(A) Legal

A Flat purchaser has to enter into an Agreement for Sale for the purchase of a flat. The
said document duly stamped and registered gives the flat purchaser right title and claim to
the flat purchased by him. We have hereunder endeavoured to explain and elaborate e
few legal matters that are relevant to the person purchasing a flat.
1) Stamp Duty
2) Compulsory Registration of Documents Section 17 of the Registration Act, 1908
3) Power of Attorney
4) Co-operative Societies
(B) Stamp Duty
The Stamp duty is payable on instruments before or at the time of execution or on the
next working day following the day of execution. The rates for stamp duty are shown in
Articles comprised in Schedule -I appended to Bombay Stamp Act, 1958.
Present rates of stamp duty given for residential premises in the city of Mumbai are,
1) Between Rs. 5,00,001/- to Rs. 15,00,000/-. Stamp duty is Rs. 7,600/- plus 5% of the
value above Rs. 5,00,000/2) Stamp duty is Rs. 68,750/- plus 5% of the value above Rs. 15,00,000/The rate of Stamp Duty for Shops / Galas / Office Premises and Garage even if used for
car parking is 10% in Mumbai. Stamp Duty has to be paid on the Agreement Value or the
Market Value of the property whichever is higher. Stamp Duty has to be paid every time
the flat is being sold. Stamp Duty has to be paid even if it is a transfer within family. If
the authorities are demanding more stamp duty than the agreement value then a
representation should be made to the authorities emphasizing the below mentioned points
(as may be applicable)
1) Possession of the premises will be acquired at a later date. (10% reduction in the
market value is normally given by the town planners if possession is not given to the
purchaser at the time of execution of the agreement)
2) The duty has to be paid on built up area and not on super built up area.
3) If payments have been made in say 1995 and the agreement has been executed in 1998
then the market value of the year 1995 has to be taken as per the principles of Land
Acquisition Act.
4) There are reductions in the market value if the size of the shop is big.
5) The area is lacking in infrastructural facilities.
6) There is a defect in the title of the property and therefore, market value will also be
reduced.
7) The officer should be told to inspect the premises and then only the market value
should be fixed.
Penalty at the flat rate of 2% per month is levied by the stamp authorities. The maximum
penalty is 200% of the stamp duty amount
Inspite of a fall in the property prices in the last few years the market value as mentioned
in ready reckoner by government has increased by more than 50%. Earlier, for old
buildings, land plus construction cost method of valuation was followed by many
officers.

(C) Stamp paper

As per the amendment of section 34 of the Bombay stamp Act 1958, the stamp paper
should purchased be in the name of one of the parties executing the document. The stamp
papers are available at the places mentioned below :1) General Stamp Office.
2) Bandra Stamp Office.
3) Metropolitan Magistrate Court.
4) City Civil Court.
5) Bombay High Court.
6) Small Causes Court.
7) Sales Tax Office.
8) Income Tax Office.
With a view to reduce hardship to common man, the office of the Superintendent of
Stamp has appointed a number of Stamp Vendors.
Compulsory Registration of Documents Section 17 of the Registration Act, 1908
(A) Instruments on which registration is compulsory
lays down different categories of documents for which registration is compulsory.
The documents relating to the following transactions of immovable properties are
required to be compulsorily registered:
1) Instruments of gift of immovable property.
2) Lease of immovable property from year to year or for any term exceeding one year or
reserving a yearly rent.
3) Instruments which create, extinguish, declare, assign or limit any right, title or interest
to or in an immovable property of a value of more than one hundred rupees. Under
Section 2(6) of the Registration Act, 1908 the term "immovable property" includes:
"land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any
other benefit to arise out of land, and things attached to the earth, or permanently fastened
to any thing which is attached to the earth, but not standing timber, growing crops nor
grass."
(B) Place
Place for Presenting document for registration Section 28 of the Registration Act, 1908
states that all documents of which registration is compulsory if it relates to an immovable
property as well as a few documents of which registration is optional should normally be
presented for registration in the office of the Sub-Registrar within whose sub-district the
whole or some portion of the property to which the document relates is situated.
(C) Time for presenting documents for registering
All documents are required to be presented for registration to the proper office
within 4 months from the date of its execution.
(D) Fees

