Prop­erty ren­o­va­tion can be done with­out per­mis­sion of co-owner

Floor-wise ownership al­lows oc­cu­pants to make changes in dwellings with­out co-own­ers’ in­ter­fer­ence

HT Estates - - HTESTATES - Su­nil Tyagi

Ex­or­bi­tant rise i n prop­erty prices in the past decade have led to a sub­stant i al rise i n fl oor wise sale and pur­chase trans­ac­tions. Pop­u­lar trends in re­cent times have seen one fam­ily or owner oc­cu­py­ing one floor in a mul­ti­storey house on a sin­gle res­i­den­tial plot. This floor wise ownership of an im­mov­able prop­erty con­structed on a sin­gle plot of land has given rise to vari

ous ques­tions of law and the In­ter­est on hous­ing loan paid for the pe­riod prior to May 2016 ie Fe­bru­ary 2013 till March 2016 will be con­sid­ered as in­ter­est paid dur­ing pre­con­struc­tion pe­riod. Once the prop­erty is con­structed. the amount can be claimed as de­duc­tion in five equal in­stall­ments start­ing from the fi­nan­cial year 2016-2017 till the fi­nan­cial year 20212022.

Se­condly, as per the In­come Tax Act, for claim­ing de­duc­tion of in­ter­est on EMIs paid dur­ing the fi­nan­cial year 2016-17, the loan should courts of law have of­ten been ap­proached on var­i­ous oc­ca­sions to clar­ify mat­ters. One such ques­tion that the Delhi High Court dealt with was whether the owner of a floor of a prop­erty re­quired per­mis­sion from own­ers of other floor(s) of the same prop­erty to carry out ad­di­tional con­struc­tion.

The pe­ti­tioner who was the owner of the sec­ond floor and the en­tire ter­race of a res­i­den­tial prop­erty had sub­mit­ted an ap­pli­ca­tion with New Delhi Mu­nic­i­pal Cor­po­ra­tion (NDMC) for the sanc­tion of plans to carry out ad­di­tions/al­ter­ation works on the ter­race of the sec­ond floor. The plans were re­turned by NDMC prin­ci­pally on the ground that the same were not signed by other co-own­ers of the prop­erty (ie own­ers of other floors. Ag­grieved by NDMC’s re­sponse, the pe­ti­tioner ap­proached Delhi HC. He con­tented that there was no pro­vi­sion in law whereby the sig­na­tures of own­ers of other floors weare re­quired as a pre­con­di­tion for the grant of sanc­tion for de­vel­op­ment of one’s own prop­erty. The con­tention of NDMC was that the pe­ti­tioner had 30% un­di­vided share in the prop­erty in ques­tion and the plot of land had not been sub­di­vided in the records of land and de­vel­op­ment of­fice.The ap­pli­ca­tion for sanc­tion of any con­struc- have been taken after April 1999 and con­struc­tion should have been com­pleted within five years from the end of fi­nan­cial year in which the cap­i­tal was bor­rowed. In your case, since you qual­ify both th­ese con­di­tions, you will be el­i­gi­ble for de­duc­tion of in­ter­est on EMIs paid dur­ing the fi­nan­cial year 2016-17.

The amount for which de­duc­tion can be claimed dur­ing the fi­nan­cial year 2016- 2017 will be re­stricted to ₹ 2 lakh. This de­duc­tion will be in ad­di­tion to the pre-con­struc­tion pe­riod in­ter­est and tion was re­quired to be signed by all co-own­ers.

The Delhi HC up­held a pre­vi­ous judg­ment of the same court that once the prop­erty was seg­re­gated into dif­fer­ent por­tions and mu­tated ac­cord­ingly, there was no re­quire­ment of all the coown­ers to sign the build­ing plans. They would only be needed to sign in case the plot and the build­ing were both co-owned. The sep­a­ra­tion of in­ter­est of the dif­fer­ent co-own­ers was recog­nised by the re­spon­dent by mu­ta­tion of the dif­fer­ent por­tions in in­di­vid­ual names of dif­fer­ent per­sons. The state of an in­di­vid­ual owner could not be de­pen­dent on the sig­na­ture of a per­son who hap­pened to be the owner of a dif­fer­ent por­tion of the build­ing. Thus, there was no re­quire­ment of sig­na­tures of all the co-own­ers.

