VPC - reforms in urban property governance in Maharashtra

The article discusses the facts related to reforms in urban property governance in Maharashtra through Vertical Property Card (VPC). 

Under the present system, official land records show only the names of the builder or society - not the individual flat owners in government land records. 

Thus, there is no direct recognition in government records. Since land records only capture horizontal ownership, flat owners rely on sale deeds and society records, which do not resolve issues related to title clarity, financing and tracking encumbrances.

VPC will be a form of digital record that will hold the owner's name, carpet area of the house/flat, land share of the owner and details of bank loans, mortgages, etc., essentially making each flat an single individual unit.

Since, these will be in digital forms, they will ensure transparency (due to names being registered in Government records), facilitate easier loans and makes process for redevelopment of property easier. 

OUR VIEWS: 

1. VPC is just creating a land record entry that eases title and makes lending, buying and selling easier by saving people from the fragmented documentation under the Maharashtra Land Record Act.

2. However, it does not resolve the leasehold versus freehold issue, which is more structural. It could also be that, since the idea is at a nascent stage of development, these policy changes are seen going forward. 

3. However, implementing a vertical property card comes with its challenges, as the transition from the current framework would be complex. It would require the overhauling of all current legislation and ensuring VPC's compatibility with RERA, registration and municipal records. MLRC only provides a record of right, not title.

4. Another important legal aspect would be to see the evidentiary value of a VPC before a court of law, compared to a sale deed or mutation document. This is likely to give rise to many disputes, and given how imbalanced land laws are, there are chances of exploitation of loopholes. 

5. On the question of whether VPC is necessary or if this is something that can be achieved by converting properties to freehold, I believe they achieve two different things. VPC will remain evidence of title and ownership. The property could be converted from leasehold to freehold later as well. However, a foreseeable challenge is the implementation of the scheme on the ground and the consolidation of 7/12 records for providing a 3-D identification of units and a unique identity number for each flat. However, the effectiveness of a VPC could be questioned in the case of properties/societies, built on 99-year leases, where a lease fails to renew.

6. There is immense learning that can happen from US, UK, Australian models of freeholding, which also clearly provides the role of society committees (like Indian RWA's) in jointly owning common spaces. 

7. Therefore, while this is a pioneering effort, it requires more robust ground research before implementation to avoid litigation.

____________

Link: https://www.bathiyalegal.com/post/from-flat-ownership-to-land-ownership