An Article Regarding "LAND CONVERSION"

LAND CONVERSION

Purchasing house site is the dream of a Middle class person family Unprecedented growth of urban areas, due to Industrialization and consequent unending migration of rural folk, agricultural labour for employment opportunities and professionally qualified persons in search of greener pastures, migrate to metros, or mega cities A case in point is Bangalore. It was at one time aptly called as 'Pensioner's Paradise.' It was a pleasure to see elders slowly walking, chanting, Sri Vishnusahasranamam, in today's commercial hub of the city like, Seshadripuram, Malleswaram, and Basavanagudi. Youngsters used to play cricket on the roadsides, footpaths were so large which could be used for learning cycling by children. Nowadays one has to walk holding one's breath not sure whether he can reach home safe.

This unbridled growth of Bangalore with comparatively better income for most of the people has made demands on housing very great. This has led to many ways, legal, illegal, dubious, ethical or otherwise to own a piece of land and to have a shelter /roof over one's head. Bangalore basically was a small town surrounded by number of villages. Land Developers, who landed in Bangalore, started converting agricultural land into residential pockets. 

In villages, a small residential area will be there, where houses of the farmers are situated; the houses there are given Khaneshmari No. And the residential pocket in a Village is called Gramathana, as distinct from village as such where agricultural land is surveyed and given Survey No. for each piece of land. Thus, every piece of land is assigned a Survey No. (except Kharab lands) which are classified into class 'A' and 'B', depending whether it can be made arable / cultivable, by making certain improvements and others whose nature cannot be changed. A legal procedure has been laid down for change of use of the land from agricultural purpose to non-agricultural residential purpose. 

This requires an order from the Deputy Commissioner. Purchase and possession, use of agricultural land by Non Agriculturalists, for purposes other than agricultural farming is prohibited in the State of Karnataka, by law. However, land duly converted by the Competent Authority can be purchased for development as Residential lay-outs. Hence, the question what is conversion of land. In simple terms, it is the permission granted by Revenue Authorities to change the usage pattern of land from Agricultural to Non Agricultural - Residential or Industrial use. In and around cities and towns and especially on the outskirts of Bangalore, this is going on in a rapid phase. 

The Government had by its various Comprehensive Development plans, shrinking the size of agricultural land to almost 'Nil' around Bangalore.
The Official Procedure of Conversion is detailed below: 

A conversion Order passed by the Deputy Commissioner is a serious exercise scrupulously followed by the Revenue Authorities, after verifying the fact that there is no contravention of the provisions of the Karnataka Land Laws relating to the provisions of the Karnataka Land Revenue Act, 1961, Karnataka Land Grant Rules, KPTCL Act, and the Land Revenue Rules relating to Green belt. Likewise verification is also done in respect of acquisition of any scheme of the Government and the Bangalore Development Authority.

Thus, permission accorded by the Deputy Commissioner, for change of land use deems that there is no violation of any of the revenue rules prohibiting conversion of agricultural land. It is also relevant to ring forth that the burden of verification regarding the above laws lies only on the Tahsildar, and an applicant shall not be asked to provide any documents for the same. The said report prepared by the Tahsildar is then forwarded to the Deputy Commissioner, with his opinion; it is only on the receipt of the opinion that the Deputy Commissioner accords permission as mentioned above.

The Deputy Commissioner shall also verify and satisfy himself that the change of use does not cause any public nuisance and that the land sought to be converted are not inconsistent with the purpose specified in the Comprehensive Development Plan and the Outline Development Plans. Cumulatively it appears that the land on which permission is sought is clear as far as satisfying the requirements of law governing conversion and revenue. On going through the conditions enumerated in the said Official Memorandum, certain duties and obligations are cast on the applicant namely the necessity for having the Layout Plan approved by the BDA / Local Authorities like the Panchayat, Pollution Control Board, etc., which on necessary applications clear the development of Layout as per the respective provisions contained in the Act.'

