1)issue a post date cheque with letter that balance 25 per cent cheque amount would be presented only on receipt of occupation certificate
2)you need registered sale deed in your favour to confer clear and marketable title to property
Builder asking for Post-Dated Cheques
I am purchasing an apartment from a builder. Have already paid 75% of the total sale amount via RTGS from my account. Now they are asking for a post-dated cheque for remaining 25% due amount, dated for any date in March. But this 25% I am anyway paying via home loan, which will get disbursed to builder in 3-4 days time. In spite of telling them this, they are insisting on the PDCs and saying that they will not go ahead with sale deed execution and registration without it, even if they receive the remaining amount from bank. They claim that this is just standard procedure as per their company protocol and that once they receive full amount they will not encash it. Is this actually standard procedure? If full amount is being paid in few days anyway, why do they still need PDCs for sale deed execution and registration? And what guarantee do I have that they wont encash it in March ? Please help. Thank you in advance
Asked 3 months ago in Property Law
Religion: Hindu
10 Answers
Thank you for the reply sir. All the necessary certificates like OC, EC, CC etc have already been issued by the builder. Bank has also completed legal verification of the proeprty and have approved and sanctioned the loan. So is PDC from my side still required to be given ? Should I give it only after obtaining anything in writing from the builder, that they will give it back to me once full amount is received by them?
Asked 3 months ago
if occupation certificate has been issued no harm in giving post dated cheque
builder would encash it at time of giving possession of flat
You can get an assurance from the bank about the date of payment of the balance amount and issue a post dated cheque beyond that date.
Once the payment made by bank is acknowledged by builder, you can demand return of the post dated cheque, if he delays the return, you can immediately notify the bank to stop payment on the cheques when presented for payment.
This will protect your interests.
You can comply with the standard policy being maintained by the builder in this regard.
You make sure that the builder's office gives you an acknowledgment towards the cheque received by them.
You can take considered decision based on the prevailing circumstances on all such issues .
the builder's demand is unreasonable
there is no such 'standard procedure'
it is merely some internal arbitrary procedure of the builder company
and saying that they will register the agreement for sale only on receipt of full sale price is itself illegal because i believe even in your state there will be a requirement that on receipt of 10% of the total sale price the builder has to mandatorily register an agreement for sale with the purchaser. The Central RERA is clear on this.
it appears that the builder wants the PDC not against the balance 25% but for other charges which in case you fail to pay, the builder can enter that amount in the cheque and encash it
this is completely unprofessional and cheap
i suggest that you give this PDC to the builder only under cover of your letter in which you have to state in detail the circumstances under which you are giving this cheque and how it is to be dealt with as represented to you by the builder, so that the builder cannot play any mischief in future
- As per Sub-Section 1 of Section 13 of The Real Estate (Regulation and Development Act,), A builder will have to enter into an agreement to Sell with a home buyer, and then accept the booking amount which should not be more than 10%.
- Hence demanding the said cheque out of the bank loan amount is against the law .
- However, if the builder is ready to give you an undertaking that the said PDC cheque is only for the fulfillment of the procedure of the company , and it will returned immediately after the funding of the loan amount of the said value.
- Further, if you will give that cheque without undertaking , then you may face problem , specially when the builder could not get OC etc from competent authority or delay in handing over the possession, and also enchash that cheque under some different headings.
You can give pdc cheques but you will be liable if the same is bounced by you and they initiated cheque bouncing case against you
Dear client,
Although it's not required by law, post-dated checks, or PDCs, are frequently requested as a security measure by builders in India. But given the approaching home loan disbursement, the builder's insistence on PDCs raises questions. A key requirement for a valid sale is the payment of the entire consideration, as stated in Section 13(1) of the Sale of Goods Act. This seems to be at odds with the builder's need for PDCs, particularly in light of the approaching house loan payout. You might want to think about getting a formal statement from the builder that clearly states that the PDCs will be returned once the bank receives the entire amount as a precaution. You can also consult the Real Estate (Regulation and Development) Act, 2016 (RERA), which safeguards homebuyers' interests and places a strong emphasis on openness. In the event that the builder declines to assist, you may consult the Real Estate Regulatory Authority of the state in question for advice. When it comes to paperwork, written communication should always come first.
Hope this helps you.
Hi, Don't issue the PDC Cheque. When you are ready to pay the balance amount with in 3 to 4 days. They can't do anything and they can't hold the registration. In-spite of the payment of the amount they are not ready to registered the documents then you can lodge a complaint in RERA and other legal forum.
Enter into an agreement executed on 100 rupees stamp paper as to why they are taking the cheques and when they will return or under which circumstances they can utilise the cheques.
