Title due diligence before a development agreement — Navi Mumbai and Thane

Owners in Navi Mumbai and Thane are regularly asked to sign a development agreement on a brochure and a draft that recites that the owners are absolutely seized and possessed. That recital is not diligence. The developer’s later duties, including under the Real Estate (Regulation and Development) Act, 2016, sit on the title the owners actually have. If the title is leasehold, reserved, under-conveyed or in dispute, the agreement should say so in operative clauses.

Start with what the land really is

• Navi Mumbai nodes are, in the ordinary case, CIDCO leasehold. Read the lease, the term that remains, the transfer conditions, the mortgage clause, and whether a CIDCO permission is a condition precedent. A private agreement does not mutate a CIDCO lease.
• Thane is not one record. Identify the planning authority, and whether title sits in a property card, a 7/12 extract, or both. Match the city survey number to the plot on the ground. A difference in area is a commercial term.
• Take a thirty-year search of the index. Read the mutations. A mutation records what the revenue office was told. It is not, by itself, title.

The society, the promoter, and the flat purchaser

Where a co-operative housing society holds the land, ask whether conveyance, or deemed conveyance through the competent authority, has actually been completed. A share certificate and a no-dues letter are not a conveyance. If the promoter under the Maharashtra Ownership Flats Act never conveyed, the society’s authority to entrust the land to a new developer has to be examined, not assumed.

The agreement should not authorise marketing until the promoter can lawfully sell. A project is not advertised, booked or sold without RERA registration. Phase-wise registration, the disclosed carpet area, and the separate account for seventy percent of the realisations are the developer’s duties. They belong in the agreement as conditions, with a right to stop sales if the registration does not match the building promised to the members.

What the agreement must pin down

• The property, with survey and plot numbers and the area as in the revenue record and as measured, and a covenant about what happens if the two differ.
• Consideration in area or in money, corpus, transit rent, and the date from which transit rent runs. A clause that says the parties will mutually agree is not a clause.
• Who obtains the permissions and the occupation certificate, and whose name is on the licence.
• Floor-space assumptions, including fungible area and transferable rights, with a mechanism if the assumption fails.
• Bank charges, attachments, lis pendens, municipal dues and maintenance decrees. Each is a condition precedent or an expressed risk.
• Tenants, pagdi occupants, and anyone in possession who is not a member. Vacant possession is a fact to be scheduled.
• Termination, security for transit rent, and a dispute clause with a seat the members can reach. A seat outside India, for a society in Navi Mumbai, favours the party who can fund it.

Search the co-operative court, the civil court, the RERA authority and, if the land is charged, the Debts Recovery Tribunal. Read the latest tax bills and the non-agricultural order. If the land was agricultural, the permission and the zone have to match the building being promised. A development-plan reservation is not cured by a clause headed force majeure.