Digital Goa, July 1 – The Goa Government has launched the Mhajo Flat Scheme to address long-pending ownership issues faced by flat owners and cooperative housing societies. The initiative will enable deemed conveyance where builders have failed to transfer ownership, facilitate the formation of housing societies, and create a legal framework for the redevelopment of ageing residential complexes. Government has proposed a one-time amnesty with a ₹10,000 registration fee for deemed conveyance and a concessional stamp duty for subsequent instruments executed as part of the same redevelopment transaction. The stamp duty is likely to vary based on the location and will be higher for class A cities and lesser for rural areas. The scheme is expected to benefit thousands of residents, particularly those living in around 2,500 housing societies in the state and housing complexes built before the implementation of the Real Estate (Regulation and Development) Act, 2016.
Mhajo Flat Scheme – Official Release
- Mhajo Flat Scheme is an umbrella initiative of the Government of Goa with the objective of safeguarding the interests of thousands of flat owners, securing housing rights, facilitating re-development of old aging housing complexes, and addressing long-standing issues of ownership faced by individual flat owners and Societies across the State.
- The initiative stems from the various long-pending and unresolved difficulties faced by flat owners and cooperative housing societies, particularly in relation to ownership rights, conveyance of property, redevelopment of aging housing complexes and the financial burden arising from existing legal and procedural requirements.
- The key issue faced by the individual flat owners/co-operative housing societies :
No Conveyance (Transfer of ownership of land & Buildings) has been done in favour of individual Flat Owners/ Co-operative Housing Society by the Builders/ Owners/Developers.
It has been brought to the notice of the Government that there are large number of instances, where owners/builders/developers have not executed conveyances in respect of individual flat owners and where co-operative housing societies (CHS) itself have not even been formed or registered at all. Wherever they have been formed, in many instances the land and buildings have not been conveyed by the owners/builders/developers to the said Co-operative Housing Societies. In the absence of a legally recognized body representing the flat owners, there is no entity capable of receiving conveyance, managing common areas or further undertaking any re-development, if required.
A large number of housing complexes in the State are very old and do require re-development on account of structural stability, aging etc.. However, re-development will not be feasible because the conveyance of said existing land and buildings by the builder/ developer has not been executed in favour of the Co-operative Housing Society or apartment owners. Consequently, the Society does not possess clear title over the property and will be unable to effectively undertake re-development, obtain necessary approvals or enter into redevelopment arrangements.
This results in uncertainty regarding ownership and adversely affects the security of tenure of flat owners, leaving numerous families without clear and legally enforceable rights over the properties they occupy. Such uncertainty creates significant hardship, impedes access to financial assistance and re-development opportunities, and compromises the long-term security and well-being of flat owners.
- Impact on Flat Owners: The aforesaid issues have resulted in insecure housing rights, delays in redevelopment of old and unsafe buildings, and significant additional financial burdens on flat owners.
- Measures Proposed under Mhajo Flat Scheme: In order to address these concerns, coordinated measures had to be undertaken by The Co-operation Department, The Revenue Department and the Registration Department under the umbrella ‘Mhajo Flat’ initiative.
The measures are as follows:
- Amendments to the Goa Cooperative Societies Act, 2001 & The Indian Stamp Act (Goa Amendment) and notifications under The Indian Stamp Act and the Indian Registration Act.
With a view to alleviating the difficulties faced by such flat owners and cooperative housing societies, improving living conditions, and ensuring safe and secure housing for their families, the Government proposes to introduce provisions relating to unilateral deemed conveyance and re-development through suitable amendments to the Goa Cooperative Societies Act and the Indian Stamp Act (Goa Amendment).
The objective is to encourage and facilitate transfer of ownership of land and buildings from the builder/developer to the Cooperative Housing societies and the consequent re-development of old and aging housing societies, if required.
The proposed amendments to the Goa Cooperative Societies Act, 2001 seek to facilitate:
- Formation and registration of cooperative housing societies where such societies have not been constituted. To avail the benefit, the society has to apply to the Co-Operation department within a specified timeframe, which will be notified through a notification in the official Gazette.