Fees for registration of a document The State Government has been empowered to
fix the fees for registration of the document. The registration fees at present fixed for
registering documents relating to property transactions are approximately 1% of the
consideration of the document but subject to a maximum limit of Rs.30,000/-. The
registration fee for the following immovable property transactions is leviable on the
market value of property on which stamp duty is charged. Conveyance, Exchange, Gift,
Partition, Transfer of Lease by way of Assignment, Sale, Power of Attorney given for
consideration and Authorization to the attorney to sell the property. In the case of lease,
the amount of registration fees will be dependent either on the premium or on the sum
payable under the lease or period/periods of lease. Person entitled to present the
document to the Registering Officer for Registration Section 32 of the Registration Act,
1908 deals with the provisions relating to the presenting of documents for registration by
a person. Subject to certain exceptions, every document which is to be registered under
the provisions of the Act should be presented at the proper registration office by:
(a) The concerned person himself/herself, or
(b) The representative or the agent of such a person duly authorized by a power of
attorney duly authenticated in a manner as is stated in Section 33 of the Registration Act,
1908. Registration of a document compulsory under the provisions of The Maharashtra
Ownership Flat Act, 1963 Registration is necessary under the provisions of this Act.
(E) Formalities to be compiled for registration
Procedure at the time of lodging a document for registration For registration of any
instrument, the original document which should be printed on one side only along with
two photocopies of the original have to be submitted to the Registering Officer. The
copies are required to be photocopied only on one side of the paper and there has to be a
butter paper between the two photocopied papers.
The registration of documents also requires 2 photocopies of the parties executing the
document. Also the left hand thumb impression is required of both the parties executing
the document.
The registration procedure also requires the presence of two witnesses and the payment
of the appropriate registration fees. On completion of the procedure, a receipt bearing a
distinct serial number is issued. The following requirements for completing the
registration are usually stated on the receipt:
1. Market Value of the property;
2. Urban Land Ceiling declarations of the transferor/s and the transferee/s.
3. As per Sec. 139 A of Income Tax Act, 1961, every person shall quote his PAN /
general index register no. in all documents pertaining to transactions of sale and purchase
of any immovable property valued at Rs. 5,00,00/- or more.
Explanation:
Here value of the property means the value as determined by the registration authority
from the ready reckoners of fair market value considered for payment of stamp duty and
registration.
However, if a PAN is not allotted, the person in Form No. 60 giving therein the
particulars of such transaction.

(F) Effects for Non-registration of documents

U/S 49 of the Act, any document requiring compulsory registration U/S 17 or by any
provision of the transfer of Property Act, 1882 if not registered, no document shall:
a) Affect any immovable property comprised therein.
b) Confer any power to adopt or
c) Be received as evidence of any transaction
Time permitted for registration of a document Under Section 23 of the Act, subject to
certain exceptions, any document other than a will has to be presented for registration
within four months from the date of its execution. The term "execution" means signing of
the agreement. Under the present rules and regulations, all agreements in respect of a
transfer of a premise or an immovable property have to be duly stamped, under the
provisions of the Bombay Stamp Act, 1958 before the document is presented for
registration. Provisions under the Act for the registration of a document after the expiry
of the prescribed period of four months Section 25 of the Registration Act, 1908 lays
down the provisions for cases where the prescribed time period for registration is lapsed
and where the delay in presentation of a document does not exceed four months and is
inevitable due to any urgent necessity or an unavoidable accident. If a document is not
presented for registration within the prescribed time period of four months, and if in such
a case the delay in presentation of the document does not exceed a subsequent period of
four months, then the parties to the agreement can apply to the Registrar, who may direct
that on payment of a fine not exceeding ten times the proper registration fees, such a
document should be admitted for registration. Delay in Registration - provision for
additional four months The practice followed in such an event is that the parties to the
document execute a Deed of Confirmation confirming that the main deed is valid and
binding upon them. By way of such a deed the transferor/s also confirm/s that he/they
hold/s no right, title and interest in the property and the same is being transferred to the
transferee/s. A copy of the main deed is annexed to this Deed of Confirmation. This is the
only manner in which the lapse in registration can be rectified. Document relating to an
immovable property in India be executed out of India A document relating to an
immovable property can be executed out of India and later it can be presented for
registration in India. As per Section 26 of The Registration Act, 1908 if a document
purporting to have been executed by all or any of the parties out of India is presented for
registration within the prescribed time, the Registering Officer may, on payment of
proper registration fee, accept such document for registration if he is satisfied that: a. the
instrument was executed out of India. b. the instrument has been presented for
registration within four months after its arrival in India.
MOFA
Under Section 4(1) of The Maharashtra Ownership Flats (Regulation of the promotion of
construction, sale, management and transfer) Act, 1963, it is laid down that,
notwithstanding the provisions of any other laws, the agreement in respect of flats to be
sold by the owner/ promoter/developer to the flat purchaser requires compulsorily to be
registered under The Registration Act. Registration under the provisions of The
Maharashtra Apartments' Ownership Act, 1970 Registration is necessary under this Act.

