, section 88 of the RERA Act, 2016 states that

“the act shall be in addition and not in derogation to the law for the time being in force”.

This means that the RERA Act, 2016 has to be read with the Registration Act, 1908. On the other hand, Section 89 of RERA Act, 2016 states that

“The provisions of this act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force”.

This means the RERA Act, 2016 will have an overriding effect.

Applying the provisions of section 88 of the RERA Act, 2016, when we analyse the provisions of both the enactment, we can observe that section 17(2)(v) of Registration Act, 1908 negates the RERA Act, 2016. Therefore as per section 89 of the RERA Act, 2016, the provisions of Registration Act, 1908 will not be taken into consideration for the purposes of registration of agreement for Sale.

Hence we can say that the provisions of the RERA Act, 2016 shall prevail over Registration Act, 2016 only with respect to the agreement for Sale.

Although, the RERA Act, 2016 provides for a non obstante clause in section 89 and as a result of the same RERA becomes applicable over Registration Act, 1908. On the other hand, it also gives rise to certain other question i.e. whether an agreement for Sale will create a right, title or interest over the property?

This question arises because registration of documents is done usually to ensure clear right and title over the property to the purchaser. An agreement for Sale as such does not provide a clear title to the property. The Supreme Court has, in the case of Durgawati Devi v. Union of India (Order dated October 4, 2019 filed under SLP( C) 3479/2016), held that the execution of agreement for sale does not transfer ownership/title of the property and the ownership/title is transferred only by way of sale deed or conveyance deed.

If the agreement of sale does not create then it gives rise to another question as to whether the remedy can be exercised by the purchaser on breach of the agreement of sale? This has been answered under section 18 of the RERA which states that the promoter should compensate the purchaser if he was not able to complete the project and hand over the possession of the property within the time frame as specified in the agreement for Sale or agreement of sale. If the promoter fails to do so then he can file a complaint before RERA Authority and claim compensation. In case he is aggrieved by the order of Authority, then he can file an appeal in the Real Estate Regulatory Appellate Tribunal under section 44 of the RERA Act, 2016.

Therefore it is appropriate to conclude that the RERA Act, 2016 overrule Registration Act for the purpose of agreement for sale because the agreement for sale does not provide a clear title, However, it can be enforced in the court of law as per the provisions of the RERA Act, 2016.

11. MahaRERA Rulings

(a) MahaRERA directed the promoter to register the agreement for sale: In the case of Ashutosh Shah v. Proviso Builders & Developers it was inter alia held by the Authority on 10th October 2019 that the respondent had accepted more than 10% of the amount from the complainant towards the cost of the flat. And therefore the respondent was directed to execute and registrar the agreement for sale with the complaint in accordance with the provisions of section 13 of the Act.

(b) Importance of agreement for sale: Signing an agreement for sale becomes important in light of several factors. First, this is a legal proof of the buyer and seller entering into an agreement, based on which the future course of action would be decided, in case of a dispute. Also, if you are applying for a home loan, the bank would not accept your application till you sign an agreement for sale.

Recall here that both parties will have to abide by the conditions laid in the agreement to sale. Any party flouting any of the terms, as prescribed in the agreement, might be dragged to court, if the other party so wishes. All parties concerned should also be mindful of the fact that this document can be cited as a legal proof in the court of the law and all those who have agreed to abide by the terms are obliged to do so legally.

Agreement for sale overrides the allotment letter and any other earlier documents exchanged between promoter and allottee.

12. What is a Sale Deed?

A sale deed is a legal document that proves that the seller has transferred the absolute ownership of the property to the purchaser. Through this document, the rights and interests in property are acquired by the new owner. A sale deed usually consists of the following information—

1. Details of the buyers and sellers (name, age and addresses).
2. Property description (total area, details of construction, the exact address and surroundings).
3. Sale amount including advance payment paid as well as the mode of payment.
4. Time frame when the property title will be actually passed to the buyer.
5. Actual date of delivery of possession.
6. Indemnity clause (The seller promises to pay the buyer for any damages in case of disputes with regard to the ownership, resulting in monetary losses to the buyer).

13. Is Sale Deed the Same as Conveyance Deed?

Even though one often gets to hear the two terms being used interchangeably, a sale deed and a conveyance deed mean different things. The sale deed is basically a type of conveyance deed, considering the latter is rather a wide term, which also covers gift deed, exchange deed, mortgage deed, lease deed, etc. Basically, all these documents are various types of conveyance deeds.

