Can noc protect buyer incase of existing mortgage


Hi All,

I have finalized an apartment and after paying 10% money, when I had applied for EC, I figured out that there is an existing mortgage on many units in the apartment project that the builder/developer has entered into.  Based on my request the builder has obtained a NOC from the lending bank and provided a scanned copy of the same to me.  The NOC, addressed to the builder, states that the lender does not have any claims on the specific unit that I intend to purchase as long as the remaining sale proceeds are deposited into a specific account number.  The builder further says that though I issue the cheque to the same account number for the remaining 90% of the sale consideration there will NOT be any rectification/relinquishment deed which will remove this specific unit from the mortgage and it will happen only after the total mortgage that they have taken has been closed satisfactorily.  Considering that I have the NOC from the lending bank, what are the risks involved in this deal?  What if the builder goes bankrupt and does not service the mortgage?

Thanks for reading and Thanks in advance for your expert opinions.

 
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If the bank issues NOC in favur of the builder for that particular unit which you intend to purchase. Then it should give you confidence to execute the transaction.But with caution.

You should visit that particular bank and speak with the branch manager about the loan status report of the Builder and cross check about the NOC letter issued by the Bank. I

f the Bank says that the Builder is paying regular emi to the bank and there is no default, then after doing complete legal due diligence of the property and documents you may execute the agreement with the builder.

Regards

Adv. Rohtit Dalmia

9324538481

 
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Founder

WE FULLY AGREE WITH THE ADVISE MENTIONED BY Adv. Rohtit Dalmia

SIRIUS GROUP

LEGAL AND CORPORATE CONSULTANTS

NGR 

7667889007/9551166002

 

 
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