Wednesday, 30 April 2014


(Bangalore property|apartments|flats|lands for sale in Bangalore)

Having no financial constraints, one may prefer to buy an independent house, in which case he will be the exclusive master of his  house, as opposed to the owner of a flat in  an apartment building since he has to share certain common areas and facilities along with other flat owners in the apartment building who have an equal right in respect of these common areas and facilities. Not only this, each of the flat owners is  totally stranger to the other with  different life-styles and language. Therefore, a flat owner has to basically understand that buying a flat is incomparable to the buying of an independent house.

Due to such diversity in living styles of buyers of flats in an apartment building and the rights, obligations and duties of each apartment owner to other owners and to avoid chaos, confusion and misunderstanding amongst them, the Government of Karnataka has enacted the 'Karnataka Apartment Ownership Act, 1972,' (K.A.O.Act, 1972) which forms the basis for formation of an Apartment Owners Society or Association. An apartment owner has to consider the following:

Choosing  the  Builder
The first and foremost aspect that an intending purchaser of an apartment/flat unit has to consider is to identify and select a reputed firm of builders.Since huge sums of money are invested in buying a flat choosing  a builder who by 'market reputation' is trustworthy could give  protection to the investment.  In this regard the following points may be considered:

a) Check up whether the builder has reputation of maintaining quality yardsticks in the construction of an apartment building.

b) Check up whether the  builder adheres to the time schedule? Delay in delivery of possession  by the builder may prove quite expensive for the buyer.

c) Find out from the previous buyers about the Builder's attitude, trustworthiness,  helpfulness etc.

d) Verify the title deeds regarding the ownership of land on which the apartment building is proposed to be constructed. In this connection, the 

Builder may be insisted upon to make available the following documents  for verification :-

i)Copies of all land documents for scrutiny starting  from the original site allocation to the buying party of the first sale and all subsequent sales thereafter, ii) Possession certificate, iii) Latest Tax paid receipt, iv) Khata certificate from the Municipality, v) Encumbrance certificate

e) Insist upon furnishing a  list of  buyers of other apartment units in the same building with details of sale consideration received from them for their apartments. Also find out whether any of the purchasers has been given any extra advantages in the apartment building;

The Builder will  have to inform the apartment unit holders about the need for formation of a Apartment Owners Association/Society under the K.A.O. Act, 1972,  to be formed after the 'completion certificate' is received.The above Act also forbids the builder to give possession to any buyer to occupy before the 'completion certificate' is obtained from the municipality. The Act referred to above also mentions about the advance payment amounts asked for by the builder.

Basement  parking  area
Logically builders cannot charge for the basement parking land, because the land price is already included in the cost of the apartment. Every apartment owner automatically owns a certain percentage of the plot on which the building is built when buying a flat. This proportion of land ownership is shown in the "Deed of Declaration,' which the builder has to execute and register for the Society to be formed. However, no apartment owner can claim exclusive ownership of any particular part of the basement area as their own, because these are known as 'Common Areas' in the Karnataka Apartment Ownership Act, 1972.

Apartment  on  the  terrace  floor
Most apartments built on the terrace floor, are usually unauthorized since such constructions shall have no building plan sanction from the competent authority. Therefore, the flat purchaser should get this aspect cleared from the builder as to whether there would be any construction on the terrace. Similarly, the purchaser has to go through the building plan sanction order issued by the municipal authorities before he finalizes any deal with the property developer.

Maintenance  costs
Buyers for whom recurring costs are of no consequence may want more facilities on the large residential property. However, many buyers may look carefully at the monthly maintenance costs they are to incur for the facilities offered. Therefore, apartment buyers need to pay a close attention to the numerous facilities and attractions, the builder is offering in the project. This may include i) Uninterrupted water supply through bore wells in the layout;  ii)Large landscaped areas, iii) Club house, swimming pool, tennis court, children's play park, gym. iv) Multiple electric points for generator power, v) piped gas. vi) Mini market etc. All these facilities will have a bearing on capital costs and monthly maintenance costs for the buyer.

