Section 7-A Haryana Amendment: Exchange Deed and Transfer Deed Misuse for Small Plots
Recent amendment aims to prevent misuse of exchange deeds and transfer deeds to bypass NOC requirement for small plot transactions in notified urban areas of Haryana.
What is Section 7-A restriction?
Section 7-A of the Haryana Development and Regulation of Urban Areas Act, 1975 restricts registration of sale, gift or lease of small land parcels in notified urban areas without obtaining No Objection Certificate (NOC) from DTCP.
The objective of the provision is to prevent unauthorised colonisation and fragmentation of land in urban areas.
What issue was noticed by authorities?
Authorities observed that instead of executing sale deeds, parties were executing exchange deeds or transfer deeds in order to avoid NOC requirement under Section 7-A.
Through such structuring, small plots were effectively being transferred while technically avoiding classification as sale.
How exchange deed was being used?
- Two parties exchange land parcels instead of executing sale deed
- Transaction structured in a way that resembles sale in substance
- NOC requirement attempted to be bypassed
- Small plot restrictions avoided indirectly
Impact on property transactions in Haryana
Buyers and sellers should be cautious where small plot transactions are structured through exchange deed or transfer deed without examining whether Section 7-A implications arise.
Documentation structure alone may not always determine legal compliance. Nature and intent of transaction may also be relevant.
Practical situations where issue may arise
- Transfer of small residential plots in urban colonies
- Exchange transactions involving unequal property value
- Transfer of plotted developments in notified areas
- Attempted sale shown as exchange
- Documentation structured to avoid approval requirement
Due diligence before executing exchange deed or transfer deed
- Check whether plot falls in notified urban area
- Check size of plot
- Check whether DTCP permission required
- Examine whether transaction substance resembles sale
- Verify compliance before drafting document
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