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I intend to buy a BDA approved society site which was formed in 1998. The current owner has the the original allottes's possesion certificate, sale deed between society and original allotte, BDA khata in the name of original allottee etc. The latest EC also shows clear chain of ownership. However, he does not have the allotment letter sent by the society to him. The Society's sale deed is an absolute sale deed with no conditions attached other than the fact that original allotee can not sell before 5 years of allotment (he sold after 6 years to a second party)

My lawyer has cleared the property but the bank raised a query that allotment letter is required. Later on, the bank said it has no legal implications but is required only for audit purposes. When I checked with a few folks, they said that it is tough to go back to the society and request for an allotment letter.

Bank says that they will clear the loan as this is not a priority 1 document and will have no impact on ownership. But it is possible that anyone I may want to sell in future may be asked to provide this document by his/her bank

Anyone faced any such issue in the past? Any advise on how to move forward?

Hi Krishna
To my knowledge allotment letter is not a major document ,it has no legal value.I don't think you will have problem of selling the same site to other party.As long as owner ship chain is clear in Ec there is no problem.

Regards
ADMIN

Thanks, Namburi.

Ram

I would be wary of purchasing a site that has even a minor document such as an allotment letter missing as there are certain risks involved. Sometimes the seller enters into an agreement taking an advance of a certain amount of rupees. The buyer who enters into the agreement would request a original letter such as allotment letter to be handed over as the agreement is not registered. This is to safe guard the interest of the buyer as without the allotment letter, the documentation would not be 100% complete. Now if the deal does not go thru, and the seller sells the same property to some one else, the first agreement holder can file a case and force the parties to come to a settlement. For a buyer it is difficult to say whether the seller has really lost the paper or handed it over to some other buyer in a prior arrangement.


Incase of BDA/MUDA, etc, there is a procedure to obtain a "nakalu" allotment letter ( A certified copy of the allotment letter) by the seller filing a police complaint and then applying with the BDA/MUDA for a duplicate copy. I am sure these societies can also provide a duplicate copy as all they would have a copy of allotment letters.

Thanks, tvsh. In this case, the allotment happened 14 years back and a sale agreement was executed to the first allottee also around 14 years back. The property has changed 2 hands already and the EC and khata extract for the last 14 years is very clear. The sub registrar office does not have any cases registered against the property.

Even if anyone entered into an agreement it should not be valid at this point right? Also, even if it were, it would be a case of fraud against the owner than an issue of ownership of property right? How can anyone with just an original allotment letter claim to be the owner without having a registered sale deed?

rkrishna,
As mentioned in earlier post, Allotment letter plays very little role compared to other documents like Sale agreement, Sale Deed, Katha, Possession certificate and EC.
Having said this, even a copy of allotment letter can give more information if any condition is applied during the site allotment.
Please go through the Absolute Sale Deed between the Housing society and Allottee and check if any clause is mentioned like "Site allotted as per Govt ACT 1984".
A single such line in allotment letter can mean more than a list of condition added in sale deed.

PS. Even a copy of allotment letter is good enough to play safe .

Absolute Sale deed just mentions
"Whereas the purchaser being a member of the society, applied for the allotment of the site in the layout formed in the above said lands and the society has alloted a site bearing No XXXX measuring YYYYY in the layout formed in the above said lands which is more fully described in the schedule hereunder .... and in pursuance of the allotment the purchaser has paid a sum of Rs ZZZZ". There is no clause like Govt Act 1984.

Only condition mentioned is that allottee can not sell for 5 years from the issue of possession certificate. The possession certificate is available.

There is one more clause that states "Society is exempted under section 26 of the urban land act 1976 vide No ULS ADIL (8) dates 3-2-1982". Not sure if this is relevant.

The current owner says that site was allotted to the first allotee on a lottery basis. There are some letters addressed to the first allotee wherein the society has been asking him to pay installments etc.

rkrishna wrote:Thanks, tvsh. In this case, the allotment happened 14 years back and a sale agreement was executed to the first allottee also around 14 years back. The property has changed 2 hands already and the EC and khata extract for the last 14 years is very clear. The sub registrar office does not have any cases registered against the property.

Even if anyone entered into an agreement it should not be valid at this point right? Also, even if it were, it would be a case of fraud against the owner than an issue of ownership of property right? How can anyone with just an original allotment letter claim to be the owner without having a registered sale deed?

Rkrishna,

Every single transaction is accompanied by an agreement, unless the site is an outright purchase. So the allotment letter can be issued to a prior agreement holder by even the current owner of the site. The sub-register only knows about agreements that get registered. Most agreements do not get registered, however they are still valid ( but under stamped, there is a 10 times penalty to file a case).

It does not matter if an agreement is valid or not to cause trouble. Say for example, one enters into an agreement for 3 months, one can file the case even after 3 months, though the agreement has lapsed.

Ex: One purchases a site that had a previous uncancelled lapsed agreement and goes about construction of the site. Midway during the construction, the original agreement holder files a case saying that the previous owner took an advance and entered into agreement and failed to register it in his name, even though he was ready for registration ( the fact could be other wise). Till the case is disposed off there will be a stay on the construction and the person constructing the home will be in limbo, unable to finish the construction, he will enter into a compromise paying a few lakhs of rupees to have the case withdrawn. I am not saying this will happen in each and every case, all I am saying is that there is a risk involved, hence better to take suitable precautions.

Thanks, tvsh. Is not this a general risk even if allotment letter were present? i.e. one of the previous sellers could have entered into an agreement that is not registered and there is no way to find out that there was an agreement earlier between any of the earlier owners and a third party? Is not there a timeframe by which any such disputes have to be filed in court?

The current owner has been holding this site for 7 years. He is an advocate and assuming that he is trust worthy, is the risk considerably less? Also, we intend to advertise in newspaper about our intent to purchase the property and send letters to all the earlier owners.

Rkrishna,

There is a general risk even if the allotment letter is present. However any single document ( not necessarily an allotment letter, it could be a possession certificate as well - after all what significance does a possession letter have? Possession is also handed over in sale deeds) missing raises a red flag. Once you force the seller to get a duplicate, he has to file a complaint about having lost the document. The seller will take the extra step, if he has lost the document. On the other hand if he has not lost it, he will be reluctant to file a police complaint.

I cannot judge a person I have not met, so I do not know about this advocate. There are crooks in all professions and being an advocate, he has the tools/training neccessary to take of legal loop holes. Advertising in the newspaper is good. However, it only shows that you have done all due diligence on your part. Advertisement by itself does not take away some one else's right if he had entered into an agreement prior to you.