Agreement to sell for mortagaged property

sood (Querist) 24 June 2011 This query is : Resolved
Is it right to enter into an agreement to sell of a property mortagaged with a Bank. What safeguards should the buyer incorporate to ensure that the agreement is honoured

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bhagwat patil (Expert) 25 June 2011
Take the consent of the bank and take the countersign of bank ofiicer on sale deed.

Advocate. Arunagiri (Expert) 25 June 2011
You can enter into a sale agreement for the property which is under the bank loan, no consent from the bank is needed.

R.Ramachandran (Expert) 25 June 2011
Dear Mr. Sood,
The property is under mortgage to the bank. The person who owns the property has to repay the loan taken from the bank. In case he defaults in paying the loan amount to bank, bank will take action to auction the property. In that scenario, what will be your position, in case you enter into buying that property with the person who currently owns the property? At that time your agreement to sell will not help you. Nor your friend will be in a position to pay back the money taken from you. Therefore, think before acting.

sood (Querist) 25 June 2011
The value of the property is approximately four times than the loan amount. Is my interest safeguarded or how can I safeguard it.

R.Ramachandran (Expert) 25 June 2011
If the value of the property is worth 4 times, than the loan from the bank, then in the event of non-payment of loan, the bank will take possession of the property and auction it. In the auction, who will be the successful bidder cannot be predicted. In any case, your idea of purchasing the property will not materialise in that event.

If you are really interested in buying the property, then why don't get into an agreement to sale with the seller, containing a clause whereby he will immediately repay the loan to the bank (from out of the money that will be paid by you for the property) and then executethe sale deed to you. That will be the more safest way.

Naturally, to safeguard your interests, you have to take the help of a lawyer in getting drafted a proper agreement.

prabhakar singh (Expert) 25 June 2011
Expert : R.Ramachandran is right.

Advocate. Arunagiri (Expert) 25 June 2011
In the sale agreement itself, you can include the clause that the seller has to redeem the property and register in your name within a time limit.

Ask the seller to repay the bank loan by using your advance money. You can issue a DD in the name of the bank for this purpose of settling the bank loan. Enter these details in the sale agreement.

Nagesh Rudrakanthwar (Expert) 26 June 2011
Yes, as per above expert comments you can initiate sale deed by putting the clause that the seller should repay all the debts on
the property. the initial amount paid for the
property is exerted to repay the debts on the property. the purchaser is not responsible for any debts & any liability on the property.