Buying plot - original deed pledged


hi,

i'm in the process to buy a plot in a layout with 400+ plots

i'm financing 45% of the plot cost and 55% is from bank loan (Bank A)

builder informed me that 108 plots (including my plot) in the layout is pledged with Bank B and hence original deeds are with Bank B

Bank B gave a NOC to Bank A and bank loan is approved

NOC was addressed to Bank A manager and requesting them to release the required loan without specifying any amount

my concern now is, what happens if builder defaults on the loan

Builder has given an indemnity clause in the sale deed, but the risk scenario i'm evaluating is "what happens when the builder defaults on the loan"

Since Bank B has given NOC to Bank A, i assume it allows Bank A to recover the loan amount

But how to safeguard my 45%?

 
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Advocate/Attorney

Since the Bank B has given NOC to Bank A means that Bank B is allowing the Bank A to realise the amounts in case of default by the plot owner on the properties pledged by the Builder.  If the Builder defaults his loan, the Bank B will realise the properties pledged by Builder. If you have not committed any default in making instalments and your payment is correct, your 45% amount will be safe.  Anyway I have to go through the Agreement/MOU between you, your builder and the original owner of the whole land of 400+ plots.  You contact me ravinder2345@gmail.com for further doubts. 

 
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Hi Ravinder

"Since the Bank B has given NOC to Bank A means that Bank B is allowing the Bank A to realise the amounts in case of default by the plot owner on the properties pledged by the Builder.  "

this will safeguard only the 55% of the plot cost which is given as loan by Bank A

"If the Builder defaults his loan, the Bank B will realise the properties pledged by Builder."

in the above scenario, Bank B will allow Bank A to take the 55% it has given as loan to me

But remaining  45% (which is my money) is at risk. how to safeguard against that?

 
Reply   
 
Advocate/Attorney

Since B Bank has taken the properties as pledge of more value than the loan,  Bank B has not hesitated to give NOC to Bank A. 

Here the point is the pledging of property documents is to safeguard the loan given by Banks A and B and not to safeguard your 45% advance amount.  

If the Bank commits any  voilations, you have to approach the Consumer court or civil court. 

 
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i'm not able to understand the replies received. can anyone else please help clarifying.

 
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Have you entered into sale agreement with the builder?, if yes, have you read the the conditions therein fully?, if yes, did you understand all the conditions and have you been satisfied with them before signing it?  If No to all the above questions, it is always better to take an opinion from your own lawyer in all the aspects including the doubts you have posted here so that you do not stand cheated at a later stage due to the gimmicks of the builder who you expect to trap you at a later stage.

 
Reply   
 
Advocate

Take an Indemnity Bond from the builder indemnifying legal liabilities to the extent of 55% loan amount. and get the same acknowledged by the  Banker.

 
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