Under Section 13 of The Maharashtra Apartment Ownership Act, 1970 it is necessary on

the part of the owner/owners to execute a declaration with regard to description of the
land on which the building and improvements are to be located, including the number of
storeys, basements, number of each apartment, area of each apartment, number of rooms
and immediate common area etc. along with a set of floor plans of the building showing
the layout, location, and dimensions of the appurtenance and bearing the verified
statement of an architect certifying that the same is an accurate copy of the floor plans of
the building as filed with and approved by the local authority within whose jurisdiction
the building is located. Section 13(3) of the said Act requires that in all registration
offices a book called Register of Declarations and Deed of Apartments under The
Maharashtra Apartment Ownership Act, 1970 and a relevant index, be in a particular
form and should contain such particulars as the State Government may prescribe. Under
Section 13(5) of the said Act, the Sub-Registrar or Registrar must register the declaration
along with floor plans of the building and the Deed of Apartments in the Register of
Declarations and Deed of Apartments under the said Act and shall also enter the
particulars prescribed in the index kept under sub-section (3).
Any person acquiring any apartment or any apartment owner shall be deemed to have
notice of the Declaration and of the Deed of Apartments as from the date of its
registration under this section. Necessity of registering a document if a person agrees to
transfer his right, title or interest in a premises purchased from an owner / promoter /
developer to another person before the society is formed It is advisable to get an
agreement registered in these circumstances. Necessity of Registration of an agreement to
transfer a flat after the registration of a co-operative society After the registration of a cooperative society the purchasers of various premises become members and shareholders
of such a society, and as such the members are thereby governed under the provisions of
The Maharashtra Co operative Societies Act, 1960.
Cancellation Deed
The cancellation of a duly executed and registered document by mutual consent may
arise in some circumstances. In that event, the Deed of Cancellation will also have to be
registered. At the same time no document can be cancelled unless all the parties to it have
mutually agreed to the cancellation. Deed of Rectification If the main
document/agreement is registered and then in that event it is always necessary to register
the Deed of Rectification too. Blanks, erasures or alterations in a document. They are
permissible as per Section 20(1) of the Act, but the persons executing the document
should attest with their signatures or initials such blanks, erasures or alterations. As per
Section 20(2), while registering such a document, it is the duty of the Registering Officer
to make a note of any such blank, erasure or alteration in the register. The procedure on
admitting a document to registration The Registering officer has to endorse the following
particulars, namely: a. The signature and admission of every person admitting the
execution of the document in person or by his representative, assign or agent; b. The
signature and admission of every person examined in reference to such a document; c.
Any payment of money or delivery of goods made in the presence of the Registering
Officer in reference to the execution of the document and any admission or receipt of
consideration made in his presence in reference to such execution. After completion of all
formalities related to registration, such original documents are returned by post or by

hand delivery only after the proper procedure for the preservation of the original
document has been completed by the Registration Authorities. Documents unclaimed
from the Registrar for a very long period of time. Section 85 of the Registration Act,
1908 states that all documents (other than Wills) remaining unclaimed in any registration
office for a period exceeding two years may be destroyed.
Power of Attorney
A Power of Attorney is a document which empowers a specific person to act on behalf of
the person who is executing the same. It also includes any document by which a person is
authorized to appear and act on behalf of a person who is executing the power of
attorney. A power of attorney may also be given by a person to another to appear before
any Court, Tribunal or Authority or before a Co-operative Society or any Body or
Association. Types of Power of Attorney There are two types of Power of Attorney,
namely:
1.
General Power of Attorney
2.
Special Power of Attorney
3.
Necessity of a Power of Attorney:
1. General Power of Attorney:
This type of a Power of Attorney gives general powers to the person in whose
favour the document is executed. The person who is given the powers is called a
"Constituted Attorney" and he is authorized to perform all kinds of acts and to execute
any document on behalf of the person who has so executed that document.
2. Special Power of Attorney:
Such a Power of Attorney gives the person, power/s only for specified act/s or
transactions. In this case the power has to be strictly adhered to and the Constituted
Attorney cannot do anything for which he is not duly empowered by the Power of
Attorney.
3. Necessity of a Power of Attorney:
A Power of Attorney is generally executed when a person wants to authorize
someone to carry out any activity pertaining to his property which he would have
undertaken if he would be personally capable of doing the same. It is an authorization,
which confers powers akin to that of the Principal on the person for a temporary period of
time. If a person wants to present a document for registration at the proper registration
office and if, for some reason he cannot be present, he may do so through his
representative who is duly authorized by a Power of Attorney which is executed and
authenticated in the prescribed manner.
Power of Attorney to be authenticated by Sub-Registrar / Registrar where the principal
resides As per Section 33(a) of the Registration Act, 1908, if the principal resides in any
part of India where the Registration Act is in force at the time of executing the Power of
Attorney, the power of attorney has to be executed before and authenticated by the
Registrar or Sub-Registrar within whose District or Sub-district the Principal resides.
Execution of Power of Attorney in a case when the principal resides in any part of India
where the Act is not in force As per Section 33(b) of the Registration Act, 1908, if the

