Jagoinvestor

September 16, 2013

What is “Undivided Share in Land” and why it should be in mentioned your agreement ?

You bought your “Dream Home” and you are on top of the world. The joy and pride you have after buying your home is amazing. The property is at great location and the prices are appreciating, and you feel you are the Hero ! . Now you want to sell your flat for some reason and you are more than confident that you will get a buyer and the deal will take just few weeks and you will be bathing in cash from top to down.

undivided share in land india

Prospective buyers have started meeting you and they want to buy the property, but they are all rejecting it. They are “informed investors” who take care of every single detail and they ask you that killer question –

Everything is fine, but where is your undivided share of land (UDS) in agreement?

You are wondering whats going on, quite amazed only to realize later that you were only sold the building which is depreciating each moment, but “LAND” , which is the real thing is not owned by you.

You are SCAMED or FOOLED ! or both ! . Let me introduce to the term “Undivided Share of Land” or UDS as its called generally in real estate world and why you cant ignore this at any cost while purchasing properties.

What is Undivided Share of Land (UDS) ?

I will keep it short and simple. Undivided Share of Land is the share of land owned by you when you purchase the property. Basically when you buy a flat or apartment, you are buying two things

1. The constructed building – where you actually reside
2. The proportionate share on the land, where the whole property is built

The Price Appreciation in real estate actually is the appreciation in land prices, because technically the building will depreciate overtime. Its not that cement and concrete structure which is the prime thing, but the land. Have you ever thought what will happen if there is an Earthquake and the building collapses ? What is in future, the govt wants to acquire the land for some national project and wants to give compensation to you ?

Leave all that, imagine in future your building after many years needs to be redeveloped and a new construction has to happen. At that time, the amount of land you own will matter. Note that incase of co-operative societies, the Undivided Share of Land might be on the name of society and not on the home owner name, because they are share holder in the society, which is fine.

The sum of all the flat owners UDS has to be equal to the property land size. You should also know that the undivided share of land will be proportionate to your property area.

Example 1 – If there is land measuring 1,000 sq and there are 10 flats or equal size is constructed on that land, then each owner will have 10% of the land as his/her share.

Example 2 – Lets say there is a big township where 100 units of 2 BHK flats of 1,000 sqft and 50 units of 3 BHK measuring 1,500 sqft . Then the total constructed area is (100 units * 1000 sqft) + (50 * 2000 sqft) = 2,00,000 sqft . Anyone who owns a 1,000 sqft flat will have 0.5% share in the total land (Because 1000 is 0.5% of 2,00,000) and anyone who owns a 2,000 sqft flat (3 bhk) will have 1% UDS .

There has been cases where the builder has allocated less undivided share to flat owners and kept some part of himself and the original land owner (a lot of times, builder buy the land from someone else). Here is one such example

Current apartment which I am staying is 10 years old apartment. Building having total 24 flats. Whereas builder made total 26 undivided share. Other than 24 flat owners one share for builder and one share for Land owner. In the share of builder and Land owner they constructed few shops in building cellar. SOURCE

Important Point – The above example is for apartment system . If its a co-operative society, then the land share is equal for each member, irrespective of their property size.

What to check in Agreement ?

When you buy the property, your builder will give you a date when you have to come to registration office and all the agreement work will be done. Most of the times, builders are reluctant to show you the agreement copy. But they will be ready to share someone else agreement copy at their office or at the main site.

Just have a look at that agreement which is like a specimen or the format, on some of the page, you will see “Details of Undivided Share of Land” and it will be mentioned in percentage terms like “0.45%” or exact area in sqft terms. Just read the whole thing carefully.

Then when the actual agreement has to take place, you can then read the agreement in detail and make sure you look after this point in your agreement copy. A small tip here is that when builder calls you for registration, tell him you would like to come before 1 hour from the scheduled time and have a detailed look at the agreement, if possible also get a lawyer with you and have him look at the agreement.

So did you check your agreement copy and see how much Undivided share of land you own ?

