Agreement of understanding.

Querist : Anonymous (Querist) 20 August 2011 This query is : Resolved
One Mr.A has sold his land to Mr.B in the year 1979 and the same is registered in the name of Mr.B. Mr.B died in the year 1985 and Mr.C (son of Mr.B) got inherited property. Mr.C is now surviving and he has one son viz Mr.D. Mr.C made a layout in the land and the layout is approved by the gram panchayat in the year 1990. Mr.C and his son Mr.D sold this land (layout made for housing plots) to Mr.E in the year 2011 and the land is registered on 9-8-2011. Now Mr.E is selling these plots to the public with an understanding of constructing a house thereon.

I want to purchase the plot from Mr.E and enter into a contract for construction of house by taking a loan from LIC. The cost of the plot (222 sq.yds) is Rs.13.50 lakhs and the cost of construction is for 1000 sft is Rs.10.00 lakhs. I want to enter into an Agreement of Understanding for purchase of plot and construction thereon by giving an advance of Rs.5.00 lakhs by way of cheque. Mr.E (the builder) is saying that the agreement going to be entered into is only for the purpose of understanding (NOT REGISTERED) and for the purpose of getting loan from the LIC by me by submitting this agreement. MY REQUEST TO YOU ALL IS THAT CAN I GO AHEAD WITH THE ENTERING INTO AN AGREEMENT WITH THE BUILDER (the agreement which not going to be registered)AND THE BUILDER IS SAYING THAT SEMI FINISHED HOUSE WILL BE REGISTERED IN MY NAME AFTER GETTING LOAN FROM THE LIC.

PLEASE SUGGEST ME WHAT CAN I DO?

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ajay sethi (Expert) 20 August 2011
1) you wan to obtain loan from LIC
2) submit details of property you plan to buy to LIC
30 LIC will do due diligence of the project
4)if LIC is satisfied title is clear then only will loan be sanctioned .
5) LIC wont disburse the loan unless agreemnt duly stamped and registered is entered into between parties
6) in your case you are planning to pay substantail sum of Rs 5 lakhs as advance to builder without having any proper agreement .

7) in such a case you inform the builder that you will pay only nominal amount as token . only when project is sanctioned by LIC and loan dsibursed will you make balance payment

Advocate Rajkumarlaxman (Expert) 21 August 2011
I agree with our ecxpert Ajay Sethi

prabhakar singh (Expert) 21 August 2011
I too agree with our ecxpert Ajay Sethi

M/s. Y-not legal services (Expert) 22 August 2011
Rightly advised by mr.shethi.

girish shringi (Expert) 24 August 2011
See the credential of the Builder first.
Don't take unilateral decision,inquire about the project properly,make nominal amount as agreement amount and insist for the registering the agreement.

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