Buying a motgaged property
Buyer in talks with sellers A & B, who want to sell their joint property (equal shares) comprising of 2 flats (1st Floor & 2nd Floor) along with the roof on 3rd floor (with construction right) for a sale consideration of Rs. 90 lacs.
A & B had jointly taken a housing loan from a nationalized bank for Rs. 60 lacs and after using Rs. 10 lacs from their own funds acquired the said property for a total of Rs. 70 lacs, back in 2011.
According to the recent "Loan Outstanding Certificate" issued by the bank, the outstanding balance in the loan account is nearly 58 lacs. Each EMI is nearly Rs. 60,000… No. of EMIs is 228. So A & B are already defaulting since 2011 as only Rs. 2 lacs have been repaid to the bank... which comes to around 4 EMIs, out of more than 48 EMIs that were required to be repaid between 2011-15. ( I wonder why the bank has still not attached the property??!! )
All the original documents are in bank's custody. Bank says that it will take 10 days from the date of loan closure and generation of NOC to release the documents to the sellers. The sellers are not in their capacity to repay the loan themselves, so asking the buyer to repay the outstanding loan amount on their behalf to the bank.
Buyer cannot register the property as soon as the loan is repaid using his funds as it will take 10 days to get the originals, that too from the seller (as the originals will be released to sellers, NOT the buyer)!
Now, anything can happen in those 10 days. How can the buyer legally bind the sellers in such a situation? A sale agreement is needed? Does the bank need to be a party to it? What happens if the sellers do not honour the agreement after the buyer repays the outstanding amount to the bank on their behalf…? There is huge possibility of getting scammed if the sellers turn out to be fraudsters.
Currently the buyer is relying on the certified copies of the devolution documents from the sellers, the originals of which are pledged.
How can the buyer proceed with the purchase & registration of the mortgaged property while safeguarding his interests?
Some pointers in the right direction would be very helpful. Thanking you in anticipation.