• Buying property pledged with bank

Hi
I am planning to buy a small area of land for construction of house.The land documents are with a local bank as there is an outstanding loan.
Seller is planning to sell 50% of the total land to us for clearing the loan. He has asked us to pay 8.5 lakhs as advance to be deposited in same bank to clear his dues so that he can release the papers .
We have entered into an initial agreement(unregistered)for token advance paid (Rs.10,000)wherein we have mentioned that 8.5 lacks will be paid as advance to the bank to release the papers .Within the next 2 months we need to do the registration after full n final payment is done.
My question: Should we prepare some registered or unregistered document upon payment of advance money of 8.5 lacks or a receipt would suffice ?Bank will issue a receipt to us if we deposit it directly to the sellers account.Is that sufficient ?
Asked 4 years ago in Property Law
Religion: Hindu

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14 Answers

Dear User

It is always advisable to comply with the applicable provisions of Laws of the Land.

In order to have smooth sailing, you are advised to go for Registered Transaction before concerned Registrar.

It will not only give you upper hand but also it stands the test of laws.

Further more, the Registration charges etc., will be adjusted at the time of final transaction.

Do not ignore Bank, make it a party to the transaction.

Never pay the money to the seller directly, it should & must be routed through Bank only under proper acknowledgement.

Good Luck

S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

5.0 on 5.0

1) enter into registered or un registered agreement for sale as you are paying Rs 8.5 lakhs as advance to seller account in the bank

2) mere receipt is not sufficient

Ajay Sethi
Advocate, Mumbai
87892 Answers
6207 Consultations

5.0 on 5.0

Has the bank been made a party to the sale agreement? A tripartite agreement to sell between seller, buyer and bank ought to have been made in these circumstances. A simple receipt from the bank does not protect your legal interests.

Ashish Davessar
Advocate, Jaipur
30761 Answers
971 Consultations

5.0 on 5.0

Notarial sale agreement will be enough

Subhendu Ghosh
Advocate, Barrackpore
234 Answers

4.0 on 5.0

you have to enter into a registered sale agreement containing the facts of the transaction and the details of purchase etc.

Once the bank loan is cleared and you get the No due certificate as well as discharge certificate and an endorsement by the bank to the registrar to this effect, you can get the registered sale deed executed in your name.

T Kalaiselvan
Advocate, Vellore
78048 Answers
1543 Consultations

5.0 on 5.0

1) Try to create atleast unregistered agreements that you are going to purchase plot and for advace payment yiur paying amount to bank and owners name.

2) No just receipt of bank is not sufficient, its not auction, here by owner's he is selling property. Put all details of bank receipt and additional amount paid to owner.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

Registration of an agreement is always better but you can get the agreement notarized.

The mortgage clearance is the responsibility of the seller and he needs to transfer the clear right of the land.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

1. Property mortgaged with Bank CANNOT be purchased /sold without the Bank NOC.

2. Any document /deed which is not registered, relating to immovable property, shall remain dubious and highly insecure.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

Dear Client,

Unregistered document swill bear high cost in case of default as no legal sanctity.

Get Agreement sale executed and registered.

U can make payment via cheque but bank will release documents to actual owner only.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. Get into sale agreement duly registered.

2. Take blank signed cheques for the advance along with interest.

3. Get into an agreement for taking the cheques in enforcement of the liability for having borrowed 8.5L duly registered.

4. co-ordinate with the bank and get the original documents in your possession.

Rajaganapathy Ganesan
Advocate, Chennai
2085 Answers
8 Consultations

4.9 on 5.0

Hello, I understood your question that you wanted to buy a portion of land but the entire document of the land is under the custody of bank pledged by the actual owner.

Now, the owner wanted to clear of the bank debt so, he is preferring an advance of 8.5 Lakhs from you to clear off his debt in bank to release the documents for that you have paid token of advance.

My suggestion is that you have to enter into valid agreement for sale and same has to be registered. Because, registered sale agreement only will save you legally if any problem arises in future.

Note: Unregistered document hold the legal validity only 11 months so my advice is to you is to opt register your sale agreement.

Sivasubramanian B
Advocate, Chennai
47 Answers
3 Consultations

4.8 on 5.0

Would be more than sufficient just keep few things in mind while going for it.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

It is advisable if you make a agreement to sale for the same and register it.

Prashant Nayak
Advocate, Mumbai
27224 Answers
88 Consultations

4.4 on 5.0

1. You should make a registered document, wherein the same terms shall be written.

2. You can deposite the money to the account of seller, but the bank will not issue any receipt to you.

Also, note that you may enter into a tri partite agreement with bank and seller wherein bank will allow you to clear the loan on behalf of the seller and in furtherance of the same the seller will sell the property to you.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

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