Whether notarized agreement for sale of immovable property is valid
Manoj
(Querist) 18 December 2011
This query is : Resolved
Good Morning to all experts
My query is :
(1)Whether A notarized Agreement for sale is valid in Gujarat.
(2) Can a Bank disburse the loan on Notarized Agreement for sale between a prospective purchaser and Builder/Owner/Developer wherein the property in question i.e flat is under construction.
(3)If yes what are the precautions that Bank should take and what are the documents that Bank needs to execute as security when the agreement for sale is notarised only.
(4) What are the subsequent documents that needs to be executed between a purchaser and owner/develooper if bank advances loan on notarised agreement for sale of flat that is under construction in order the protect the interest of the Bank.
(5) What are the document that Bank should take from the Borrower and from the Land owner/Developer in order to protect its interest. i.e Bank. Documents can be substantial documents for enforcement in case of default from the borrower/developer
DEFENSE ADVOCATE.-firmaction@g
(Expert) 18 December 2011
It is the personal satisfaction of bank manager to give loan, notarised sale agreement is no legal value.
ajay sethi
(Expert) 18 December 2011
1)for the bank it is always advisable to insist on registered agreement for sale .
2)bank should not disburse loan on notraised agreement for sale . insist on proper stamped and registered document for sale .
3) letter should be written to builder that flat is mortgaged to bank . original agreement , registration receipt etc should be in custody of the bank .
4) builder should be requested not to permit any subseqent sale by borrower without obtaining prior approval from bank .
5)in addition bank needs to be satisfied that title of builder is clear and marketable . take 30 years serach of the property .
Raj Kumar Makkad
(Expert) 18 December 2011
1. If sale is for movable property then it is valid but if the same is for immovable property then it is illegal as it requires compulsorily registration in views of SC judgment dated 08 Oct 2011.
2. Better you ask this question from concerned bank branch officer.
3. In my view, bank should not disburse loan to prospective buyer if the agreement is not registered with registrar paying requisite stamp duty and once it is registered, bank can move ahead and can obtain all such other securities as it deems fit within its prescribed procedure.
4. Bank may demand duly signed post paid cheques, security of some other immovable property, guarantor, agreement between the builder and buyer, all necessary licences obtained by builder, title of building under construction, its search report since last 30 years etc.
5. Apart from the documents mentioned above, bank can obtained signature of borrower on advance acknowledgements of its outstanding dues, receipt of notices etc.
Manoj
(Querist) 19 December 2011
Good Morning and thanks to all experts. Can any one provide me with the link of SC Judgement dated 08 oct 2011 about compulsory registratioin of Agreement for sale mentioned by expert "Mr. Raj Kumar Makkad" Thanks
R.Ramachandran
(Expert) 19 December 2011
The case is Suraj Lamp Industries v. State of Haryana.
The matter was decided on 11.10.2011 and not on 8th Oct.
Further more, the Supreme Court did not lay down any new law, it only reiterated the existing legal position that unless a sale transaction in an immovable property involving a value of more than Rs. 100/- is properly registered by paying appropriate stamp duty and registration charges, the sale transaction is not complete and the buyer cannot get clear ownership title.
This ruling has come to clarify the position, because in most of the northern States like Delhi, Haryana, Punjab etc., most of the transactions in immovable property used to take place merely by granting General Power of Attorney / Special Power of Attorney and WILL, without getting the same registered in the name of the purchaser. This was being done to avoid stamp duty and registration charges. The GPA/SPA/WILL holder used to further indulge in sale transaction of the said immovable property to other buyers and the chain goes on.
The SC only said that such transactions does not create any clear title in the name of such buyer who only gets a GPA but not a registered proper sale/conveyance deed in his favour.
It should be remembered that in respect of an immovable property a SALE DEED is required to be compulsorily registered, and only then the buyer would get a clear title, otherwise NOT.
R.Ramachandran
(Expert) 19 December 2011
The decision in Suraj Lamp case, which was omitted to be attached with the earlier reply, is now attached for your ready reference.
Manoj
(Querist) 19 December 2011
Thanks Sir.
Guest
(Expert) 19 December 2011
Nicely advised by experts S/Shri Makkad and Ramachandran.
Manoj
(Querist) 20 December 2011
Thanks to all experts.
