Hi Respected Lawyers, I have booked a flat in Bangalore, ecity phase 2. I verified the title deeds from a local lawyer and all are OK. I paid rs 20K for blocking the flat, subsequently after 1week I paid 2 lakhs during the sale/ construction agreement. The agreements were franked but not registered in sub registrar office, but the seal is there and some amount stamp is reflecting. The crucial twist is, this said flat is mortgaged with one of the banks in Bangalore, I believe including my flat the builder has mortgaged around some 100 flats approx in the project. Also the builder issued me the mortgage deed copy which has been registered in sub registrar office. The builder initially gave me a provisional/conditional NOC from the said bank. Later i called up the bank and enquired about the prov NOC, the bank ppl said either builder or me needs to clear the said amount in the prov NOC , post that only they can issue a FINAL NOC stating the loan amount is cleared, and lien is removed. And later builder asked me to pay 10 Lakhs as per slab wise in payment term sheet, i agreed and paid, I have both soft / hard copies of the receipt from builders. My questions, 1). The builder says they will get the final NOC from the bank even without paying the amount in escrow, as there is some adjustments bw builder and Bank. Is this valid? Do i face any issue in the future? But the builder says if I get the final NOC from bank I need not worry. Bank also agrees to issue the final NOC by some adjustments. 2). As it is for whole project my flat is one of them, is it possible to release the EC or lien for my particular flat in sub registrar office? Builder says the discharge will happen once they repay the whole loan amount to the bank. Is that fine? 3). As till date I paid nearly 18 lakhs, though i have valid proofs for payment (Bank statement & receipts frm builders), is there any possibility the builder may cheat me? If so can I claim back my amount? 4). The provisional NOC from the bank has the letterhead but no sign or seal as it is computer generated. Bank ppl said that is the standard format as it is computer generated. Is this OK? Kindly advise me. Thank you everyone.
1) builder has to deposit sale proceeds in escrow account then only bank would issue NOC
2) in case builder cheats you then you are entitled to refund of money paid by you with interest
3) computer generated NOC from bank is fine . You can insist that it bears signature of officer and bank seal
Hello sir , as per RERA (real estate regulatory authority) , the builder has to clear all the loans at the time of giving posession and while executing conveyance deed ..Since you have proper apartment buyer agreement, there is no possibility that the builder can cheat ...For further doubts you can contact me in person..Thank you
1. Purchaser is not concerned with adjustment between builder and bank
2. Builder is obligated to obtain bank noc stating the flat intended to be bought is released and discharged from the bank's charge
3. Bank noc is sufficient. Separate release EC or lien is not needed
4. You can claim refund of money if builder violates rules and regulations under rera
5. Kindly insist for bank stamp and seal on provisional noc
Dear Lawyers, Thank you very much for the prompt replies. Few concerns, - Without paying the loan amount in the escrow ac, how can the builder get the final NOC from bank? Not sure what understanding or adjustments between developer and the bank. Do I face any hassle in the future despite having the final NOC from the bank? -I called the bank guy and he said the process has changed as they will not sign or stamp in the NOC as it is system generated. Yes still I will insist them to get sign, but without sign or seal will the NOC becomes void? - I got this reply frm one lawyer, 'Purchaser is not concerned with adjustment between builder and bank' I cant understand this line, pls explain. -Finally, I would like to ask you all, if I receive the final NOC from the bank , can I go ahead for sale deed? (Even without paying the amount in escrow, if the bank is willing to issue the NOC) I think the final NOC is mandate. I told the builders its up to you and the bank, but I need NOC and it shud clearly mention the amnt is cleared and no dues for the said flat, am I right sir? Shall I proceed with sale deed if i get the NOC or still the lien or EC needs to be removed in sub registrar office? Few questions may be repeated, but I need clarity and 100% satisfaction. Kindly reply, thank you all.
1. As part of financial arrangement between builder and bank, the purchaser is required to deposit the sale price in a designated account to which amounts are credited for purpose of clearing the bank loan
2. So once you make the payment against the bank noc, the purchaser responsibility is complete
3. The builder and bank may be having several adjustments towards the loan account. That is between them. Purchaser has nothing to do with it. So builder has to only procure bank noc and purchaser can then make payment. The purchaser is thus not concerned with any internal adjustment between builder and bank regarding the overall project loan
4. EC lien is not for one flat. Its for the entire project. The lien gets discharged as and when loan gets cleared and project flats are released from bank attachment. So bank noc is sufficient
5. Even if bank may have adopted new procedure, you can always ask bank as to what is the harm in giving its stamp and seal on noc letter
1.No, such statement is not true. You shall have to pay the sale proceeds for your flat to the said escrow account and collect the final NOC from the said lending Bank. If the Bank also says so, take a letter from the Bank to that effect. There might be collusion between the Builder and the Bank officials. No verbal assurance in this regard is acceptable legally.
