Yes you are eligible to check bank and builder MOU even if MOU is not shown make separate agreement on stamp paper with builder to pay pre emi to bank till date of possession also take cheques for security builder can refuse after wards.
Tripartite Agreement in subvention scheme Loan
I am under process of buying a property with a very reputed builder under Subvention till possession scheme. I have paid 10% booking amount and done the buyer seller agreement. Now during loan disbursal I am to sign tripartite agreement, which is confusing. In Tripartite agreement, I am asked to sign on paper which says Date of Subvention ends within 7-8 months. and Buyer seller agreement says possession after 20-24 months and it has fair chances of delay. On confronting builder they send me a letter on company letter head that they would pay Pre EMI in my account directly after subvention ends. I don't know how valid this letter is? Secondly I need to check MOU of builder and bank regarding their subvention terms . AM I eligible to check that MOU before signing the tripartite agreement. In a big dilema what to do.
Asked 7 years ago in Civil Law
8 Answers
Hi, recently this has been a legal issue with many of the allottes as builders like Supertech have defaulted on the subventions schemes by not paying the EMI to the allottes ... However, they are getting the relief from RERA , where the developers are being directed to pay the EMI till posession ... It is advisable to get the perticular clause engraved in the BBA instead of the letter head , so that we can seek legal remedy in case the developer defaults in future ..For detailed guidance you can contact me in person .. Thank you
Since you are buying this property, under Subvention till possession scheme, the subvention period of 20-24 months needs to be clearly recorded in the subvention agreement, instead of the 7-8 months that is currently being shown.
You can only request them to share a copy of the concerned MoU to you.
Letter would be binding upon builder
2) you are entitled to check the MOU entered into between builder and bank regarding subventions terms
3) get your tripartite agreement vetted by local lawyer
1. within 7-8 months from which date?
2. from what i understand of a subvention scheme, in such a scheme, the EMI begins only after possession is given to buyer and prior to that the interest on the loan that has been disbursed to builder, is paid by the builder only
3. if above is the case under the scheme, then you need to clarify from builder as to what he means by 'subventions ends within 7-8 months' and if he can give a clarification on his letter head then what is the harm in clarifying the same in the triparty agreement, so that there is no confusion
4. also what if the builder defaults in handover of possession? will he continue to bear the preEMI interest till the time he actually hands over possession to you or will he bear the preEMI only upto the stipulated period of handing over of possession as mentioned in builder-buyer agreement?
5. what if he abandons the project midway?
6. also let the builder directly pay the preEMI to the bank. I have noticed that some builders ask purchaser to bear the preEMI which the builder would later reimburse
7. however the builder does not reimburse and the purchaser consequently defaults in making payment of preEMI interest. Then the bank invokes security given by the purchaser and if his preEMI cheque bounces (due to builder not reimbursing the purchaser), the bank threatens to file cheque bounce case against the puchaser
8. now imagine the scenario, where the builder has defaulted in giving possession or reimbursing you or he abandons the project - you still would be liable to pay the preEMI to the bank as made to be agreed in the triparty agreement. If you default, the bank would file cheque bounce case against you. So it is a double whammy for you - you do not even have the flat and you are made to pay preEMI and on default you would face cheque bounce case. So please very clear with the terms of the triparty agreement
9. as bank and builder are executing triparty agreement with you, you are entitled to check the subvention terms agreed between bank and builder for the sake of transparency and to ensure that both these parties must not collude to saddle entire liability on purchaser
It would be better for you to take proper legal guidelines by showing complete files agreements MOU to an advocate so that you can take a right path to handle your issues. Vague answers will not give you the exact relief .
You can very well verify and confirm the contents of MOU and can even cancel the agreement if the contents are not in your favor.
The subvention scheme will end after 7 to 8 months, thereafter the builder will not pay anything to bank, the liability will fall on you to pay the EMI to the bank.
There is no guarantee that the builder will honor or oblige to pay the EMI even though he agreed to pay after termination of the subvention scheme entered with bank and you in the form of tripartite agreement, the letter head confirmation about the payment is not enforceable in law.
There are many people falling victim to such attractive schemes called subvention and later repent when they are made to pay for the mistake of the builder.
You may better confirm the reputation of this builder before venturing into all such further issues.
If the builder is not trust worthy, you may better opt for regular scheme itself.
1) You can check MOU and completion date of project plus check subvention letter thoroughly.
2) Its better to take advance EMI from builder. Or you can mention in the MOU till handover of possession.