We shall examine these facilities  one by one.
i) Bore well:If not used judiciously, bore wells do dry up. Bore wells are all interconnected underground and so a great many bore wells go dry and hence cannot supplement the city's main water supply for long.

ii) Landscaping:In a large property landscaping is necessarily on an extensive scale which requires water in large quantities. Therefore the installation of a Sewage Treatment / Water Recycling plant, becomes a necessity, to generate usable water for landscaping, water closet lines, etc.

iii) Clubhouse:Club house and its facilities also  consume water in large quantities.Consider filling the swimming pool once and then connecting a water filtration plant operating continuously to keep the water clean for swimming.

Builders developing large acres of land would do the city a great service by installing Sewage Treatment & Water Recycling plants, on the properties they develop. There will be plenty of recycled water for large landscaped areas and will save significant quantities of municipal and bore well water. This would certainly add to monthly maintenance's expenses, but the extra purified non-potable, water can very easily be sold to recover some expenses. Builders will otherwise leave this water problem for the buyers to solve. Do not forget, water scarcity is an on going world-wide phenomenon.

iv) Multiple electrical points on generator:For any extra electrical load, a bigger generator is required, which means a higher capital cost and therefore a higher, A.M.C.(annual maintenance cost). When an added cost is not equally useful to those having to pay for it, then it is an unfair cost.Your apartment may be closed for months, but you end up paying the higher diesel consumption every month for use of extra light points on generator power for others.

v) Piped gas:Piped gas in a residential building of, say, 30 apartments, needs storage space for about 44 cylinders. i.e., one bank of 22 cylinders on tap and the other bank of 22 cylinders awaiting replacement. Gas banks have to be built as per specifications of the fire department with municipal permissions and licenses.Municipal inspectors carry out regular checking of the installation.

In hotels and hospitals where gas banks are commonly used, there are full fledged well trained engineering,maintenance and security departments looking after all operational problems of the facilities in place. Access to those areas are restricted and closely guarded.

In the case of apartment building, neither the builder, who offered the facility, nor the gas company that installed the gas lines in the building, will shoulder the responsibility after their work was certified by the Fire Brigade department and the municipality. So, given the Society's inadequately numbered and trained staff, the responsibility for any Building Society's management committee is huge, with so many lives in the building and the adjoining neighbors on all sides are at stake.

vi) Mini Market : Shopping facility created close by for daily consumables is a good idea. Check on the plans as to where it is to be located on the property? Check the ownership clause the shops have because the builder will have gone and the shop owners may not respect your need for cleanliness in the area.

Neither architects, nor builders, bother much about 'in-built' security for apartments in their designs.Very often, the architects and builders, are more concerned about the design of a building to make it attractive rather than how secure the apartments are in their design, to prevent easy access, from one apartment to another through  balconies or the windows.

Nor do Architects and builders look into the issues of noise filtration from one apartment into the other. Light switches on common walls, are placed 'back to back,' to reduce the construction costs. Noise at nights of the loud conversation, T.V. noise etc., passing through these openings in common walls with adjoining apartments would be quite disturbing.

Many builders, may lower their construction costs by various methods and the following are some of them:-

1) Reducing floor slab thicknesses than what is stipulated in the building laws.

2) Reducing ceiling heights of apartments.

3) Reducing room sizes to those as shown in the plans.

4) to prevent these cost saving methods by the developers physically inspect your apartment, including, kitchen and bathrooms and compare details as printed in the brochure given to you.

5) Peruse the orders of the National Consumer Commission & other Courts for fees charged for electricity & water connections.

6) Make sure that a clause delay in giving possession of your flat because you may need to extend your stay in the place where you may be presently staying, waiting for your new apartment to be ready.

7) Many builders may insist for declaration of 'No Claims' from buyers so as to absolve themselves of the penalty for their wrong doings or deficiencies in the apartment building. This is an unfair 'trade practice' and you can refuse to sign such a declaration.