Any prudent buyer of land should think twice before investing his hard earned money in land. Revenue lands are sometimes regularized, in Schemes like 'Akrama-Sakrama' and approved by the Revenue Authorities, However, if it is not regularized, a Damocles' sword hangs on the head, any time the title held on such 'Revenue site' is not absolute, free, marketable. In simple terms it is illegal and the buyer of such lands will be in jeopardy of losing the land, money, and cannot hope for any legal remedy, like compensation. As the famous Doctrine 'caveat emptor' - 'Let the Buyer Beware' goes to say, any buyer interested in investing in land should thoroughly examine the titles, preferably by a qualified Advocate/ Attorney, who can do a methodical investigation of title.

An Article Regarding "SLASH GUIDE LINES VALUE"

SLASH GUIDE LINES VALUE

Guide Lines Value are the estimated minimum value fixed by the Government for a property In a specified area for purposes of registrationof sale deed on which stamp duty and registration charges are payable. These are the values fixed by the Department of Registration & Stamps for purposes of registration of documents. It is needless to say that the guidelines value would vary from one area to another. This is also differentfrom the prevailing market value of the property.

If the purchase value of a property is more than the guide lines value, the stamp duty and registration charges are to be paid on thepurchase value. The guidelines value would change as and when the value of properties would go up or down at the discretion of the Government. The present guidelinesvalue in Karnataka has been force with effect from 19- April, 2007. 

Vicious circle

When the Government increases the guide lines value, the priceof properties begins to soar, when the market value increases, the government enhances the guide lines value and thereby the guide line value and the marketvalue are trying to catch each other in the race.

For many owning a house has become a day dream in view of high cost of land and buildings and with the reduction of their purchasing power dueto under- employment and unemployment. At the same time, the propertydevelopers are finding it difficult to get buyers for their properties despite their voluntary reduction in the value of properties due to market crash on account of global recession. The rise and fall of rates are natural phenomena in any business and the Government should allow sector to have its natural course of settlement.

Social obligation 

Government has a social obligation to cater to the housing needsof the public. Such affordable houses need not be small hutment, but should at least have minimum requirements like bedroom, kitchen, toilet, hall etc, with sufficient ventilation. By frequent abnormal increase in Guide lines value, the poor and the middle class people are finding it difficult to purchase the houses. Real estate investment is becoming the exclusive domain of rich and influential. The government has a duty to not to fuel the price rise. The Government itself is subverting its social obligations.

Stamp duty and Registration Charges 

Stamp duty and registration charges are very high inKarnataka. As and when the guidelines value increases, payment of stamp duty and registration charges also increases and thereby there is an additional burden on the purchaser of a property. Apart from these charges, the purchaser has to pay sales tax, service tax and charges for transfer of Khatha, power and water connection deposits, etc., and whereas the seller has to pay capital gains tax' in respect of the gain he made in the sale transaction.

Formation of black money 

Due to the increase in stamp duty and registration charges naturally, the parties to a sale transaction prefer to disclose the deflated value of the property in the conveyance deed and avoid payment of higher stamp duty andregistration charges. This, in turn, has lead to accumulation and circulation of black money in the country. Some people may even opt for holding the propertyby way of General Power of Attorney and by executing an affidavit declaringdelivery of possession of the property to the purchaser. Through this method, the people avoid execution and registration of sale document which in turn leads to reduction in the collection of revenue to the State exchequer. State Governmentshould adopt the well established principle that lower the stamp duty andregistration charges higher the revenue collection for the State exchequer.

With the increase in the rate of the Guide lines value of a property in a particular locality, the property owner's liability of municipaltax also goes up and thereby an addi- tional burden is cast on the citizen. Home loans Banks and Financial institutions were very liberal in extending home loans till recently. 

Providing housing loan to people was considered as a national cause in fulfillment of the obligation of providing shelter to a large number of people. However, the quantum of housing loan granted to the borrowers would depend upon their repaying capacity. As the price of the properties increase onaccount of revised guideline values, the borrowers of housing loan may require higher amounts to purchase the properties and their regular income do not match with the requirement of the bank and thereby the borrowers have to curtail their actual housing requirement and may have to be content with a small or substandardproperty.

