Source : timesofindia.indiatimes.com | Dated : May 12, 2020
vaCHENNAI: The Tamil Nadu government has issued an order saying sub-registrars should not insist on inclusion of value of building in the sale document, while registering the undivided share of land (UDS) of newly completed buildings, if it is first sale.
The clarification has been issued by the inspector general of registration in the wake of several sub-registrars insisting on inclusion of the value of newly built apartments or the value of construction agreement in the sale deed along with the value of UDS, if the building has obtained completion certificate. It means, apart from paying 11% stamp duty and registration fees for the UDS, the buyer has to pay 11% stamp duty and registration fees for registering the building also.
As per rules, for a building under construction, apart from the registration of the UDS (paying 11% of the value as stamp duty and registration fees) through a sale deed, a construction agreement is signed between the developer and buyer. The buyer needs to pay only 2% (1% stamp duty and 1% registration fees) for registering the construction agreement. When the building is not included in the sale deed, the savings for the buyer is 9% of the cost of the building. But the flipside is that there is no sale deed generated for a new apartment when the first sale happens. When the same apartment is resold, the buyer has to pay 11% stamp duty and registration fees for the UDS and the value of apartment. In effect, the building gets a sale deed only in the second sale.
However, many sub-registrars were refusing to include UDS alone in the sale deed of completed buildings even it is first sale. Their contention was that there cannot be a construction agreement between the buyer and the developer when the building is completed and the regulatory agency (like CMDA or DTCP) has issued a completion certificate. Hence, for completed buildings, like in the case of second sale, both UDS and value of the building should be included in the sale deed, many sub-registrars insisted.
The developer community has been arguing that even after obtaining the completion certificate, several works would be pending in the apartment. The buyer would specify several alterations, without tinkering with the regulatory parameters. Hence, for all practical purposes, the building should be treated as incomplete, they argued.
Taking a view that buildings under construction and completed buildings can be treated on a par for registration purpose, the IG registration has asked sub-registrars to register if documents are presented for registration of sale of UDS alone in the case of first sale. They have been instructed not to demand inclusion of building in the sale document in the case of first sale.