2. Yes, the Bank shall have to issue final NOC after receiving payment for the loan on pro-rata basis. This is the way the Banks provide loan to the builder after mortgaging all the prospective flats to be built and issues provisional and final NOC after receiving repayment of the loan amounts on pro-rata basis from the sale proceeds after the flats are sold.
3. A cheat can cheat anybody and it can not be predicted whether the builder will attempt to cheat you or not. You shall have to stay secured legally by keeping all discussions on record and making all payments through bank. Any discussions with the bank shall have to be recorded by sending a letter to that effect to the bank.In case the builder cheats you, you shall have to approach the consumer forum for getting back your money with interest, damage and cost.
4. This is strange. Write to the bank manager enclosing the copy of the NOC asking for his confirmation if it has not been issued by him. Mark a copy of the letter to the Regional/Zonal Manager of the said bank also to keep the higher ups in the loop.
1)if bank has issued final NOC it would be binding upon bank .
2) bank cannot recover any money from you after issue of final NOC
3)you can go ahead with sale deed after issue of final NOC from bank
4)you are absolutely correct that NOC should mention that no dues are pending for the said flat
5)ask bank to give in writing that NOC does not require any signature as it is computer generated
Firslty, I don’t get it as when you have consulted the local lawyer then how can he say that the property title is free when there is a mortgage loan against the same property.
Secondly, as if he would have gone to the registrar’s office then he would have got to know about the same the only.
Thirdly, first please let the loan amount be paid as there can’t be any understating between anyone above from the law in property transactions.
Fourthly, if still you do not get the NOC then you may have to go to RERA court of your area to get the money refunded with interests.
1. The builder can not get the final NOC before paying the loan amount to the escrow account. There can not be any lawful understanding with the bank with the bank manager in this regard. After you pay the amount to the builder and he does not deposit with the escrow account of the lending bank, you shall not get the final NOC from the Bank for sure.
2.Even if it is system generated, it is a statement/document issued by the bank which is required to be signed by the authorised person with seal for rendering validity to it. The bank might deny the genuineness of the said computer generated statement as suh statements can be generated from any computer. You are required to be careful now.
3. You being the purchaser of the flat won't have to act based on any out of the record understanding with any employee of the bank and your builder. You should follow the laid down procedure.
4. The NOC should also mention that the bank has no objection if the said flat is sold to you and the sale deed is registered.. The NOC should bear signature and seal of the branch manager.
5. After the NOC is received by you from the lending bank, you can get the sale deed of the flat registered.
Dear Sir,
I try to answer to your concers:
Few concerns,
- Without paying the loan amount in the escrow ac, how can the builder get the final NOC from bank? Not sure what understanding or adjustments between developer and the bank.
Ans: It appears both of them colluded with each other. The conduct of builder is not above suspicion.
Do I face any hassle in the future despite having the final NOC from the bank?
Ans: Definitely at remote point of time you may have face some troubles.
-I called the bank guy and he said the process has changed as they will not sign or stamp in the NOC as it is system generated. Yes still I will insist them to get sign, but without sign or seal will the NOC becomes void?
Ans: yes, when system not generating NOC then how come the builder get the NOC from the bank. It seems there is some fishy.
- I got this reply frm one lawyer, 'Purchaser is not concerned with adjustment between builder and bank' I cant understand this line, pls explain.
Ans: It means you need not bother about the adjustments between builder and the bank.
-Finally, I would like to ask you all, if I receive the final NOC from the bank , can I go ahead for sale deed?
Ans: I never advise it, it is under heavy risk not now but at any future point of time.
(Even without paying the amount in escrow, if the bank is willing to issue the NOC) I think the final NOC is mandate. I told the builders its up to you and the bank, but I need NOC and it shud clearly mention the amnt is cleared and no dues for the said flat, am I right sir?
Ans: Even then you are inviting some risk. Think twice wisely.
Shall I proceed with sale deed if i get the NOC or still the lien or EC needs to be removed in sub registrar office?
Ans: Yes, without getting clearance in EC you should not get registered sale deed.