Capital Gains 

The tax on profit earned on transfer of an immovableproperty has to be paid by the seller. It may be kept in mind that if the value of the property disclosed in the sale deed is lesser than the guide lines value, capital gains tax is payable on the basis of guide lines value. In some cases,the market value of the property is less than guide lines value and the sellermay incur loss. Even in such cases, the guide lines value will be taken as the basis for calculating the capital gains tax and the seller has to pay the tax accordingly. In cases where the declared value of a property in the sale deedis more than the guide lines value, the declared value shall be taken as thebasis for calculating the capital gains tax.

User friendly measures 

The general public has no clear cut guidelines as to the documents which are required to be submitted at the time of registration along with the sale deed. This should be made known to the public by giving wide publicity through and electronic media. Not only may this, the address, telephone number of the sub-registrar offices and their jurisdiction be displayed at prominent public places for information of the public. The Government should implement user friendly measures; reduce the stamp duty and registration charges to come within the reach of poor and middle class. Introduction of the onlineregistration system will also be useful to the public.

Since there is global recession presently, the State Governments should fall in line with the property developers and commercialbanks and without delay reduce the guidelines value which were fixed. when the property values were at their peak since there is considerable slash in the value of properties and the property developers are offering discounts and free-bees to market their unsold properties while at the same time the purchasing power of the people has come down. When all the concerned are trying to lift the real estate sector from collapse, the State Governments' delaying in reducing the guidelines value is unfair and can be termed as a failure of social obligation cast on them.

An Article about "Untapped Potential of low Cost Housing"

Untapped Potential of low Cost Housing

Guide Lines Value are the estimated minimum value fixed by the Government for a property In a specified area for purposes of registrationof sale deed on which stamp duty and registration charges are payable. These are the values fixed by the Department of Registration & Stamps forpurposes of registration of documents. It is needless to say that the guidelines value would vary from one area to another. This is also differentfrom the prevailing market value of the property. 

If the purchase value of a property is more than the guide lines value, the stamp duty and registration charges are to be paid on thepurchase value. The guidelines value would change as and when the value of properties would go up or down at the discretion of the Government. The present guidelinesvalue in Karnataka has been force with effect from 19- April, 2007.

Vicious circle

When the Government increases the guide lines value, the priceof properties begins to soar, when the market value increases, the government enhances the guide lines value and thereby the guide line value and the market value are trying to catch each other in the race.

For many owning a house has become a day dream in view of high cost of land and buildings and with the reduction of their purchasing power due to under- employment and unemployment. At the same time, the property developers are finding it difficult to get buyers for their properties despitetheir voluntary reduction in the value of properties due to market crash on account of global recession. The rise and fall of rates are natural phenomena in any business and the Government should allow sector to have its natural course of settlement.

Social obligation

Government has a social obligation to cater to the housing needsof the public. Such affordable houses need not be small hutment, but should at least have minimum requirements like bedroom, kitchen, toilet, hall etc, with sufficient ventilation. By frequent abnormal increase in Guide lines value, the poor and the middle class people are finding it difficult to purchase the houses. Real estateinvestment is becoming the exclusive domain of rich and influential. The government has a duty to not to fuel the price rise. The Government itself is subverting its social obligations. 

Stamp duty and Registration Charges Stamp duty andregistration charges are very high in Karnataka. As and when the guidelines value increases, payment of stamp duty and registration charges also increases and thereby there is an additional burden on the purchaser of a property. Apart from these charges, the purchaser has to pay sales tax, service tax and charges for transfer of Khatha, power and water connec- tion deposits, etc., and whereas the seller has to pay capital gains tax' in respect of the gain he made in the sale transaction.

Formation of black money

Due to the increase in stamp duty and registration charges. naturally, the parties to a sale transac- tion prefer to disclose the deflated value of the property in the convey- ance deed and avoid payment of higher stamp dutyand registration charges. This, in turn, has lead to accumulation and circulation of black money in the country. Some people may even opt for holding the property by way of General Power of Attorney and by executing an affidavit declaring delivery of possession of the property to the purchaser. Through this method, the people avoid execution and registra- tion of sale document which in turn leads to reduction in the collection of revenue to the State exchequer. State Government should adopt the well established principle that lower the stamp duty and registration charges higher the revenue collection for the State exchequer. 

