What to check in a builder floor collaboration agreement

Most independent floors in Delhi and the older parts of Gurugram exist because a plot owner and a builder signed a collaboration agreement. The owner contributed the land; the builder demolished what stood on it, rebuilt, and took some of the floors as payment. Every floor sold afterwards derives from that arrangement.

Which means the collaboration agreement is not background paperwork. It determines who was entitled to sell your floor, what share of the land came with it, and whether anyone else retains a claim over the structure. Ask for it. A seller who cannot produce it is telling you something.

This is the clause that separates a good purchase from an expensive lesson. When you buy a floor, you buy the built structure plus an undivided proportionate share in the land beneath it. That share is what gives you a say in redevelopment, what determines your position if the building is ever demolished and rebuilt, and what a future buyer's advisor will examine first.

• Check that your sale deed conveys a specified undivided share in the land, expressed as a fraction or percentage, not merely 'the second floor'.
• Check that the shares conveyed across all floors add up sensibly, and that the terrace and stilt parking have been allocated rather than left silent.
• Where the deed conveys the floor without any land share, understand that you are buying a structure on land belonging to someone else. That is a materially different asset, and it prices differently.

These are the two most commonly disputed spaces in an independent floor, because they are the two most often sold twice. The top-floor buyer is told the terrace is theirs. The collaboration agreement says the builder retained it. Neither document is shown to the other party.

Get terrace rights and parking allocation stated in your own registered sale deed. A verbal assurance, a WhatsApp message or a line in an unregistered builder-buyer agreement will not settle a dispute with a neighbour five years from now.

Sanctioned plan

The approved building plan for the property, and a comparison against what has actually been built. Extra coverage, an enclosed balcony or an unapproved fourth floor are all common and all your liability once you own it.

Completion or occupancy

Where the local body issues one for this category of building, ask for it. Where it does not, know that in advance rather than being told so after you have paid.

Structural work

Where the building was demolished and rebuilt, ask what the structure was designed for. A plot sanctioned for three floors carrying four is a problem that surfaces at loan sanction and at resale.

Title of the original plot

The chain that made the plot owner the owner: freehold conversion where applicable, and the preceding conveyance. The collaboration agreement is only as good as the title behind it.

This catches more buyers than any other point. Depending on the collaboration agreement, your floor may need to be conveyed by the original plot owner, by the builder under a power of attorney, or by both jointly. If the wrong party executes the deed, or if the power of attorney relied on has been revoked or died with the person who granted it, the instrument may not convey what it appears to.

Ask to see the power of attorney if one is being relied on, check that it is registered where registration is required, and check that the person who granted it is alive at the date of execution. A power of attorney generally terminates on the death of the grantor, and a deed executed after that date under a lapsed power is a serious defect that is far cheaper to catch before payment than after.

This is a general explanation, not advice on your property. Procedure, rates and thresholds differ by state and municipality and change over time. Kabir Real Estates provides advisory and due-diligence assistance and does not issue title certificates or formal legal opinions. Where a matter needs one, we will tell you so.