8) Make sure that all action for maintain of Apartment Owners Association is taken by the builder in terms of Karnataka Apartment Ownership Act, 1972.

Be mentally prepared to be a 'joint' owner of certain common areas and facilities in the apartment building.Take the advice of, or engage a local lawyer for all legal matters when buying an apartment.List out all documents required for your records. Check out legality of financial outgoings and firm up the schedule for payments with the builder, that you have to make.

You should get involved more into the buying process of your apartment as mentioned above. Apartments which are ready for occupation, or are occupied could be inspected and checked from the angles as mentioned above. Go step by step and do not hurry up. After all it costs a lot of money and above all it is an, 'appreciating asset' for you.

Bangalore property
property for rent in Bangalore

Tuesday, 29 April 2014


The term "Insolvent", in common parlance is referred as Pauper or Bankrupt. An insolvent is not considered a legal person for the purpose of enforcement of any obligation committed by him either during the pendency of insolvency proceedings or after he is adjudged as insolvent.

Adjudication of an Insolvent
In India, jurisdiction of the courts to adjudicate a person as an insolvent has been conferred by two Acts, namely, the Presidency towns Insolvency Act, 1909, which is applicable in the Presidency towns in India and the Provincial Insolvency Act, 1920, applicable in the muffusil areas.

To adjudicate a person as an Insolvent, such a person has to be a "Debtor" and should have committed an act of insolvency. A debtor, under these Acts, includes only those who are subjected to Indian laws, either by birth or by domicile including a temporary residence.Thus, a foreigner cannot be adjudged insolvent by a court in India unless the alleged act of insolvency was committed or suffered by that person during his personal residence in India.

Minor cannot be adjudged Insolvent
Under Indian Laws, as a minor is not competent to enter into a contract he cannot be adjudged Insolvent even on his own petition. In the case of a minor being a partner in a firm consisting of adult and minor partners and if adjudication order is sought against the firm, the same shall be binding on the firm/partners except the minor.

Property of insolvent
The expression "Property of an Insolvent", has been defined as only the property of the insolvent which is divisible amongst the creditors and not otherwise. It includes any property over which or over the profits of which any person has the power of alienation which can be exercised for his own benefit.

The word 'property' includes the right in the property or things of a person. However, to constitute the property, an insolvent should have an interest in present to dispose of the same and not such an interest which may depend upon the fulfillment of certain conditions or contingencies.

Appointment of Official Assignee or Receiver
 Under section 17 of the Presidency Town Insolvency Act or section 28(2) of Provincial Insolvency Act, 1920, after the order of adjudication, the property of an insolvent vests in the Official Assignee and becomes divisible amongst the creditors, irrespective of its situation. However, when an order of adjudication has been passed under the Presidency Town Insolvency Act,1909, any order of adjudication passed against the same insolvent by the District Court of another place, at a later date under Provincial Insolvency Act will not operate since the said property is already vested in the Official Assignee under the Presidency Town Insolvency Act.

Movable and Immovable property
The order of adjudication operates as a statutory transfer to the Official Assignee of all the property of the insolvent person in India, whether movable or immovable. Similarly, the movable property of an insolvent situated in foreign country shall vest with the Official Assignee or Receiver. But, the immovable property of an insolvent situated in a foreign country, shall be governed by the law of the country within whose jurisdiction such property is situated.

Divisible and indivisible Properties
The property which is divisible amongst the creditors of the insolvent can only vest with the Official Assignee or the Receiver, which may be:
1. Property belonging to an insolvent at the time of commencement of insolvency proceedings
2. Property which may be acquired by or devolve on the insolvent after the order of adjudication and before his discharge.
3 .Goods in possession, or disposition of the insolvent.

The properties which are not divisible amongst the creditors of the insolvent falls into two classes:
2.   Tools of trade, apparel and other similar property.