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geetha
geetha
7 years ago

Sir,
Recently we purchased a property which is a joint venture. The land owner is a single person and the builder is proprietary concern. Jv is not registered. In jv the owner and builder has 50 – 50 share. He has alloted 3 flats to owner one in ground floor, and 2 in second floor. The 1st floor consists 3 flats which builder share he sold to different buyers. As per plan aproval there is a pocket terrance in second floor. In that open terrace the builder constructs one additional room to owner which not mentioned in approval. In jv they said that the open terrace in 2nd floor has right to be enjoyed by all flat owners but it was overwriten as enjoyed only by land owner. The owner also sold one flat in second floor. Now he has only 2 shares. My questions are the deviation of plan approval ie., additional construction is valid. The unregistered joint venture is a valid document in court of law. They mentioned in jv as the right of enjoyment is solely to land owner is valid. If it is valid the owner has to construct any building in future. If he sells that second floor property to other person the right of open terrace in that floor is also transferred.

vikrant
vikrant
7 years ago

Hi Manish,

My question is related to the area which is to be used for calculating the UDS. Now when the builder get’s the society approved, for calculating FAR for construction, he uses the whole land which includes open park area, Parking area and other common areas outside the building, but when he transfers UDS to the buyer, only uses the area on which that particular building is constructed. As per regulations is this a fair way of transferring UDS to the the flat buyers.
Thanks.

afreen
7 years ago

We have given our land for development to construct a shopping mall (G floor+1floor) so now I want to know that who will get the ownership of terrace

Anwar
Anwar
7 years ago

I have bought a commercial property with UDS. I am paying municipal tax what about land tax. I am paying for my home land and building tax. For UDS there is no land tax to be paid? Or is there any documents related to it must be completed from builders….?

rukmani
rukmani
7 years ago

We have uds equal 5 flat owners. but the carpet area differs, that is 1 owners have 1400 sq.ft, 2owners have 1000sqft, one owner 850 sq.ft. and 1 owner have 600 sqft. now if we demolish and construct again what would be the carpet area for all of us according to rules in chennai. total land area is 3800 sqft. 30 yrs old building.

srinivasan
srinivasan
7 years ago

My wife’s grand father bought a land about 4.5 Ground in 1958. He has 3 sons & 5 daughters. my mother-in law was one of the daughter. she died in 1997 and grand father was died in 2000. In 2005, they made a partition without my wife and her sister’s knowledge. in that they had gave Rs.10,000/- to each daughter’s and mother and the land was partitioned by sons. they had not given any money or land to my wife and her sister’s. In that partition, they had mentioned total family property value is Rs.10,00,000/- and divided property value is Rs.6,00,000/- Here balance Rs.4,00,000/- is in undivided. Undivided part of land is Schedule 1. and divided part is schedule 2, 3, & 4.

What is my Wife and her sister’s share in this property.

kc
kc
7 years ago

we have uds equal 5 flat owners. but the carpet area differs, that is 1 owners have 1400sq.ft, 2 owners have 1000 sqft, 1 owner 850 and 1 owners have 600 sqft. now if we demolish and construct again what would be the carpet area for all of us according to rules in chennai. total land area is 3600 sqft. 30 yrs old building.

ram
ram
7 years ago

hello sir ,
we own a flat of area 280carpet +120open terrace attached with our flat. but the terrace is not included in fsi and in the agreement of builder it is mentioned as 1rk with uds so what does it means ??? wether the terrace which is not in fsi is our property or not ???

ram
ram
Reply to  ram
7 years ago

and sir there are total 80shares which are divided into 16 flats each flat owner has 5 shares of rs 50 each so when we go in redevlopment can we ask for equal area from the builder which he will giving to the rest of the members???

Sudhi
Sudhi
7 years ago

I have a doubt like Total land area is 2396 sq.ft and there are 6 apartment as per the plan and builder sold 2368 sq.ft as UDS to the 6 apartment owners and 28 sq.ft remaining and there is a small single BHK house in Ground floor which is not in the actual plan, whether he can sell that with the 28 sq.ft UDS?

Mannav
Mannav
7 years ago

Hi , I wanted to inquire, if builder is stating the UDS in the sale deed is it okay can be rely on the same.
Or its better to go for legal verification before registration.

Mohan
Mohan
7 years ago

Hi Manish

I have a query i am hoping you can help with. In the absence of anything specified in the sale deed / ownership document, is there a law or a notification which clarifies the point you have made i.e. the land share will be proportionate to the number of floors / built up area which is under ownership?

Thanks

Mohan

pundalik
pundalik
8 years ago

hi. Hope you will help me out.
My friend was residing in a society (just houses, not an apartment). the land was owned by the society. the land was under gram panchayat and N/A. Society went into an agreement with a builder that he will construct flats and give them to society and society will allot the flats to members (in 1994). Same was followed and in 1996 builder handed over the construction.
society allotted the flats to society members (having share certificate of society). now does each member of society needs a sale deed for their flat?? was the stamp duty & registration applicable to each flat.

krithiga
krithiga
8 years ago

we have uds equal 9 flat owners. but the carpet area differs, that is 3 owners have 850sq.ft, 3owners have 550sqft and 3 owners have 400 sqft. now if we demolish and construct again what would be the carpet area for all of us according to rules in chennai. total land area is 3600 sqft. 35 yrs old building.