Each type of legal document that transfers the ownership of property from one person to another is a conveyance deal. In that sense, a sale deed is a conveyance deed too, insofar as property is concerned.

Paperwork for current practices.

There in fact are two documents as under:

(a) Agreement for sale, stamp duty paid and registered.

(b) Sale deed for the apartment on Rs. 100 stamp paper and registered. Sale deed is executed only after 100% payment is effected by the buyer and simultaneous possession of the apartment is received.

14. Sale Deed at the Time of Property Registration

At the time of sale deed/conveyance deed registration, allottees also have to present, along with other key documents copies, the agreement for Sale (first registered document). Doing so is important, for the authorities to ensure that the transaction is being concluded, based on the agreement for sale made between the promoter and allottee earlier.

15. Supreme Court Ruling on Sale Deed and Agreement for Sale

The sales agreement may or may not result into an actual sale of the property in question. Some of the stamp duty laws, like the Maharashtra Stamp Act, deem an agreement for sale of an immovable property, on the same footing as a proper deed of conveyance and therefore, are subject to the same stamp duty as is applicable on the proper deed of conveyance or sale deed of an immovable property. Due to such deeming provisions, requiring payment of stamp duty on an agreement for sale, people mistakenly perceive an agreement for sale, as a proper sale deed.

The Supreme Court of India in 2012, in the case of Suraj Lamp & Industries (P.) Ltd. (2) v. State of Haryana, while dealing with the validity of sales of immovable properties made through power of attorney, has held as under:

“Immovable property can be transferred/conveyed only by a deed of conveyance (sale deed), duly stamped and registered as required by law. We, therefore, reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.”

“Any contract of sale (agreement for Sale), which is not a registered deed of conveyance (deed of sale), would fall short of the requirements of sections 54 and 55 of the Transfer of Property Act and will not confer any title, nor transfer any interest in an immovable property (except to the limited right granted under section 53A of the Transfer of Property Act).”

According to the Transfer of Property Act, an agreement for sale, whether with possession or without possession, is not a conveyance. Section 54 of the Transfer of Property Act enacts that the sale of an immovable property can be made, only by a registered instrument and an agreement for sale does not create any interest or charge on its subject matter.

The Supreme Court further reiterated the importance of sale agreement between the builder and buyer, as it recently ruled that the period of allotment of a housing unit to a home buyer has to be considered from the date of the builder-buyer agreement and not from the date of registration of the project under the Real Estate (Regulation and Development) Act, 2016.

The court further ordered the RERA authorities to order payment of compensation from the builder as per the sale agreement, the sanctity of which has been upheld through this order.

16. Consequence of Failure to Execute a Sale Deed

As per the Indian Registration Act, 1908, any agreement for transfer of any interest in an immovable property of value more than one hundred rupees, is required to be registered. So, if you have purchased any property under any agreement for sale, without it being followed by a proper sale deed, you do not get any right or interest in the property purported to be transferred under the agreement of sale.

This absolute rule is subject to the exception provided under section 53A of the Transfer of Property Act. Section 53A provides that where the buyer has obtained possession of the property that is subject matter of the transfer, while fully complying with his part of the obligation under the agreement, the seller shall not be entitled to disturb the possession so granted to the buyer. It may be noted that section 53A provides a shield to the proposed transferee against the transferor and debars the transferor from disturbing possession of the transferee, but it does not cure the title of the buyer to the property. The ownership of the property still remains with the seller.

So, in the cases where you have purchased any property under a sales agreement and got possession, the title of the property still remains with the developer, unless a sale deed subsequently has been executed and registered under the Indian Registration Act.

Thus, it becomes clear that a title in an immovable property can only be transferred by a sale deed. In the absence of a duly stamped and registered sale deed, no right, title or interest in an immovable property, accrue to the buyer of the property.

17. RERA Provides for Conveyance Deed

Section 17 of RERA, provides that the promoter shall execute and register a conveyance deed of the apartment in favour of the allottees and the common area in the name of the association of allottees within 3 months of obtaining the occupation certificate or the completion certificate as the case may be.

A detailed provisions and the procedure involved in execution and registration of conveyance deed is discussed in a separate chapter in this manual.

18. Frequently Asked Questions (FAQs)