With the increase in the rate of the Guide lines value of a property in a particular locality, the property owner's liability of municipal tax also goes up and thereby an addi- tional burden is cast on the citizen. Homeloans Banks and Financial institutions were very liberal in extending home loanstill recently. Providing housing loan to people was considered as a national cause in fulfillment of the obligation of providing shelter to a large number of people. However, the quantum of housing loan granted to the borrowers woulddepend upon their repaying capacity. As the price of the properties increase on account of revised guideline values, the borrowers of housing loan may require higher amounts to purchase the properties and their regular income do not match with the requirement of the bank and thereby the borrowers have to curtail their actual housing requirement and may have to be content with a small or substandardproperty.

Capital Gains 

The tax on profit earned on transfer of an immovableproperty has to be paid by the seller. It may be kept in mind that if the value of the property disclosed in the sale deed is lesser than the guide lines value, capital gains tax is payable on the basis of guide lines value. In some cases, the market value of the property is less than guide lines value and the seller may incur loss. Even in such cases, the guide lines value will be taken as thebasis for calculating the capital gains tax and the seller has to pay the tax accordingly. In cases where the declared value of a property in the sale deed is more than the guide lines value, the declared value shall be taken as the basis for calculating the capital gains tax.

User friendly measures 

The general public have no clear cut guidelines as to the documents which are required to be submitted at the time of registration along with the sale deed. This should be made known to the public by giving wide publicitythrough and electronic media. Not only this, the address, telephone number of the sub- registrar offices and their jurisdiction may be displayed at prominentpublic places for information of the public. The Government should implement user friendly measures, reduce the stamp duty and registration charges to come within the reach of poor and middle class. Introduction of the onlineregistration system will also be useful to the public.

Since there is global recession presently, the State Governments should fall in line with the property developers and commercialbanks and without delay reduce the guidelines value which were fixed. when the property values were at their peak since there is considerable slash in the value of properties and the property developers are offering discounts and free-bees to market their unsold properties while at the same time the purchasingpower of the people has come down. When all the concerned are trying to lift the real estate sector from collapse, the State Governments' delaying in reducing the guidelines value is unfair and can be termed as a failure ofsocial obligation cast on them.

An Article About "RENTAL AGREEMENTS"

RENTAL AGREEMENTS

It would not be easy to let out the property and feel free from litigation unless there exists a properly drafted rental agreement. Therefore, it is better to know the salient features of the rental agreements before any property are let out.

Rental agreements in the legal terminology are known as Lease Agreements. The person who transfers the property is called the 'Lesser', and the person who accepts the transfer of property is called the 'Lessee'.

According to section 105 of the Transfer of Property Act, 1882, a lease of immovable property is a transfer of the right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of the price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. In short, a lease is a transfer of a right to enjoy the property of the lesser by the lessee for certain time, during which period the lessee is put in possession of the property upon payment of lease money or rent.

Elements of a good lease

The essential elements of a lease are (1) parties, (2) subject matter, (3) terms of lease (4) consideration or rent and (5) duration of lease. A lease transaction involves commitment by both the landlord and the tenant which are complimentary to each other - the landlord agreeing to let out his property to the tenant in consideration of the alteration.

paying him the rent and the tenant agreeing to pay to landlord the rent in consideration of the landlord allowing him to use the leased premises. A lease is that form of encumbrance which consists of a right to possession and use of property owned by some other person. It is the outcome of separation of ownership and possession.

A tenancy is created not only by an express contract but also by implication by the conduct of parties. Acceptance of rent by the landlord clearly establishes existence of tenancy. A lease of immovable property may be affected either under a registered instrument or under an unregistered instrument. However, in cases where the lease is from year to year or for any term exceeding one year or reserving a yearly rent the lease is to be made only under a registered instrument of lease[Sec.107 of T.P.Act] and the lease agreements for a period less than one year do not require registration.

