Transferring the legal rights in real estate is a crucial issue of property ownership, particularly in the context of RERA. This law was designed to make the real estate sector more transparent, responsible, and efficient while protecting buyers and holding developers accountable with set obligations. It's very important for both buyers and promoters to know how the transfer of legal rights takes place under RERA to not only prevent any dispute but also have a smooth transfer of ownership.
Legal Title and Ownership Transfer in Real Estate
As far as the real estate sector is concerned, the transfer of legal rights denotes the process by which the legal rights of the promoter are legally transferred to the allottee, and thereafter, if necessary, the legal rights of one allottee are transferred to other allottees.
One such important thing to understand at this stage is the concept of chain of title. As a buyer, one must check if there are any issues regarding the chain of titles. It should be noted that under RERA, the buyer is termed a "bonafide purchaser" if he or she is able to demonstrate that proper due diligence has been done and payments have been made through proper and legal means.
Section 17 of RERA - Key Clause
The section of the Act relates to the transfer of title and provides specific responsibilities on the part of the promoters. According to Section 17, it is mandatory for the promoter to ensure that there is a registration of conveyance deed in favour of the allottee. Such deeds include transfer not just of the individual unit (house/plot/building), but also of the undivided proportionate share of the common areas.
Further, the responsibilities of the promoters also include:
- Handing over possession of the property
- Transferring common areas to the association of allottees or appropriate authority
- Provision of all title deeds in the stipulated time period
- Timelines for Transfer of Ownership
Under RERA, there are clear timelines to carry out the transfer of conveyance deeds as follows:
1. Single Building Project
Transfer of the conveyance deed should take place within 3 months from the time when the developer obtains the Occupancy Certificate.
If at least 51% of the allottees have paid their full payments, then the developer should transfer ownership before this period.
2. Multiple Buildings or Large Layout Projects
The developer should carry out the transfer of conveyance deeds either within one month of registering the society or company or within 3 months from the date of obtaining Occupancy Certificate (whichever is earlier).
Role of Local Laws
RERA recognizes the presence of existing local laws for dealing with property-related transactions. These local laws shall prevail if they are active and do not clash with the principles laid out in RERA. However, in situations where there are no local laws prescribing timelines or procedures, RERA rules shall be considered binding.
Protection of Buyer in Default Situations
Among the most potent safeguards provided by RERA, the buyer has the option to withdraw from the project altogether in case the developer does not provide possession on time or complete the project as per the agreement.
The buyer has two courses of action here:
Leave the project
The developer is legally bound to return all the money deposited by the allottee along with interest.
Stay with the project
The allottee is legally entitled to interest payments monthly in case of any delays.
This makes sure that the buyer is well taken care of financially.
Relevance of Title Insurance
Another regulation enforced by RERA requires promoters to have a title insurance policy. It is a very important step taken in order to safeguard the interests of the buyers against any loss caused due to problems with their property title.
Title insurance can cover:
- Losses because of inaccurate ownership claims
- Legal costs in case of any dispute
- Hazards because of title issues
It definitely makes the process of buying easier for the buyers, particularly when the title of previous owners is not certain.
Buyer-to-Buyer Transaction
In case of a transfer of property from one buyer to another, there would be a need to follow the legal process again and verify the chain of ownership. It will involve the execution of a valid deed of sale of property under RERA.
The transfer of legal rights of the Real Estate (Regulation and Development) Act, 2016 has been formulated to create a conducive atmosphere for transactions within the sector. The timely completion of conveyance deeds, the promotion of accountability among promoters, and other measures such as title insurance have greatly improved the level of buyer protection under RERA. Buyers should always engage in due diligence and be sure that their property title has no disputes before signing the transaction documents. Developers should also strive to fulfill the obligations of RERA.
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