1) NBFC would issue NOC for sale of the property
2) out of the sale proceeds X amount would be paid by the builder to NBFC
3) contact a local lawyer . check whether builder title is clear and marketable then only purchase the flat
Sorry, this lawyer can't accept your request, but you can request consultation with another lawyer
Registration process of mortgaged property
Dear Sir, I am planning to buy a property in 6th and 7th floor of a 7 storeyed building. The builder has mortgaged all 7 apartments to a NBFC and mortgaged. He is telling that the registration will take place by obtaining the NOC from the NBFC where we can go and register the property. Is that the correct way. If in case the NBFC gives NOC will that be enough. Iam skeptical about this process as this is my dream home.
Asked 8 years ago in Property Law
Religion: Hindu
16 Answers
Hi, NOC from the NBFC is sufficient to register your property and this is the correct procedure too,
NOC from the NBFC will be sufficient for you to get the registration done.
The mortgage has to be cleared before the execution of the sale deed/registry in your favour by the builder. If the mortgage is in existence then the sale deed cannot be executed except with the consent of the mortgagee. Thus, if the NOC is given by the NBFC that is sufficient and you may go ahead with your dealing.
14 th March 2017 Vijay Shanthi Builders Limited 20/43 Kasthuri Rangan Road, Near Russian Cultural Center, Alwarpet Chennai-600 018 Dear Sir, Re: Consent for release of mortgage over Plot No. 111-B of Fortune Square Project located at Ratnamangalam of Vijay Shanthi Builders Limited (“The Company”), mortgaged to JM Financial Credit Solutions Limited in pursuance of the Indenture of Mortgage executed on 30 th June 2016. You have informed us that you have agreed to sell / license / lease the captioned unit(s) (hereinafter the "Unit(s)") to the persons listed as per the annexure hereto (for the sake of convenience referred to as the “Purchasers") and for that purpose, you have requested us to release our mortgage right on the said Unit(s) to enable sale / license / lease of the Unit(s) to the Purchasers. We state that consent is hereby accorded and the mortgage right over the Unit(s) is hereby released, and that we shall have no claim, right title or interest in respect of the Unit(s) whatsoever subject to the following conditions: 1. This consent hereby granted is restricted to release of mortgage over the Unit(s) described above of the project “Fortune Square Project’’, in order to enable sale / license / lease of the Unit(s) to the Purchaser, as mentioned under the annexure hereto. Notwithstanding anything contained hereinabove, the consent hereby granted shall not be deemed to release the mortgage for any other unit(s) in the said project. 2. You have informed us that, as required by us, the Agreement for Sale executed by you with the Purchasers contains / shall contain a provision requiring the Purchasers to pay the consideration for purchase of Units directly into the Escrow Account No. [deleted] opened by the Company with HDFC Bank. The consent hereby granted is therefore subject to the Purchasers (as per the annexure hereto) depositing all the sale proceeds payable to the Company as consideration for purchase of the Units into the Escrow Account No. [deleted] opened by the Company with HDFC Bank. In case of default by the Purchaser in depositing the sale proceeds in the said Escrow Account, we shall not be bound by the consent given hereby and shall retain all rights and claims over the property mortgaged to us. 3. In the event the sale / license / lease to the Purchasers is cancelled for any reason, the consent above accorded shall stand revoked forthwith and you shall have to apply for a fresh consent in relation to sale / license / lease of the said Unit(s) to any other person. Dear Sir, The above is the sample NOC given by the NBFC to the earlier customer. This similar one will be given to me is what the builder is saying. Do you think this is ok. Pls advise. Thanks Karthik
Asked 8 years ago
This is alright
it is ok .NOC has been granted subject to the sale proceeds have to be deposited in escrow account
2) in case you fail to deposit sale proceeds in escrow account consent would be with drawn
Hi, you can go ahead with the above NOC. There is no issue at all.
This seems to be ok.
Dear Sir, Dear Sir, Can the NOC from NBFC be registered or is there any way it can become a legally binded document. Currently NOC is not the legal document rather given in a letter head of the company who has landed money. Is that a valid document tomorrow. Will there be no claim from NBFC tomorrow after registration. Though we will comply all the requirements by paying money into their escrow account, can NBFC claim ??? Thanks Karthik
Asked 8 years ago
Letter from company on its letter head is Binding upon the company
2) if you comply with the terms and conditions and make payment to escrow account then NBFC cannot resile from its commitment to release property from mortgage
Hi, There is no need for registration.
Basically, this NOC which the NBFC is issuing is not to you but to the Developer/Builder. There is no requirement under law for the same to be registered. As long as you are complying with requirement laid down in the NOC, there is no issue. The consent for release of mortgage as against the concerned flat unit is granted to the Builder and not to you, It is sufficient if this NOC is on the letter head of the NBFC. You ask your Builder to handover a copy of this NOC to you and you may retain it for future. I see no trouble and you go ahead with the transaction. Best Luck!
Yes, you need to obtain NOC from the NBFC for getting registered in your name since the builder has mortgaged the property with the said NBFC.
This is a routine procedure, in case you hav any doubt about this you can take a legal opinion from a local lawyer before proceeding with the purchase.
The above is the sample NOC given by the NBFC to the earlier customer. This similar one will be given to me is what the builder is saying. Do you think this is ok. Pls advise.
As mentioned and expressed earlier, the NOC by the NBFC has to be obtained for registering the property in your name.
The format what you have produced is the standard format hence if you still have any doubt in it you may consult a local advocate and get his opinion before3 planning to purchase the property.
Can the NOC from NBFC be registered or is there any way it can become a legally binded document. Currently NOC is not the legal document rather given in a letter head of the company who has landed money. Is that a valid document tomorrow. Will there be no claim from NBFC tomorrow after registration. Though we will comply all the requirements by paying money into their escrow account, can NBFC claim ???
This is a standard format for expressing NOC by the non banking finance company.
Moreover they have given it in their letter head hence they cannot disclaim their own letter.
For further more authenticity, you may enquire about this from any neighbor who had purchased the property in the same complex.
It is always advisable to obtain a legal opinion from a lawyer while buying a property because the investment is very huge hence you should not take risk on this.
Dear Sirs, Thanks for the valuable answers. Now this NOC from NBFC is ok and the particular apartment is released and we will go ahead and register the property. But the builder has mortgaged totally 7 apartments and out of which 2 gets released and we are buying the same. In this scenario all 7 apartments has been mortgaged and the mortgage deed has been registered. Is there any way we can partly release the mortgage for those 2 apartments alone which we are buying. is it possible to release the 2 units separately from the registered mortgage deed between the builder and the NBFC?? Pls advise Thanks Karthik
Asked 8 years ago
the 2 apartments you are buying is being released from mortgage on payment made by you directly to the escrow account
Have you seen the mortgage deed yourself?
If there is a separate mortgage deed for individual flats then ask the builder to redeem the same before registration.
If it is common for all then this NOC will be sufficient
You can take advice and opinion from your local Advocate also.