Mortgage deed shall remain valid.
It is not advisable to buy a property which is not clear from all sort of encumbrances.
Verbal assurance from bank in this regard is not enough.
Strongly advise not to buy such property.
Buying flat in SBI auction (Equitable mortgaged to SBI)
Respected Sir / Madam, I am planning to buy a property which is going to be auctioned by SBI on 17/07/2019 (already 10% EMD paid by me for this) The issue is; Just now I came to know that the property which is being auctioned by SBI, also a mortgaged to third private party by borrower, and this mortgage was registered and document is visible in EC. I will explain the series of events below for better understanding and providing your valuable suggestions; 1. Borrower (A) took loan by providing original titles to the SBI (B) 2. Somehow borrower (A) defaulted and SBI (Party B) issued demand notice to borrower on 05/11/2018 3. Dated: 12/11/2018 (This transaction is my Point of concern) Here Borrower again mortgaged the subjected property to party C (private person) by registration. In the registration document borrower clearly specified there is no loans are present on the property other than the Bank loan. Also he clearly specified that this registration is being performed based on photocopy property documents as the original property documents are under the custody of SBI due to mortgage 4. 15/11/2018: Demand notice is published by banks in Local news papers on 5. 14/02/2019: Bank took physical possession of the property by giving final possession notice on 14/02/2019 – also cautioned public not to deal with this property, dealing will attracts the charges by SBI. Now if I buy property in SBI auction, is there any thread (legally) from party C (to whom again borrower mortgaged by registration for the private loan money) First of all is SBI is eligible to conduct auction when there is another mortgage in-between dates of process. Can I go ahead with the property or should I drop. Bank representative assuring over phone, bank is going to register the property to you hence third party (C) cannot hold any charges on the property. So it is risk free. (this property registration is being done between bank and auction winner, hence whatever the mortgage registration borrower performed to party C, cannot be charged on auction winner, also bank representative is assuring, bank will take care all risks. Can I believe this? Kindly advice me, your advice will save me a lot...
Asked 6 years ago in Property Law
Religion: Hindu
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9 Answers
The bank has the physical possession of the property and is conducting an auction and it will sell the property to the highest bidder.
The 2nd party was defrauded by the person and he himself is guilty to some extent as he did not make an effort to find out whether the property was mortgaged or not.therefore go ahead and purchase the property.
Regards
Best option is not to participate in auction
2) borrower has mortgaged property to third party
3) I it true that when bank sells property in auction and sale certificate is issued by bank third party has no rights on property
4) to avoid legal complications avoid purchasing property
Dear,
My advice to you to not purchase this property, not because bank is fraud.
Because after that you will face so many legal complications.
Ask bank representative to give you written assurance with seal of bank and if any legal complications
arise in future, they bear all the legal expenses and all other expenses.
Bank conduct auction on as in where in basis, once property sold to you, bank will fold it`s hand and you will keep fighting for ownership with C party. Bank only priority is to recover the debt.
Absolute lie, once sold, no will entertain you.
Avoid the deal.
1. Make sure you read the terms and conditions of the auction.
2. Also do a title search of the property.
3. Do that title due diligence of that property.
4. Also know that you will have to be paying TDS.
5. Once you stake a claim or pay token amount then you cannot back out from the offer.
6. You can ask the bank to sign an indemnity bond to hold the bank liable if the owner does file a case in the future.
You need to complete then move to consumer vosm sje
The SBI will not care about the subsequent mortgage or any frauds done by the borrower to cheat the SBI in this regard, it will straightway auction the property, pocket the auction sale consideration amount and will leave the place.
The buyer will have to run between court and home to solve the further legal disputes filed by the subsequent lender and by the time the case is disposed there may not be any guarantee for the buyer to take possession of his property hence he may enter into an agreement or compromise with the subsequent lender and may have to shell heavy amount on this count, which may be another great loss to the buyer.
This it may be a foolishness to buy the property by very well knowing that this property is under litigation and the same cannot be solved by any means at least by another five years.
Even if you sue the bank for not servicing properly post sales, you may not be able to achieve anything because the bank may not respond to it properly and may not not even care about this case.
Thus in my opinion, it is not advisable to pursue the purchase of the property with encumbrances and legal hurdles
You can go ahead with the auction as the second mortgage done by the borrower is null and void because the property already under mortgage with SBI.
The second loan provider cannot create any legal problem to you. The only option he have is file a recovery suit against the borrower.