The Delhi HC also ex­am­ined the pro­vi­sions of the Build­ing Bye-laws, 1983, and said th­ese did not man­date that con­sent of other own­ers of other por­tions of prop­erty be ob­tained for car­ry­ing out any con­struc­tion. It was ob­served that the per­son in­tend­ing to do the con­struc­tion sub­mit plans to be signed by the owner or an ar­chi­tect or doc­u­ments of ownership be pro­vided.

Delhi HC also ob­served that in such cases where the prop­erty was sep­a­rately reg­is­tered and will be avail­able for all fu­ture years till the loan is re­paid.

My chil­dren are of In­dian ori­gin have taken Ger­man cit­i­zen­ship after mar­riage. Can I gift my prop­erty to them?

– Lavleen Kaur I am as­sum­ing you are an In­dian ci­ti­zen res­i­dent in In­dia and are talk­ing of gift­ing prop­erty lo­cated in In­dia to your chil­dren who are not cit­i­zens of In­dia. Per­sons of In­dian ori­gin such as your chil­dren can def­i­nitely own prop­erty in In­dia pro­vided it is not agri­cul­tural land or plan­ta­tion and you can gift it recorded in the rev­enue records, the rel­e­vant ownership doc­u­ments would be taken as ev­i­dence of ti­tle of the por­tion of the prop­erty on which con­struc­tion was to be done. There­fore, Delhi HC said it was dis­puted that the sec­ond floor of the prop­erty in ques­tion and the ter­race above the sec­ond floor were reg­is­tered in the name of the pe­ti­tioner in the rev­enue records. The con­struc­tion pro­posed to be done by the pe­ti­tioner was clearly on his por­tion of prop­erty in ques­tion which was duly recorded in the pe­ti­tioner’s name. There­fore, there would be no oc­ca­sion for NDMC to in­sist that the pe­ti­tioner ob­tain a NOC from the own­ers of the other floors.

In con­clu­sion, the par­ties own­ing a sin­gle plot may de­mar­cate their shares and if the ownership of de­mar­cated shares is ac­cepted by NDMC, there would be no re­quire­ment for the own­ers of de­mar­cated shares to seek an NOC from other co-own­ers to make changes in the prop­erty. to them. Gift of im­move­able prop­erty will be valid only when ad­e­quately stamped and reg­is­tered with the reg­is­trar. Many In­dian states have nom­i­nal or low stamp du­ties for gifts to chil­dren. Please con­sult a lawyer spe­cial­is­ing in prop­erty mat­ters for this. The gift will have no in­come tax im­pli­ca­tions in In­dia for you or your chil­dren but ask your chil­dren to check with their tax con­sul­tants in Ger­many for any tax im­pli­ca­tions in that coun­try.

I own an old build­ing that has 12 ten­ants. They pay rent based on an old pagdi sys­tem and can­not be re­moved as they are pro­tected under the age old Rent Con­trol Act. Since the build­ing is in bad con­di­tion and I get a rent as low as R150 per flat, can I re­de­velop the build­ing? How do I ar­range finance from the bank for re­de­vel­op­ment against the same prop­erty as mort­gage? Can I de­velop it my­self ? Due to an am­bigu­ous de­vel­op­ment plan no builder or developer is in­ter­ested in the pro­ject?

– K P Deol This is a developer pro­posal and not a reg­u­lar loan against prop­erty.

Given the na­ture of the pro­posal it is un­likely that any bank or lender will lend for this pro­ject

You can try get­ting a loan against the se­cu­rity of some other real es­tate. Loan for this pro­ject may be avail­able at the stage where all ten­ants have agreed and ap­provals are in place


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