One Year Period

It is a common practice to terminate the lease agreement at the end of every eleventh month and enter into a fresh Lease Agreement since if the rent is paid on yearly basis or if the period of lease exceeds one year, then it is mandatory to register the lease agreement under sec.17( d) of the Indian Registration Act, 1908. 

Contents

An agreement of lease should be drafted carefully and properly to protect the rights of both the parties and to avoid any misunderstanding at a later date. It should be fair to both the Lessor (landlord) and the Lessee (tenant). It should invariably mention the parties name and address, description of the property, duration of lease, monthly rent payable, date of payment of monthly rent; clause for enhancement of rent on renewal of lease, amount of interest-free refundable security deposit, penalty clause in case of default in payment of rent, liability of the lessee for damages to the property and the fixtures and fittings, notice period in case of premature termination of lease; date of commencement of lease and the date of expiration of lease; notice period and manner in which the notice will have to be served etc.

Obligations of the Lessor 

The first and foremost duty of the lessor is to abide by the terms of the lease agreement in letter and spirit and to ensure that the lessee is allowed to enjoy the leased premises without interference. He hall have to ensure that all the basic and civic amenities are provided to the leased premises. It is the responsibility of the lessor to carry out major repairs to the leased property to make it habitable and pay municipal and other taxes due on the property. The Lessor should ensure that the leased premises is not used for any immoral or unlawful purposes nor allow storing of any hazardous and inflammable materials like explosives, etc. Lessor shall issue receipts for the earnest money deposit and for the rents received by him in respect of the leased property. 

The lessor shall refund the security deposit received from the lessee when once the lease has come to an end. He shall not unfairly make deductions while refunding the security deposit on grounds of repair to the leased property. The lessor is bound to disclose to the lessee any material defect in property with reference to its intended use which the former is and latter is not aware and which the latter could not with ordinary care discover. The lessor is also bound on the lessee's request to put him in possession of the property.

Obligations of the Lessee 

During subsistence of the lease, the lessee has a right to enjoy the leased premises without interference from the lessor or by any person on his behalf. The lessee shall pay to the lessor the monthly rent for the leased premises on the agreed date. He shall also pay the electricity and water bills on or before due dates to the concerned authorities and furnish a copy of the receipt received by him from such authorities to the lessor for his records. The lessee shall always keep lessor informed about the additions or alterations that the leased premises may require to enable the lessor to attend to such work. 

The lessee shall not make any structural alterations to the premises or cause damages to fixtures and fittings during the subsistence of the lease. The lessee is under a legal obligation not to use the leased premises for immoral or illegal purposes nor for storing the hazardous and inflammable materials like explosives, etc. The lessee is under obligation to use the leased premises for self use and not to sub-let the same unless the lease agreement has a provision for sub- letting. 

He shall not cause any nuisance to the co-tenants, maintain the premises in a habitable condition, and on completion of the lease period, hand over the leased premises to the lessor without creating any nuisance upon receipt of the earnest money deposit. If the lessor fails to make any repairs, within reasonable time after notice, the lessee may make the same himself and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the lessor. 

If the lessee comes to know of any recovery proceedings in respect of the leased property, or of any encroachment, or interference with the lessor's right in respect of the leased premises, he is bound to give notice thereof to the lessor.

General grievance 

The following grievances are generally encountered by the lessee and the lessor:

N on-refund of security deposit 

Some lessors (landlords), for obvious reasons, fail to pay back the security deposit to the lessees (tenants) upon termination of the lease agreement or make unreasonable deductions from the security deposit. Generally, the landlords who mainly depend upon the rental income and who would have utilized the security deposit for their personal needs, fail to refund the security deposit as per agreement. 

Thus, when the tenant issues notice indicating his intention of vacating the leased premises or when the lease period expires, some landlords would start dodging till they get the security deposit from another new tenant. It is the common practice that tenants prefer to continue to occupy the leased premises till they get back the security deposit since they feel that to get back their security deposit from the landlord upon vacating the leased premises could be a difficult task. In the absence of payment of monthly rent from the tenant during this period, the landlords resort to adjust the rent against the security deposit till the security deposit wipes out.