principal at the time of executing the Power of Attorney resides in any part of India
where the Act is not in force, the power of attorney is required to be executed before and
authenticated by any Magistrate.
Execution of Power of Attorney, if the principal at the time of its execution does not
reside in India As per Section 33(c) of the Registration Act, 1908, if the principal, at the
time of executing the Power of Attorney does not resides in India, then the Power of
Attorney has to be executed before and authenticated by a Notary Public, or any Court,
Judge, Magistrate, Indian Consul or Vice-Consul, or a representative of the Central
Government in the country where the principal resides. Persons exempted from being
present at any registration office for the purpose of admitting any document As per
Section 38 of the Registration Act, 1908, the following persons are exempted from
attending the office of the Registrar for admitting any document:
1) Persons, who are physically incapacitated due to some infirmity and who will have to
take too much of a risk or serious inconvenience in order to be present.
2) Persons who are in jail under civil or criminal process.
3) Persons who are exempt by law from making personal appearance in Court.
Attestation of a Power of Attorney by a Registrar The Registrar or the Sub-Registrar or
the Magistrate, must first satisfy himself that the Power of Attorney has been voluntarily
executed by the Principal. Only after he is satisfied as regards the same, can he attest a
Power of Attorney. If he is not satisfied as to the genuineness of the Power of Attorney,
then he has the authority to get evidence as to the voluntary nature of the execution.
Co-operative Societies
1) Open Plot Societies
2) Flat Owners Societies
3) Tenant Ownership Co-op. Hsg. Societies
4) Housing Board Societies.
In Open Plot Societies, members purchase or take on lease a plot of land and
themselves construct the building.
When a builder constructs flats and sells them to Flat Owners, the Society when formed
is called Flat Owners' Society.
The housing society acquires land by sale or lease, divides the land into plots and leases
out the plots to members. Land belongs to society and the building thereon belongs to the
member.
When a Society is formed by Allottees of flats and building is constructed by the Housing
Board Authorities, i.e. Mumbai Housing and Development Board, then the Society so
formed is of the type of Housing Board Society.
The procedure that should be followed for formation of societies of the above said types
is different for different types of Societies.
The procedure for Registration of a society begins with electing a Chief Promoter in a
meeting of the Promoters. The builder under the Flat Owners type of co-operative society
has the first right to act as the chief promoter. The developer / flat purchasers should call

