Risks
Buying plots from cooperative societies may seem like a good idea due to the attractive prices and installment plans. However, it is important to be aware of the risks involved in such transactions.
You can check this article written by a buyer in one of such properties: Is buying a plot @ Rs 690 per sft in BSNL or Telecom Society in Bangalore North a safe investment?
One of the main issues is that many of these societies do not actually have any land of their own. They may use names such as “BSNL society” or “telecom society” to sound credible, but in reality, they have nothing to do with these organizations. Most of these societies are in the process of procuring land from local farmers, which can take up to 10 years.
Even if the land is procured, it cannot be simply divided and registered under the buyer’s name. The land needs to be converted and approved by the Bangalore International Airport Area Planning Authority (BIAPA). This process can be lengthy and expensive, and there is no guarantee that the layout will be approved.
Furthermore, there is a risk of dealing with fake or fraudulent cooperative societies. These societies may be running Ponzi schemes, and buyers may end up losing their investment.
To avoid these risks, it is important to ensure that the cooperative society is genuine. The society should provide a certificate of registration and copy of bylaws to its members. Buyers should also check if the seller has paid the transfer fee, entry fee, and all other liabilities of the society. The seller should submit the transfer form to the society’s secretary, and the managing committee or general body should not refuse an application for transfer except on legal grounds.
Buyers should also be aware of the rules and regulations regarding parking space and parking lots. It is important to get the ownership title of the house transferred to the buyer’s name at the first annual general meeting of the building society held after the purchase.
In summary, while buying plots from cooperative societies may offer lower prices, it is crucial to be aware of the risks involved. A property with clear documentation and title commands a higher price in the market compared to one with a title defect. Buyers should consult a property lawyer to undertake proper investigation and ensure that they are dealing with the right seller.
Even though after finding these risks, you still want to go ahead with buying plots from these societies, please check these things before purchasing:
Verify the Genuineness of the Society
The first thing that you need to do is to verify the genuineness of the housing society. A housing society provides a certificate for the registration of the society and the bylaws of the society to all its members. To verify the genuineness of the housing society, you should check the certificate of registration and a copy of the bylaws of the society.
Check the Title of the Property
A property with clear documentation and title commands a higher price in the market compared to one with a title defect. Ensure that you are dealing with the right seller and that the seller has discharged all his liabilities. Following is a checklist that helps you to buy a flat or property from a cooperative housing society.
Obtain the Documents from the Housing Society
You should obtain the following documents from the housing society before making a purchase:
• Society registration certificate
• Society bylaws
• Share certificate of the society
• No Objection Certificate (NOC) from the society
• The latest maintenance bill of the property
• Letter of allotment
• Possession letter
• Sale agreement
• Conveyance deed
Check the Transfer Fees and Liabilities
A housing society allows its members to sell or transfer the shares and interest in the capital or property of a society only if the seller pays the prescribed fee and discharges the liabilities of the society. Ensure that the seller has paid the transfer fee, your entry fee or membership fee, and discharged all his liabilities.
Verify the Transfer Process
A member wanting to transfer his shares and interest in the capital or property of a society should give 15 days’ notice of his intention to do so to the secretary of the society in the prescribed form. Ensure the seller has submitted the transfer form to the secretary of the society. The managing committee or the general body will not refuse an application for admission to membership or transfer of shares and interest in the capital or property of a society except on the grounds of non-compliance of the provisions of the Act, the rules, and bye-laws of the society or any other law or order issued by the government.
Check for Parking Space
Check with the seller of the apartment if his parking slot will be made available to you. Get to know about the rules about parking space and parking lots.
Transfer of Ownership Title
Be prompt in getting the ownership title of the house transferred to your name at the first annual general meeting of the building society held after you buy your house.
Consult a Property Lawyer
Consult a property lawyer, especially where the sale is through a power of attorney. A good lawyer will undertake proper investigation and ensure that all documents are in order. They will also help you understand the legal implications of the documents.
Conclusion
In conclusion, buying a property from a housing society requires careful consideration of several factors. It is important to verify the genuineness of the society and the transfer process, check for the transfer fees and liabilities, and obtain all necessary documents from the society. You should also consult a property lawyer to ensure that everything is in order and to avoid any potential problems in the future.
Vishuddh Group is a trustworthy real estate developer that has all the legal documents in place for its plots near Nandi Hills. While the prices may be slightly higher than those offered by other societies, investing in a villa in Vishuddh Group’s society is one of the best investment decisions you can make. The company is offering assured rentals of 6-7% per annum, which, combined with land and rental appreciation, will yield significant returns in the years to come. With Vishuddh Group, you can rest assured that your investment is safe and will provide handsome returns in the future.