Vesting of property in the Official Receiver or Assignee
Immediately upon an order of adjudication by the Court, the property of the insolvent wherever situated vests in the official assignee/receiver. Till an Official Receiver is appointed by the Court, all the rights and powers exercisable by the Receiver can be exercised by the Court itself.

Intervention of Official Assignee is must:
The right and interest of an insolvent over the property do not automatically get transferred in favor of the Official Receiver upon passing of an adjudication order by the court unless the Official Assignee intervenes on behalf of the insolvent.Where the official assignee does not intervene and the insolvent transfers the said property to another person who takes it in good faith and for value, the transferee acquires a good title to the property.

Powers of the Official Receiver or Assignee
With the order of adjudication, the property of the insolvent vests in the Official Assignee or the receiver and it is the duty of the assignee to realize such properties of the insolvent expeditiously and to distribute dividends to the creditors entitled thereto. However, before exercising the power of realization of properties of an insolvent, abundant caution has to be exercised by the assignee to avoid unnecessary litigations.

Under the aforesaid Acts, certain powers have been vested with the assignee:
1. Power to sell: The Receiver is empowered to sell the insolvent's property without the consent of the Court. But the aforesaid Acts do not empower the receiver or the official assignee to sell anything more than the property of the insolvent which vests in him by reason of the adjudication. 

2. Power in case of mortgaged property: Where a Receiver is appointed by consent of the parties after passing of a decree in a mortgage suit for sale of such mortgaged property and it is agreed that the receiver shall recover the rents of the property for a period of one year to hand over the same to the mortgagee, the mortgagee's right to receive the rents will not be affected by insolvency of the mortgagor at any time during this period and neither the official assignee nor other decree- holders will be entitled to a rate able distribution of such rents.

Bonafide Sale
Section 53 of the Provincial Insolvency Act provides that a transfer of property not being a transfer in favor of a purchaser in good faith and for valuable consideration shall, if the transferor is adjudged insolvent within two years after the date of transfer, be voidable as against the Receiver. Further, where the debtor transfers all or substantially all the properties in consideration of the past debts, such a transfer constitutes an act of insolvency since it has the effect of withdrawing all the property from the legal process, which his creditors have a right to enforce against the insolvent.

Thus, an order of adjudication of insolvency will deprive the insolvent from dealing with his properties which shall be dealt with by the Official Assignee or Receiver when once such a person is appointed by the Court.


Monday, 28 April 2014


(Bangalore property|apartments|flats|lands for sale in Bangalore)

The documents relating to a property inter alia include title deed, mother deed, encumbrance certificate, khata, property tax payment receipts, building plan etc. These documents may be original or may be extracts or Photostat copies. Some of these documents are in the nature of evidencing payments, authorization, permission, approval etc. More often than not, you may be noticing advertisements in news papers regarding the loss of property documents with a lucrative offer to suitably reward the finder upon return of the same.

Reasons for non - availability of property.
The reasons for non-availability of documents may be many. The following are few such instances:

a)  The original title deeds might have been kept in the office and got mixed up with other documents. In this case, even though the original title deed is not lost, it is owing to the fact that the documents are not traceable even after search, the necessity to take further steps for protecting his interest by the owner does arise.

b)  The original title deed might have been lost, stolen or might have come into wrong hands. In such cases, there is every possibility of a fraudulent transaction being effected by making use of the original title deed by the possessor of such a document unless the real owner acts swiftly to protect his interest over the documents

c)  There may be some cases wherein a person has mortgaged his property by deposit of title deeds as security for the loan obtained by him. On the basis of a certified copy of the title deed, he may sell his property without redeeming the mortgage. In such circumstances, the innocent purchaser will not get title over the property since the mortgagee has a first charge.

d)   The property documents presented for registration in the Sub- Registrar's office are to be collected within a reasonable time but not later than two years since the documents remain uncollected in the Sub- Registrar's office can be weeded out after the lapse of two years period. In case a person who failed to collect the property document within a period of two years and the said document is weeded out, then the said person at the most can get a letter from the Sub- Registrar's Office confirming the submission of the document for registration and the same has been weeded out as per rules since it was not collected from the office within the stipulated period.