Supreme Court expresses anguish against violation of regulatory laws by property developers

Supreme Court expresses anguish against violation ofregulatory laws by property developers

The Supreme Court has come down heavily on State governments and politicians for giving support to builders for construction of illegal andunautho- rized structures and later extending protection from demolition in thename of compassion and hardship. 

It was observed by the Hon'ble Supreme Court that despiterepeated judgments by the Supreme Court and the High Courts, the builders and other affluent people engaged in construction activities, who have over the years have shown scant respect for the regulatory mechanism envisaged in municipal and similar laws, as also the master plans, zonal development plans, sanctioned plans, etc, have received encouragement and support from the state apparatus. 

Whenever orders are passed by courts, those in power have come forward to protect the wrong doer either by issuing administrative orders or enacting laws , for regularization of illegal and unauthorized constructions in the name of compassion and hardship.

Expressing its anguish, the Bench observed that the economically affluent people and those having support of the political and executive apparatus of the state have constructed buildings, commercial complexes, multiplexes, malls, etc, in blatant violation of the municipal and town planning laws, master plans, zonal development plans, and even sanctioned building plans. In most of the cases of illegal or unauthorized constructions, the officers of the municipal and other regulatory bodies turn a blind eye either due to the influence of higher authorities of the state or for other extraneous reasons.

The Hon'ble court further held that no compromise should be made with the town planning scheme and no relief given to the violator on grounds that they have spent a substantial amount on construction of the buildings.

The Hon'ble court while permitting the authorities todemolish the unauthorized Shanti Sports Club of India at Masudpur in Delhi, observed that it is high time that the executive and political apparatus of the State took a serious view of the menace of illegal and unauthorized constructions and stop their support to the lobbies of affluent class of builders and others,else even the rural areas of the country will soon witness similar chaoticconditions.

The Bench dismissed the petition filed by the club challenging the decision by the authorities to demolish the premises, as it was constructed on land acquired by the government in 1965. The Hon'ble courtobserved that in the last four decades, almost all cities, big or small, hasseen unplanned growth. 

In the 21 st century, the menace of illegal and unauthorizedconstructions and encroachments has acquired monstrous proportions and everyone has been paying a heavy price for the same.

Supreme courtdecisions

Lease of Immovable property In SATISH KUMAR V. ZARlF AHMED & ORS [1997] INSC 192 the Hon'ble Supreme Court of India has, inter alia, observed as under: The question that arises is : whether a lease of immoveableproperty from month to month or for 11 months is a compulsorily registerabledocument, though it was reduced to writing as an instrument defined under Section 2(14) of the Stamp Act? A conjoint read ing of the first part of section 107 read with Section 17(1) (d) of the Registration Act, does indicate that a lease of immoveable property from year to year, or for any term exceeding one year or reserving a yearly rent should be made only by a registered instrument and all other instruments, though reduced to writing and possession is deliv- ered thereunder, are not compulsorily registerable instru- ments.

 

Registration of SaleDeed 

In DHARMA NAIKA v. RAMA NAIKA&ANR [2008] INSC 133 the Hon'ble Supreme Court has inter alia observed : The only question that needs to be decided in this appeal is whether the sale deed, which was executed and registered after the commencement of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 [Act for short] which came into force with effect from 1 st of January, 1979 in respect of which sale the agreement for sale was executed before the commencement of theAct, would be hit by the provisions of Section 4 of the Act. 

Dismissing the appeal, the Hon'ble Supreme Court came to the conclusion that after the commence- ment of the Act, if any transfer is effected or any person acquires any granted land by transfer, without the previous permission of the Govern- ment, such transfer shall be null and void and no right, title or interest in suchland shall be conveyed or be deemed ever to have conveyed by such transfer. 

The Hon'ble court further held that so far as the facts of the present case are concerned, admittedly, the transfer was effected after the commencement of the Actby a deed of sale dated 13th of October, 1986 without the previous permission of the Government. That being the position, the Hon'ble court held that such transfer must be held to be null and void and no right, title or interest in such land shall be con- veyed or be deemed ever to have conveyed by such transfer.