- Grant of deemed conveyance in favour of cooperative housing societies, where the original owner/ developer has failed to execute conveyance in favour of the society, for whatsoever reason after following the due process within a fixed time-frame.
- Redevelopment of cooperative housing societies through a clear statutory framework, wherever required.
As part of this initiative, the Government proposes to incentivize ‘deemed conveyance’ through an amnesty scheme for a one-time registration of a deemed conveyance through an amendment to the Indian Stamp Act (Goa Amendment) and an appropriate notification under section 9 of the Act reducing the stamp duty to a nominal value ( as per Schedule) and also an appropriate notification under the Indian Registration Act fixing a nominal value as registration fee @ only Rs 10,000/- for the registration of the ‘deemed conveyance’.
This will eventually help in re-development of the old and dilapidated Housing Societies, if required, by initially helping in seeking transfer of ownership of the land and buildings from the builder/owner/developer to the Society and appropriate relief in terms of stamp duty and registration charges in terms of deemed conveyance, and also for ‘initial instrument’ and ‘subsequent instrument’.
The proposed provisions will enable flat owners to obtain legal title to the property through deemed conveyance and undertake redevelopment of their housing complexes, if they so desire, in a structured and transparent manner.
This initiative is intended to benefit housing complexes that have been constructed prior to the coming into force of the Real Estate (Regulation and Development) Act, 2016.
- Reduction of Stamp Duty and Registration Fees on Deemed Conveyance
To encourage registration of instruments of ‘deemed conveyance’ and facilitate transfer of title to cooperative housing societies, the Government proposes to issue orders under the Indian Stamp Act, 1899 and the Registration Act, 1908, capping the aggregate stamp duty and registration fee payable on instruments of the said deemed conveyances at a nominal value.
- Amendment to Section 4 of the Indian Stamp Act, 1899
- Section 4 of the Indian Stamp Act, 1899 presently deals with several instruments used in a single transaction of sale, mortgage, or settlement. Under the provision, where multiple instruments are employed to effect a single transaction, the principal instrument is chargeable with the full stamp duty prescribed under Schedule I-A, while each of the other instruments is chargeable with a nominal duty.
- It is proposed to amend Section 4 by specifically including development agreement within its scope. Consequently, where multiple instruments are executed as part of a single development transaction, the principal instrument shall be chargeable with full stamp duty, while the subsequent instruments forming part of the same transaction shall be chargeable with a stamp duty of only Rs. 1,000 each.
- This amendment seeks to eliminate multiple incidences of stamp duty on instruments forming part of a single transaction thereby removing the ambiguity of double payment of stamp duty.
- Amendment to Article 5 and Article 48 of Schedule I-A
- Article 5 of Schedule I-A, relating to Agreements or Memoranda of Agreement, and Article 48 relating to power of attorney is proposed to be amended to rationalize stamp duty in cases of development/ redevelopment.( principal instrument)
- The amendment provides that where an agreement/ power of attorney grants authority or powers to a promoter or developer for construction, development, sale, or transfer of immovable property, such agreement or power of attorney shall ordinarily attract stamp duty at the rate applicable to a conveyance.
- However, where a Power of Attorney/ agreement granting similar authority has already been executed in favour of the same promoter or developer; and the Power of Attorney/ the Agreement relate to the same property and are executed between the same parties; and stamp duty at the rate of conveyance has already been paid on one first the instrument, the subsequent instrument shall attract a concessional stamp duty of Rs. 1,000 only.
Thus, The MHAJO FLAT initiative seeks to provide secure ownership rights to flat owners, facilitate redevelopment of aging housing society, simplify procedural requirements, and substantially reduce the financial burden arising from multiple stamp duty incidences. Through coordinated legislative and administrative reforms, the initiative aims to create a comprehensive framework for protecting the interests of flat owners/ cooperative housing societies and promoting sustainable redevelopment in Goa.