Partition Deed
In a partition of the family properties, if a particular property falls to the share of more than one person, then all them cannot have the original title deed of such property in their custody. Therefore, as a precaution it shall be clearly mentioned in the partition deed that the original deed shall remain with a particular individual who shall declare and under- take to produce the original deed for verification whenever requisitioned by other sharers of the property. For use and custody of persons who do not get possession of the original title deed, they can obtain duplicate copy of the document at the time of registration.

Deed and Documents
To know the implications of the loss of property documents, it is better to understand as to what is meant by a deed and what is the difference between a deed and a document.A deed is a written document or instrument under which the right over a property is transferred from the transferor to the transferee. It may be noted that all deeds are documents but all documents are not deeds. The word "deed" has a wider meaning.It is to be properly executed, signed and delivered. Normally, it is registered.Examples of deed would include sale deed, settlement deed, exchange deed, partition deed, gift deed, release deed, etc. Examples of documents other than deeds would include photographs, maps, building plans, writings on various materials and substances, khata, encumbrance certificate, tax paid receipt, unsigned records, certificates, etc.

Effect of loss of documents
Loss of original title deeds may lead to a lot of complications, affect or impede free dealings with the property causing great anxiety, stress and trepidation for the person who has lost these documents.Loss of title deed reduces the strength of ownership title of the owner.The intending purchaser or the mortgagee may suspect the genuineness of the title of the vendor or mortgagor.The moot question is 'why do they suspect?' and the answer to this is that the deposit of title deeds does not require registration. By mere depositing the title deeds, a person can create mortgage of the property to avail loan from banks and the financial institutions. The period of redemption of mortgage is 30 years.

Suppose a person purchases a property for a valuable sale consideration ignoring that the vendor does not have original title deed and suppose at some earlier stage the property has been mortgaged by deposit of the title document by its owner, then irrespective of the fact the purchaser has purchased the property for valuable consideration he will not get rightful ownership over the property but, the mortgagee has a first charge over the property though ownership is changed. In most of the cases, lending banks do refuse to grant loan in the absence of original title deed and the intending purchaser may back out of the transaction in the absence of the original title deed.

It is obvious that in most of the cases people would become nervous when they lose their property documents since they have a feeling that their title over the property is lost for ever with the loss of property documents and thereby they conclude that they have lost their right to deal with property any longer. It is the loss of the original deeds such as sale deed, gift deed, will, mortgage deed etc., that will have impact since by virtue of these documents, the finder of the document may misuse the same.But, loss of document does not deprive the owner of his ownership over the property, if necessary precautions are taken well in time. Loss of the original title deed requires urgent action.

Loss of documents such as encumbrance certificate, Khata certificate, tax paid receipt etc., does not have serious implications since it is possible to make up the loss of these documents by applying and getting certificates afresh from the concerned authority.

Steps to be taken
In most of the cases, with a careful timely action and planning, it is possible to protect interest and title in the best possible manner.A sincere effort also should be made to trace out the lost document and to rebuild the records. It may be noted that if a registered document is lost, then a certified copy on the same could be obtained from the office of the concerned Sub-Registrar.

Normally, in all cases of loss of property documents, it is the foremost duty of the owner of the property to notify the loss of property documents to the public and the concerned authorities without delay.The common practice followed is to notify the loss of the original deed in two leading and widely circulated news papers, one in English language and the other in vernacular language requesting the finder of such documents to deliver back the said document which will be suitably rewarded. Lodging a police complaint and obtaining acknowledgment from the police also is considered as evidence for the loss of document.

To avoid complications by virtue of loss of property documents, the owner of the property should act swiftly and take appropriate action to protect his right, title and ownership over the property.