Flat Cancellation under Tripartite agreement.
I have booked a Flat with builder and bank under Tripartite agreement. One of the clause if Builder cancels the allotment in favour of Borrower, Builder will refund the amount to Bank after some deductions and 90 days. I have paid EMI till 1 year. Now builder has stopped construction from last 4 moths. He is saying flat possession delayed by 3 years. After pressurizing he agrees for Flat cancellation and He says will provide flat cancellation document. so that I can provide to bank. Bank will directly recover from builder. Is this possible ? I can collect Flat cancellation document and provide it to bank. My bank will be recovered from builder ?
Asked in Property Law from Bangalore, Karnataka
1) even if builder cancels your allotment no guarantee that he would refund money within 90 days to the bank
2) if builder fails to refund bank will continue to hold you liable for repayment of its dues
I would advise you not to complicate the things.
If the builder finally agrees to handover the documents to Bank directly then let it happen.It is not not going to cause any harm.
Do note that because of your insistence if the builder refuses to do so then you have seek legal recourse which is both time taking and costly.
If the tripartite agreement says that the builder shall return the amount received from bank upon cancellation, then he is obliged to perform his part of contract or else he can be sued for recovery with interest.
You can communicate the decision for cancellation in writing to the builder and obtain the documents for cancellation, submit it to the bank with instructions to recover the loan amount from the builder directly, if there are provisions for that in the tripartite agreement.
If the tripartite agreement provides for cancellation by builder and thereafter entire amount collected from you towards this flat has to be refunded by the builder to the bank, then you can go ahead and obtain the cancellation from the builder and share this document with the bank, who will then proceed to collect the payments from the builder.
Yes this is possible and it is legal. You may proceed.