Lease cum sale deed - Clarification required

[nagsbhat]

Hi,
I recently bought a society site on a resale. It was allotted to original owner in 1994 and was registered in the same year as lease cum sale deed with 10 year lease. I bought from the original allottee in 2011. I went for loan from Axis bank and got the loan also. Now society is saying I should have got absolute sale deed and NOC from society before buying it. They are saying they can cancel the lease-cum sale deed and asking me to get an absolute sale deed. It is obvious that they are looking for making some money.
Question: Is it required to get absolute sale deed from society given that the lease period was long over (2004 itself).

[ecopackindia]

Dear Sir,
Yes. To get the proper conveyance, you must have obtained the Absolute Sale Deed, before the purchase.
The sanction of bank loan does not confer any title to you. Even if the site is taken away, you have to repay the loan with additional recovery and penalties.
Better, get the absolute sale deed in your favour at extra cost to have a good and perfect title. The Society by its bylaws may initiate action for the cancellation of the lease cum sale deed, for the default of the condition laid down in the lease cum sale deed, you might have more troubles. Prevention is better than cure.
ecopackindia

[nagsbhat]

Thanks for the info. However, I went to BDA yesterday to check if they insist to have absolute sale deed. They (case worker) clarified that, if it is lease cum sale 'agreement' then only they issue absolute sale deed. If it is a lease cum sale deed then it automatically becomes an absolute sale deed after the lease period is over. Also, if there is no violation of the lease cum sale deed society can't cancel the site it seems. In my case original lease cum sale deed does not stipulate any conditions that are violated. I am really confused and concerned.

[ecopackindia]

Dear Sir,
There is no confusion. It is clear. You have lease cum sale deed.
You must have the absolute sale deed to have perfect title and have to make an application to the BDA (in case of BDA site)and obtain the same. It is simple. It is a lease cum sale, but even the BDA issues the Absolute sale deed for all their properties. (An Example)The CITB had allotted a site in 1970 in jayanagar(which is worth Rs4 crores as on date) and in 2011, the buyers of the property demanded the absolute sale deed. The first generation of the sellers are no more. The sellers of this property must get the absolute sale deed from the BDA.
Understand the meaning of lease cum sale, Lease cum sale is not sale.
Check the by laws of the society. Consult an advocate.
What is the harm in obtaining the absolute sale deed, when it is available? If the said society initiates some action or issues a show cause notice, you will have to run around the courts for years, even though, you will win, but ?????.

ecopackindia

[nagsbhat]

Thanks for valuable info. Going to get absolute sale deed.

[msn1270]

Its wise to consult an advocate and understand the Terms and Conditions laid out by the society for the original member - allottee during allotment and its applicability in future transactins i.e. for selling, construction...etc. During resale transactions or for non-residential purposes, Getting NOC from the respective Societies is essential, which may attract a nominal price.

[nagsbhat]

Thanks for the info. I consulted two advocates and axis bank has also given loan. Based on the content of the lease cum sale deed, they say absolute sale deed is not required. But the society insists on getting the absolute sale deed. As suggested by ecopackindia I have decided to approach the society.