for a meeting of the Promoters by issuing the notice under Agenda of the meeting giving
at least 14 days notice to the Promoters.
In this meeting, a Chief Promoter is elected who can exercise such powers and carry out
such functions as are mentioned in the minutes of the Promoters of the proposed Cooperative Society. After electing the Chief Promoter, the proposed name of the society
has to he decided by the Promoters. It is a common belief that the Society should consist
of atleast 10 members. If the number is less than 10 then special permission from
Government has to be taken. In such cases, the garages / car parking may be allotted to
other relatives of the promoter to reach number of 10. It would be of interest to note that
the model bye-laws define flat as a 'Flat means a separate set and self -contained set of
premises used or intended to be used for residence, or office or show-room, or shop, or
godown and includes a garage, or dispensary, or consulting room, or clinic, or flour mill,
the premises forming part of a building and includes an apartment'.
On allotment of name and permission to open a bank account by the Registrar, the Chief
Promoter has to collect Share Capital, Entrance Fees from promoters and deposit the
same in the branch of the bank permitted by the Registrar. It should be noted that the
amount cannot be withdrawn from the Bank till the Society is Registered or its
Registration is refused, except with prior written permission of the Registrar. The Chief
Promoter should submit Registration Proposal to the Registering Authority within a
period of 3 months from the date of issue of Letter of Reservation in the name of the
proposed Society. The documents that are normally to be submitted to the Registering as
under :1. Application for registration of Society in Form A along with Statement A. Enclosure to
application for Registration as per Rule 4(1) of Maharashtra Co-operative Societies
Rules, 1961.
2. Information about proposed society in Statement 'B' (vide Govt. Circular dated 2-51980)
3. Information about promoter members of the proposed society in Statement 'C' (vide
Govt. Circular dated. 2-5-1980)
4. A Statement of Accounts as per Form D.
5. Model Bye-laws.
6. Bank Balance Certificate.
7. R.B.I. / Treasury Challan for payment of Registration Fee of Rs. 500/8. Title Clearance Certificate from an Advocate.
9. A true copy of the approved Building Plan.
10. Letter of Authority granting permission to commence construction work/Completion
Certificate (if applicable)
11. Affidavit on Rs.20/- Stamp Paper from at least 10 promoter members to the effect
that they are residing in the area of operation of the Society (Proposed), made before a
Competent Authority.
12. Affidavit from the Chief Promoter on Stamp Paper of Rs.201- executed before the
Competent Authority in form 'Y'.
13. Certified True Copy of agreement made on Stamp Paper and Registered between the
builder, promoter and purchasers of flat.

Contribution to be collected
The contribution to be collected from the members may be in relation to the following:
1. Property taxes.
2. Water Charges.
3. Common Electricity Charges.
4. Expenses on Repairs and Maintenance of the building/buildings of the Society.
5. Expenses on Repairs and Maintenance of the lifts of the Society, including charges for
running the lift.
6. Sinking Fund.
7. Service Charges.
8. Car Parking Charges.
9. Interest on the defaulted charges.
10. Repayment of the instalment of the loan and interest.
11. Non-Occupancy Charges.
12. Insurance Charges.
13. Lease Rent.
14. Non-Agricultural Tax, and
15. Any other charges.
The apportionment of the share of each member, towards the charges of the Society, shall
be on the following basis:
1. Property taxes: As fixed by the local authority.
2. Water Charges: On the basis of total number of taps, push cocks/flush etc., provided in
each flat or, equally from all flats (as is mentioned in the Society''s bye-laws).
3. Common Electricity Charges: Equally for all flats.
4. Expenses on repairs and Maintenance of the building/buildings of the Society: At the
rate per square foot of the carpet area of each flat, fixed by the General Body.
5. Expenses on repairs and Maintenance of the lifts of the Society, including charges for
running the lift: Equally, by all the members, irrespective of whether they use the lift or
not.
6. Sinking Fund: As decided by the General Body, subject to the minimum of % per
annum of the value of each flat, excluding the proportionate cost of land.
7. Service Charges: Equally divided by the number of flats.
8. Car Parking Charges: As decided by the General Body.
9. Interest on the defaulted charges: At the rate fixed, under Bye-law No.74 (of the Model
Bye-Laws, as amended by the Society) to be recovered from defaulter members.
10. Repayment of the instalment of the loan and interest: The amount of each instalment,
with interest, as fixed by the financing agency.
11. Non Occupancy Charges: Maximum 100% of Service Charges, or, as provided in
Bye-Law No.45 of the Model Bye-Laws, if adopted and amended.
12. Insurance Charges: Carpet area of each flat.
13. Lease Rent: The carpet area of each flat.
14. Non-Agricultural Tax: The carpet area of each flat.
15. Any other charges: As decided by the General Body.

The following expenses on repairs and maintenance have to be incurred by the Society at
its own costs.
1. All internal roads.
2. Compound Wall.
3. External Water Pipe Lines.
4. Water Pump.
5. Water Storage Tanks.
6. Drainage Lines.
7. Septic Tanks.
8. Stair case.
9. Stair case Lights.
10. Street Lights.
11. Outside walls of the building / buildings.
12. All leakages of water.
13. Electric Lines up to the main switch in the flats.
14. Lifts.
No, a member has no right to deduct any amount from the Society''s bill. He is duty
bound to pay all the legitimate dues to the Society. If at all any expenses have to be
carried out, the same could be carried out by the member, only after getting a written
permission from the Society.