Padmaja
Padmaja
8 years ago

Sir,

They have given in document as flat measuring 68 sq.m(plinth area of Flat) and plot area 77.27 sq.m.Can you please explain me how much UDS we get? Plot area means UDS here? Expecting your reply.

suprabha
suprabha
8 years ago

hi manishji,

we have selected a plot area 1050sqft (30*35) but usd is 550sqft which comes 1600sqft. 1600 sq ft will be registere in our name but thinking will 800 in ground level and 807 in first floor will be a smaller house. earlier we taught 1600sqft but later builder clearly said plot area 1050 sqft and usd around our plot comes 550 sqft. will 3 bhkk house comes very small. its burden land yet for that model villa it fetches huge 8 months with roads.

Vicky
Vicky
8 years ago

Hi Manish,
I am now a regular reader of Jagoinvestor and it has definitely made me much more aware and helps me in taking wise financial decision.

Regarding this post, I have a query. I booked a flat back in April 2012 and still awaiting for possession letter(otherwise flat is almost ready). But after reading this post, I realized that there is no mention of UDS in our Agreement to Sale and this has worried me.

Can you please advise what can be done for our right of UDS? Its a special township project so huge no of flats so not much idea of how is calculation of UDS done here. Please assist.

Bharathiraja
Bharathiraja
8 years ago

Sir,

I am buying a flat from the land owner. The joint development agreement between the builder and land owners is registered but the sharing agreement between the parties is not registered. It is just done on a Rs. 200 stamp paper before notary. Because of this, my lawyer insists that the directors of builder company or a registered GPA be brought in as consulting witness for both agreement and sale deed. The land owner says the directors have authorized an official from their side to be part of all sale deeds as one of the parties, in a board resolution and the directors need not sign any agreement as this is a private limited company. My lawyer suggests me to drop the deal in that case. What do I do now? Your advice will be of great help. Thanks in advance.

Regards,
Bharathiraja R

Sudha
Sudha
8 years ago

Hi Manish,

Thanks for sharing very useful information. Is it a common practice for the builders to give UDS for the villa buyers as well? One of the builder I was talking to mentioned that they can only provide UDS equal to our villa land (about 3500 Sq Ft) out of the total land owned in that township (about 50 acres in total which includes apartments and villas). Should we insist in getting the specific portion of the land where the villa is built to be registered in our name?

Thanks
Suresh

Suresh
Suresh
Reply to  Jagoinvestor
8 years ago

Thanks Manish. Builder said it can’t be modified. What is the downside of buying villas with UDS?

sagar
sagar
8 years ago

Mr.Manish.

what is the ratio between the undivided share of a land and saleable area

Wriju
Wriju
8 years ago

Hi Manish, I have a question regarding a flat that I am interested in. The land on which the building is constructed is divided amongst 4 brothers (each have 1/4 undivided share as per development agreement). Now the flat was alloted by the developer to one brother’s legal heirs (wife + daughter, as he had expired recently) as part of a supplementary development agreement.

My question is do the remaning 3 brothers or thier legal heirs have any claim on this flat or its associated undivided share of land?
Also while entering into an agreement how much risk is involved if one of the brothers is not willing to give legal consent?

Thanks and regards
Wriju

Wriju
Wriju
Reply to  Jagoinvestor
8 years ago

Already did Manish, and the remaining parties need to be included either and consenting party or as vendors. For buyers the “vendor” option is better.

Wriju
Wriju
Reply to  Jagoinvestor
8 years ago

I consulted a lawyer and a judge for this and found the following:

a. In this particular case ALL parties who are owners of the UDS of land need to be included (confirmed by bank and property lawyer) in the initial agreement and the Conveyance Deed.

b. Now I also confirmed from the judge a very sensitive point (which I am not disclosing on a public forum like this). If you want complete details send me a mail to [email protected]. But the judge explained to me that if the seller/vendor/owner of the land belongs to a particular religion (this is where it becomes very sensitive) then an additional step is required. First a court order needs to be taken and a notice needs to be posted inquiring whether there are any known relatives of the seller/vendor/land owner who have claim over the property. Once posted the buyer needs to wait for two months before another notice (with court order is posted) confirming that there are no known relatives.

Else such relatives are entitled to claim share of the property (from the buyer) and share of sale proceeds (from seller) even after final sale and conveyance deed.

I know its confusing but I can only share so much without causing an uproar, hope you understand.