• Buying a mortgaged under construction property

I am buying a mortgaged under-construction property. The seller has signed a sale of agreement with the builder and wants to sell the property. The seller has an outstanding loan with a bank. Now, I want to take a home loan in order to buy the property from the same bank.

Seller has told me to give total down payment directly to the bank and the bank will settle his dues at the time of registration. He wants 1 percent as part of sale agreement between the seller and me.

Is this is the correct way of doing, that I should give the amount to the bank instead of the seller. Also, the seller has some amount pending with the builder which he will settle himself before sale of agreement.
Asked 4 years ago in Property Law
Religion: Hindu

First answer received in 30 minutes.

Lawyers are available now to answer your questions.

21 Answers

Under the given situation it is advisable that you enter into a tripartite agreement.

In the said agreement all such conditions may be reduced to writing and consent given by all the parties to the agreement which would be legally maintainable.

Before that you may obtain a legal opinion towards this arrangement also

T Kalaiselvan
Advocate, Vellore
84722 Answers
2172 Consultations

5.0 on 5.0

1) ideally tripartite agreement should be entered into between builder seller and you 

 

2) builder has to give his NOC for sale of property to you 

 

3) no dues certificate is necessary from builder 

 

4) your loan would be sanctioned by bank 

 

5) existing loan of seller  can be transferred in your name 

Ajay Sethi
Advocate, Mumbai
94523 Answers
7486 Consultations

5.0 on 5.0

See it is correct procedure you may deposit the advance amount in his loan amount and bank can give NOC for sale and release based on same you can register the property. 

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

You need to get into tripartite agreement with both and complete the transaction. 

Prashant Nayak
Advocate, Mumbai
31807 Answers
176 Consultations

4.1 on 5.0

1. A tripartite agreement should be made into between builder, seller and you as the sale deed has not been executed in favour of seller yet.

2. Bank would sanction the loan thereafter and the existing loan of seller can also be transferred.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

1. FIRSTLY get Bank NOC for transfer of pending Loan amount to you, based on a Registered "Agreement to Sale", which MUST record the terms & conditions of other payable amounts.

2. Once the Bank accepts your proposal, THEN go ahead.

3. The Final "Sale Deed" must be signed by Seller & Builder & yourself, as "Confirming & Consenting Parties". Herein the Builder will also be bounded for his remaining payment from the Seller.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

Ans:

this is an arrangement between the Seller and the Bank. As long as the consideration you are paying is all written on a paper binding all the parties involved it is all fine. 

Please have a title search done for this property as it is mortgaged and it is subject to future litigation. 

Garima Anil Mehrotra
Advocate, Mumbai
514 Answers
1 Consultation

4.9 on 5.0

Tripartite agreement will execute with seller and bank. Bank will agree to accept the deal, sale deed will register with you and bank will agree to hand over all the originals docuemtns to you on payment of loan amount.

Another agreement with execute with seller and seller will trasfer all his right under the agreement with builder to you and builder will bind himself to you to complete construction.

Yogendra Singh Rajawat
Advocate, Jaipur
22596 Answers
31 Consultations

4.4 on 5.0

Dear Sir, since you are paying amount directly into the bank account of the seller as such the transaction is safe. However, see that sale deed is executed and signed by both builder and seller. 

Kishan Dutt Kalaskar
Advocate, Bangalore
6135 Answers
483 Consultations

4.8 on 5.0

Hi 

First and foremost, the seller should obtain a No Objection Certificate from both his bank and the builder as the seller amount outstanding against both of them. 

Since you wish to obtain a home loan from the same bank, the procedure is as follows:

1) First you need to obtain your loan sanction and fulfill conditions for loan disbursement.

2) The bank should issue a No objection to seller to enter in to sale deed with you.

3)Seller has to settle all the amount outstanding with the builder and builder also has to issue a No Objection certificate.

4) Based on No Objection Certificate issued by the bank, Seller to execute a registered sale deed in your favour.

5) Based on registered sale deed, you should execute a memorandum of deposit of title deeds to your bank

6) Your bank as a lender will create a new loan account in your name. 

7) Then thereafter the money will be transferred internally from your loan account to seller loan account.

8) Based on registered sale deed, you should execute a memorandum of deposit of title deeds to your bank

 

The 1% solicited by the seller is probably the profit he is making in the whole transaction. You are the best judge to decide on this 

Hope this information is useful.

Rajgopalan Sripathi
Advocate, Hyderabad
2173 Answers
394 Consultations

5.0 on 5.0

Ask seller to obtain NOC from builder for sale of flat, original agreement for sale entered with builder by the seller. 

In order to regularise this you will need to enter into a tripartite agreement between you+owner+developer/builder

Mohammed Mujeeb
Advocate, Hyderabad
19299 Answers
32 Consultations

4.7 on 5.0

1. First of all make sure that the lending Bank of the developer has given written consent to buy the mortgaged property which is under construction.

 

2. Thereafter, inform the seller that you shall pay the entire sales proceed to the account of the Bank from where he has taken loan including the said 1 percent. He can withdraw the same from his said bank account.

 

3. All the payments should be made while registering the sale deed only.

Krishna Kishore Ganguly
Advocate, Kolkata
27191 Answers
726 Consultations

5.0 on 5.0

1. Yes it is a correct procedure to follow for purchase of mortgaged land.

2. And also ask seller to provide NOC from the bank for sale of property so that bank doesn't object for sale at later stage.

 

Mohit Kapoor
Advocate, Rohtak
10687 Answers
7 Consultations

5.0 on 5.0

Yes it has to be registered

Prashant Nayak
Advocate, Mumbai
31807 Answers
176 Consultations

4.1 on 5.0

It is necessary to register the tripartite agreement at the sub registrar office to confer clear and marketable title to property 

Ajay Sethi
Advocate, Mumbai
94523 Answers
7486 Consultations

5.0 on 5.0

Yes the same needs to be registered before the sub-registrar office.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

1. Every agreement for "immovable properties" must compulsorily be registered with the Sub-Registrar, for it to become legally enforceable for any futuristic disputes.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

Tripartite agreement is an agreement between three parties- The Buyer, The Seller and the Developer. The Tripartite agreement lists the obligations of all the three parties involved and it should be duly stamped and registered.

Mohammed Mujeeb
Advocate, Hyderabad
19299 Answers
32 Consultations

4.7 on 5.0

It may not be mandatory to register the tripartite agreement.

T Kalaiselvan
Advocate, Vellore
84722 Answers
2172 Consultations

5.0 on 5.0

No need. Notary is fine but execute on stamp paper.

Yogendra Singh Rajawat
Advocate, Jaipur
22596 Answers
31 Consultations

4.4 on 5.0

1. Ordinarily, lending Banks of the Developers issue NOC to the buyers of the flat on condition that the sale proceed shall have to be remitted or paid to the loan account standing in the name of the Developerv with the said bank.

 

2. Some times, the lending Bank refuses to issue NOC and ask for registering a Tripartite Agreement mentioning therein that the Buyer will remit/deposit the sale proceeds to the loan account of the Developer.

Krishna Kishore Ganguly
Advocate, Kolkata
27191 Answers
726 Consultations

5.0 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer