Signature of builder is necessary as it is responsibility of builder to complete pending construction 

bank will not disburse loan amount unless builder is party to agreement 

don’t purchase the flat of builder refuses to sign 

- As per banking rule , in such cases the 4-part agreement is mandatory , and in the absence of the same the bank can refuse to sanctioned the loan amount. 

- Further, the builder or the said landowner cannot refuse to enter into that agreement 

- Further, if you have paid the amount then you can claim refund with the compensation from them after filing a complaint before the consumer forum. 

- Issue a legal notice before filing the complaint. 

Though flat belongs to share of landowner, he is in collusion with builder. Together they want to dupe you otherwise there is no reason for refusal by builder to sign the  agreement. The deal appears to be risky given the  connivance of landowner with builder. You have two options, to seek refund and to seek performance of agreement by order of Court. Best option is to approach civil Court in Hyderabad or Secunderabad depending on the  location of property filing a suit for specific performance of agreement against landowner and builder. You can obtain stay of any transaction on the flat which will prevent any further transaction blocking the investment by landowner and builder forcing them to come to your terms.

The bank is right that the builder is typically required to sign a tripartite or quadripartite agreement when a purchaser seeks a home loan for an under-construction property. 

This agreement involves the buyer, the builder, and the bank, and sometimes the land owner as well, forming a quadripartite agreement. 

This agreement ensures that all parties are aware of the loan arrangement and their respective obligations. 

It clarifies the builder's obligations to the bank and the buyer, especially regarding project completion and entrega of the property. 

It assures the buyer that the builder is aware of the loan and its terms, and that the property will be delivered as agreed

The agreement details how the loan amount will be disbursed to the builder. 

It outlines the builder's responsibility to deliver the completed property to the buyer. 

 It may include an undertaking from the builder to register the project under RERA (Real Estate Regulatory Authority) and forward the details to the bank. 

If the builder and the land owner are refusing to cooperate then you can issue a legal notice to both demanding their signature in the quadripartite agreement and failing to do so you can inform them that the sale agreement stands cancelled and they are required to return the advance amount with interest from the date of receipt or to face legal consequences. 

He has to sign. If he is not signing you can approach court for your rights 

Dear Sir,

It is suggested not to proceed with for buying the flat in question without the agreement, other wise there are chances of withholding of money and delaying of work by the builder/landowner. 

Dear Client,

• How to proceed in this situation, where a downpayment amount has already been paid, and the builder refuses to sign the quadripartite agreement required by the bank in order to obtain the home loan?

It is mandatory requirement for the issuance of home loan by the concerned bank that, a quadripartite agreement must be executed by the land owner, builder, borrower and the bank, on the format approved by the bank. The insistence on such an agreement is lucid, considering the need for risk management. In such scenarios, the builder is accountable for the construction and handing over of the building, even if it is bought from the landowner. Ownership is not complete without the obligation of construction.  Thus, the bank seeks accountability from the builder.

Without the builder’s signature on the agreement, the bank won’t be able to issue the loan, and neither can you demand the possession or quality of the building from the builder. Going forward with the purchase without the builder’s signature can put the buyer in great risks, since there have been instances where such buyers never got the possession or were given incomplete flats.  

Contact a lawyer and send the landowner and the builder a formal legal notice explaining the statutory requirement of their signatures, and that refusal to do so may amount to deliberate inducement to breach contract or fraudulent concealment under the Indian Contracts Act as well as the Consumer protection Act. If the builder still refuses to cooperated, consider cancelling the sale agreement and demand full refund along with interest, by invoking Section 18 and 19 of the Real Estate (regulation and Development) Act, 2016.

Legal Principle: Section 37 and 39 of Indian Contracts Act. Consumer Protection Act of 2019. Section 18 and Section 19 of the Real Estate (Regulation and Development) Act, 2016.

• Is it legal for the builder to refuse to sign the agreement?

Yes. Law requires that no person must be forced to sign an agreement unless they are required to do so by a contract or due to statutory obligation.

• Can the bank issue the loan without the quadripartite agreement?

No. The banking regulations requires the banks to ensure that the lender complies with the obligation to complete the construction. Without such an agreement, the banks would be left with no enforceable recourse against the builder, if the construction is completed as require. SBI in particular, has, strict policies that mandate this requirement. Thus, SBI generally will not issue a home loan for a property under construction in via JDA agreement, without obtaining a duly signed quadripartite agreement.

I hope this answer helps. In case of future queries, please feel free to contact us. Thank you.

You have entered into a sale agreement with the landowner for a flat in an under-construction gated society project in Hyderabad. You have already paid 15% of the total consideration and applied for a home loan from SBI to finance the remaining amount. The flat is part of a landowner-builder development arrangement, and the specific unit you are buying belongs to the landowner’s share.

At this stage, the bank has asked for a quadripartite agreement to be signed by you, the landowner (seller), the builder (executor of construction), and the bank. This agreement is necessary to ensure that the builder assumes formal responsibility to complete the construction and hand over the property. However, the builder is refusing to sign this agreement without giving any valid reason, and the landowner is pressuring you to convince the bank to disburse the loan without the builder’s signature.

The builder’s refusal raises serious concerns. Since the property is still under construction and the builder is responsible for finishing the project, his unwillingness to sign the agreement shows that he does not want to take legal responsibility for completion or delivery. This may indicate unresolved disputes between the landowner and the builder or possible non-compliance with legal or regulatory requirements.

The bank is justified in insisting on a signed quadripartite agreement. Without it, the builder has no contractual obligation towards you or the bank. If you allow disbursal of the loan without this agreement, you risk the builder abandoning the project or failing to complete it. The landowner may refuse to take responsibility for construction delays, and you could face serious issues such as non-receipt of possession, non-issuance of occupancy certificate, or legal complications in resale or registration. You would still be liable to repay the bank even if the project remains incomplete.

You should firmly refuse to proceed with disbursal unless the builder signs the agreement. Ask for a copy of the registered joint development agreement between the landowner and builder and review its terms to understand the builder’s obligations. Notify the bank in writing about the builder’s refusal to sign and request that they pause loan processing until the agreement is duly signed. You should also verify whether the project is registered under Telangana RERA and, if not, consider filing a complaint. Consulting a property lawyer to examine your sale agreement, the builder’s legal responsibilities, and the RERA status is advisable. Do not succumb to pressure, as signing without the builder’s legal commitment exposes you to financial and legal risks.

In case you need my assistance in the matter I can be contacted on 

Regards,

YUGANSHU SHARMA

SYS LAW OFFICES