Based on the facts stated, your concerns are well-founded. In an assignment transaction involving an under-construction or recently completed apartment, particularly where the seller is an NRI, the payment mechanism, execution of the assignment agreement, and registration process must be carefully structured to ensure that title is not transferred before the seller receives the agreed consideration.

With respect to your first query, you should not execute an unconditional Assignment Agreement unless the agreement itself adequately safeguards your interests. The Assignment Agreement should clearly stipulate that it becomes operative only upon fulfillment of specified conditions, including payment of the buyer's agreed contribution and confirmation of the bank's loan disbursement. Alternatively, the parties may execute the agreement simultaneously with the payment process through an escrow arrangement or under a legally binding undertaking. Merely signing the Assignment Agreement and waiting indefinitely for payment exposes you to unnecessary risk unless the agreement expressly provides that no rights, title, or interest pass to the buyer until the entire sale consideration has been received.

Regarding your second query, in most housing loan transactions, the buyer's bank disburses the loan amount only after all conditions imposed by the lender are satisfied, which may include execution of the necessary transfer documents, obtaining the builder's no-objection certificate, and confirmation that the property is ready for registration. It is common for the bank to release the loan amount directly to the seller at or immediately before registration. Since the builder has informed you that your physical presence is not required at the time of final registration, you should ascertain the exact mechanism proposed by the builder. If registration is to be completed by the buyer on the strength of documents already executed by you or under a power of attorney, you must ensure that the bank's disbursement is irrevocably secured before those documents are released or acted upon.

As regards your third query, your rights can be protected by ensuring that the transaction documents contain appropriate safeguards. The Memorandum of Understanding and the Assignment Agreement should clearly provide that the assignment shall not become effective until the full consideration has been received by you. The agreements should specify definite timelines for payment, provide that any delay or default entitles you to terminate the transaction, and preserve your right to recover damages or forfeit the buyer's advance, if so agreed. If the buyer is obtaining finance, the buyer should also furnish a sanction letter from the bank confirming the loan amount and the conditions for disbursement. Where feasible, an escrow mechanism may be adopted so that the executed documents are released only upon confirmation that the entire consideration has been credited to your account. If a power of attorney is being used because you are an NRI and will not be present in India, it should be carefully drafted and, wherever possible, be a limited or conditional power that cannot be misused before payment is received.

In your case, the most critical document is the MOU itself. The clause stating that the buyer's contribution will be paid upon execution of the Assignment Agreement and that the bank will disburse the balance at the time of final registration needs to be examined carefully to determine whether it adequately protects your interests or leaves a gap between execution of the documents and receipt of the sale consideration.

Accordingly, before signing the Assignment Agreement or any power of attorney, you should have the entire transaction structure—including the MOU, proposed Assignment Agreement, builder's transfer policy, and the buyer's loan sanction terms—reviewed by a property lawyer. This will ensure that you do not part with your legal rights or enable registration without first securing payment of the entire agreed sale consideration.

In an assignment transfer of a builder property in Bangalore, your transaction is structured as a Tripartite Assignment (between you as Assignor, the buyer as Assignee, and the builder).

As you are assigning your rights under the original Builder-Buyer Agreement, the final Sale Deed will be executed directly between the Builder and the Buyer. This is why the builder correctly mentioned that you will not be needed at the final registration.

The buyer pays their own contribution (down payment) directly into your NRO account first.The Assignment Agreement is executed only when the buyer’s payment clears. If the bank or builder requires you to sign the Assignment Deed first to process the loan, do so  through a Power of Attorney (POA) holder, where the signed deed is released to the builder/buyer only upon receipt of cleared funds.

Banks funding assignment cases disburse the loan amount upon execution and endorsement of the Assignment Deed, not at the subsequent Sale Deed registration between the builder and buyer. The buyer’s bank issues a Demand Draft (DD) or direct RTGS payable to your NRO account upon receiving the executed Tripartite Assignment Agreement, Builder NOC, and payment receipts.

Request an official written confirmation from the builder stating that the Assignment / Name Transfer in their records will only be finalized upon receiving a No Dues Confirmation / Payment Receipt from you.

Your role as seller ends at the Assignment Deed stage. Ensure your MOU explicitly states that 100% of your agreed payout (buyer funds + bank loan) must reach your NRO account before or at the exact moment the Assignment Agreement is handed over to the builder/buyer.

You should not sign and hand over the Assignment Agreement without receiving the buyer's contribution. Instead, use an Escrow arrangement where your signed agreement, original property documents, and builder NOC are kept in the custody of your lawyer or an escrow agent. They are strictly instructed to release these documents to the buyer only when your bank confirms receipt of the buyer's funds.

Dear Sir/Madam,

Do not sign an unconditional Assignment Agreement or permit the builder to transfer/register the apartment until the agreed sale consideration is secured. The assignment should be tripartite between you, the buyer and the builder, with clear payment conditions.

Require the buyer’s contribution to be credited first, and obtain a written bank disbursement undertaking confirming that the loan amount will be paid directly to your designated account upon assignment/registration. Alternatively, use an escrow arrangement and provide that the assignment becomes effective only upon full payment.

Since you are an NRI, the buyer must also deduct and deposit applicable TDS under Section 195 from each payment.

Have a Bangalore property lawyer revise the MOU and assignment agreement, include automatic termination for non-payment, and obtain the builder’s written confirmation that no final deed or possession will be issued to the buyer until your full consideration is paid.

Advocate Saurabh Agrawal