Documentation for payment from other source before home loan
reena k gupta
(Querist) 28 August 2013
This query is : Resolved
Can any body tell me how to legally document the arrangement of receipt ( before home loan ,from other sources of buyer) on sale of house property and payment back of amount on receipt of cheque in the name of property seller from bank after sanction of housing loan.. I hope my query is clear.. Thanx & regards.
Guest
(Expert) 28 August 2013
A CA and tax consultant can help you appropriately.
Devajyoti Barman
(Expert) 28 August 2013
your query is not clear ..at least to me.
reena k gupta
(Querist) 28 August 2013
What do I mean to ask that If 'A'(seller of property) receives the sale proceeds from the 'B' buyer on the condition that when home loan will be sanctioned & cheque will be issued by the bank in the name of 'A'( the seller) then 'A' will return the second payment to the buyer in this case can both the seller & the buyer enter into an agreement for this arrangement in form of a memorandum etc.
Sudhir Kumar, Advocate
(Expert) 28 August 2013
Your query is vague.
Vague queriest is liable to suffer incomplete advise which may even be wrong
You have not stated what is property and whether sale is registered or not.
from the given facts it appears that when sale proceed is received from buyer the sale is complete.
I am afraid issue encashment of this cheque may be a fraud.
Bank is giving loan for purchase of house which stands sold. They are not giving loan for sale of cheque.
If you tell the bank that price stands paid they may not issue the cheques.
So you cannot enter into a binding contract with intent to cheat the bank.
Rajendra K Goyal
(Expert) 28 August 2013
In case the money (by arranging from other sources)has been paid to the seller of the property (as advance)and loan on property is applied to the Bank. The Bank will issue the loan cheque(after sanction) in the name of the seller. You want to know how to get back amount paid to seller previously and want to enter some agreement in this respect.
If you query is as above, better inform the Bank that this much amount has been paid already by short term borrowing. Attach the receipt of the amount(from seller) with loan application. Request the Bank to issue separate cheques in the name of such short term lenders from the loan amount. Bank should not hesitate to accede to such request.
If you pay the seller from short term loan from personal sources and also from Bank after sanction of loan, it would amount to double payment and may not receive back easily from the seller.
Giving double payment to the seller (BY short term borrowing and also from Bank loan) is full of risk.
Anirudh
(Expert) 28 August 2013
Dear Reena,
I think the entire transaction would be through the means of cash and not cheque. Therefore the question of accounting would not arise.
However, in order to safeguard the interests of the buyer who makes the cash payment, pending regular sanction of bank loan, he may like you to enter into an agreement to return the cash back to him, once the bank loan is sanctioned and the bank issues the cheque towards the sale proceeds.
In my considered view, instead of entering into any agreement, a simple stamped receipt acknowledging the receipt of money is enough. As and when the bank cheque is received by you, the buyer can return the stamped receipt to you and take back the cash. HOWEVER, NOW YOU SHOULD BE CAREFUL TO GET A RECEIPT FROM THE BUYER SAYING THAT I HAD EARLIER GIVEN THE MONEY TO "X" WHICH I HAVE RECEIVED BACK TODAY. (Simply getting back the original receipt granted by you will not be sufficient, as the buyer can retain a photocopy and play havoc.)
reena k gupta
(Querist) 29 August 2013
Thank you all for your responses.
Let me tell you the exact situation; you might be aware of ongoing strike in Andhra.
Because of that those concerned parties are not able to register the sale deed but the buyer wants to take the possession of the house property immediately. For which seller is ready after payment of full amount. that is why buyer has temporarily arranged the fund from personal sources. Moreover, I am concerned with both the parties that is why if any legal arrangement is possible both of them will be safe.
Rajendra K Goyal
(Expert) 01 September 2013
In such conditions convince your Bank to issue cheques to reimbursement the payments contributed by short term lenders from loan amount. These cheques may be issued after registration and property mortgaged with the Bank. Submit receipt from the seller regarding full payment to him. Generally Bank agrees to such arrangement.