Dear all, Thank you for the reply. 1) I have direct contact no of the bank officer, so that I can check the authenticity of the NOC from him right? Or I can send email attaching the said NOC and copy the branch manager and check the authentication? If he replies yes, will that be suffice? 2). Builders already collected nearly 16 lakhs from me and I have acknowledgement both soft & hard copies. Hope my money would be safe? If in case I need refund can i get it back from them? In worst case if i go to consumer forum , how many months will it take? 3) Builder says 50% goes to escrow i.e to the bank & 50% amount to RERA. Is that true? Builder is asking me to pay 90% of sale consideration now, so that they can get final NOC from the bank, but I denied giving 90% before the sale deed. After that now the builders are saying , they can get final NOC from bank and deposit in escrow after sale deed. Is this the right procedure? 4). Sir at the end I require NOC from bank right? If it is genuine why to hesitate to go for sale deed? 5). The builder has registered overall 100 flats in the project, mine is one of them, to remove EC or lien from sub registrar office the builder has to close the entire loan amount right sir? So the final NOC must be suffice for registering the sale deed right? And Im not going for home loan, I sold a property in my native and i want to transfer that amount here i.e self funding. 6). Post sale deed what else docs i need to collect frm the builders? Solve my queries. Thank you all.
1) send e-mail to bank manager to check authenticity of NOC
2) cases before consumer forum take 2 years to be disposed of
3) it is your interest to get registered sale deed from builder as soon as possible
4) builder has to close the loan to remove bank lien
5) builder has to obtain OC from muncipal corporation
Dear Sir,
I further attempt to answer your more questions on the subject, as follows:
1) I have direct contact no of the bank officer, so that I can check the authenticity of the NOC from him right? Or I can send email attaching the said NOC and copy the branch manager and check the authentication? If he replies yes, will that be suffice?
Ans: Get bank managers consent in writing. Like sending the Xerox copy of the same by registered post and then ask him to send his reply in writing. Or send the copy of same to his Regional Officer and ask it to enquire and submit to you in writing as to whether it was actually issued by the manager.
2). Builders already collected nearly 16 lakhs from me and I have acknowledgement both soft & hard copies. Hope my money would be safe? If in case I need refund can i get it back from them? In worst case if i go to consumer forum , how many months will it take?
Ans: First you must be nice to the builder to get back the amount and if need arise get any other purchaser who is willing. You can get issue a legal notice and cancel the contract and claim for refund with interest. You may approach the Consumer Forum. Now you also go to the RERA which disposes the matter within 6-12 months where as Consume Forum takes 12 to 24 months.
2) Builder says 50% goes to escrow i.e to the bank & 50% amount to RERA. Is that true? Builder is asking me to pay 90% of sale consideration now, so that they can get final NOC from the bank, but I denied giving 90% before the sale deed. After that now the builders are saying , they can get final NOC from bank and deposit in escrow after sale deed. Is this the right procedure?
Ans: RERA ask for security deposit which is refundable. You will enter into danger zone if you pay 90% of sale consideration. The builder must arrange for deposits to be kept with RERA. It is is his look out. No, he is not on right path and the procedure is misleading.
4). Sir at the end I require NOC from bank right? If it is genuine why to hesitate to go for sale deed?
Ans: NOC cum possession. You will be safe if you enter into the apartment. Possession is nine points in law. Once you entered into possession then you will enter into safer zone.
5). The builder has registered overall 100 flats in the project, mine is one of them, to remove EC or lien from sub registrar office the builder has to close the entire loan amount right sir? So the final NOC must be suffice for registering the sale deed right? And Im not going for home loan, I sold a property in my native and i want to transfer that amount here i.e self funding.
Ans: Yes builder has to pay entire loan amount to get remove entry from EC. Ok. You can go ahead if EC is going to be cleared.
6). Post sale deed what else docs i need to collect frm the builders? Solve my queries.
Ans: You must get sale and EC (after removal of entry)
1. You have to get NOC from bank in writing which is pertinent or else you may face issues when the builder defaults loan repayment even though you paid for the flat.
2. The bank will not give discharge certificate if the entire loan amount is not cleared.
3. You must closely watch the developments as well as the builder's activities including the repayment of loan amount.Since you are paying to the bank directly, in case of cancellation the builder may be reluctant to repay owing to various factors.
4.The bank manager's signature would be more authenticated.
So long the terms between the bank and the builder is going on well, there can be no problem, but once there is an issue for default then only all problems will arise, you may analyse the issues based on the prevailing circumstances.
Purchaser need to follow the due process and should not get involved in the bank and builder collusion
The final NOC will protect your investment interest. Dont worry about the lien or the EC, the NOC from bank will be able to fight against them in case off the default in loan repayment by builder.
1. You insist the builder to procure the NOC and then verify its authenticity from the bank.
2. If you approach consumer forum for refund it may take minimum two years for disposal.
3. The builder may twist and cme down to any extent till you pay the sale consideration, after that he may show his colour. Even the reputed builders adopt such nasty tactics, hence better confirm all the details before making further payments.
4. The NOC from bank is essential or else you will be in trouble when the bank initiates action for possession due to the builder's default in loan repayment.