Buying of residential property
Rajesh Tandon
(Querist) 26 November 2012
This query is : Resolved
1. I'm writing to you in connection with a property query of my friend. My friend Mr A is going to purchase property worth 60.5 lakh from Mr B (The House Owner). Mr C is a tenant staying in the house of Mr B. However, as per the version of Mr B(The House Owner), Mr C(the tenant) was to buy the house of Mr B and gave a payment of Rs. 20 lakhs to Mr B and could not pay the balance amount. In addition, Mr B has got a outstanding loan of 8.5 lakh from ICICI bank. As of now Mr B is expecting the payment of 30 lakh in white and balance in cash. My friend A has liked the house very much. Mr C (the tenant) says that , even if one third of the amount of cash if given, he would vacate the house. Out of the amount to be given to the owner of the house Mr B, he wants to clear the outstanding loan. However, seeing the eagerness of my friend for buying the subject property, I've got a few apprehensions, especially when it is not a clean deal as three parties are involved.
2. Kindly suggest the following:-
a) Should my friend Mr A go-ahead for buying this property?
b) If yes, then how?
c) What all papers he must check and from which all agencies before buying this property?
d) Is it safe to enter into a deal with Mr B while Mr C is still occupying the house as the tenant and promising that the moment I get one third of the payment, I would move out of the house?
e) If at all, any payment given to Mr B and asking for vacation of the house from Mr C and yet if Mr C does not vacate, what are the legal implications?
f) Should my friend Mr A, check the rental agreement of Mr B (The House Owner) with Mr C (The Tenant)?
g) Even if Mr C (The Tenant) vacates the house after receipt of one third amount i.e , ten lacs, and balance amount is received by Mr B, what is the guarantee that Mr B has already not sold the property to Mr C/somebody else and Mr C might be asking additional amount to vacate the house, and thus get into further legal complications. What is the way out to check the property papers as to who is the actual owner?
h) Even if Mr C (The Tenant) vacates the house after receipt of one third amount i.e , ten lacs, and balance amount is received by Mr B, what is the guarantee that Mr C will not file a suit against Mr B that he has been forcefully evicted out of the house and claiming that he has been regularly paying the rentals and roping my friend and Mr B (The House Owner) into legal controversy? How to guard against this scenario?
i) Though , as per the version of Mr B, he has taken a house loan on the subject property and naturally if that is true, then the original registry, NOC and other connected papers must be in the bank. How to ensure that it is not disputed property as of now?
3. Please guide me after keeping in the mind, my above apprehensions and the subject case. I may please be educated on any other alarming issues which may emerge/come to the notice of the legal experts from the subject matter.
Raj Kumar Makkad
(Expert) 26 November 2012
2 A, No.
b. NA
c. Whether any agreement to sale has already been executed by B in favour of C or not, whether any presence had been got marked by C on thhe fixed day of registration of sale deed or not, whether any notice thereafter was issued by him to B or not and whether any civil suit is pending between them or not and whether any stay order is under operation or not and whether any lien, mortgage, gift or any type o third party interest has been created in that flat by owner or not?
d.If an MOU is executed prior to agreement to sale and C binds himself against this term only then your friend should move ahead.
e. Your friend shall get only ownership and he shall have to file eviction petition against C.
g. yes
h. already replied. Execute MOU.
i. Get Search report prepared from local lawyer and moreover a property already mortgaged with banker cannot be sold without permission of banker.
3. For more education on the subject, you friend or you should incur some money and should avail the individual services of lawyer.
ajay sethi
(Expert) 26 November 2012
your friend is purchasin property worth Rs 60 lakhs he can easily afford legal fees .he should only buy the property if the seller is giving immediate vacant posession of the premises . since C is still in posession of the premises your friend should avodi purchasing the said property .
Rajesh Tandon
(Querist) 26 November 2012
Iam extremely grateful to Mr Raj Kumar Makkad & Shri Ajay Sethi both for prompt replies.Mr RajMakkad, you have beautifully answered point wise to my querries. May i request you to kindly further clarify an issue connected with lien & mortgage. Since both the terms more or less convey the same meaning except that in lien the title of property may still be with borrower as against in mortgage & how lien & mortgage may have different legal implications/ connotation inthe subject case. A last request is if you could clarify as to what did you meant by mentioning "whether any presence had been got marked by C on the fixed day of registration of sale deed or not, whether any notice thereafter was issued by him to B"?
With profound regards.
Raj Kumar Makkad
(Expert) 27 November 2012
I can definitely clarify the desired terms but for that purpose, you shall have to personally contact me and shall have to engage me for that purpose at my terms and conditions.
Rajesh Tandon
(Querist) 28 November 2012
Thx.Will always be grateful to you for your professional advice rendered out of your precious time. Regards.
prabhakar singh
(Expert) 28 November 2012
"May i request you to kindly further clarify an issue connected with lien & mortgage."
your entire post needs a careful personal dealing by an adept civil lawyer well versed with property title search.
As much as was possible has been tried by Mr. Makkad WHOSE GENEROSITY PROVOKED YOU TO ASK HIM MORE WHICH HE DENIED.TO KNOW DIFFERENCES
ONE SHOULD READ CHAPTER 9 OF INDIAN CONTRACT ACT 1872 AND TO KNOW ABOUT MORTGAGES ONE SHOULD READ PROVISIONS 58 ONWARD IN TRANSFER OF PROPERTY ACT 1882.
Rajesh Tandon
(Querist) 28 November 2012
Thx a ton Mr Prabhakar for your necessary Guidance. Regards.
prabhakar singh
(Expert) 28 November 2012
Anyway I make my self agree to let you have a good idea about your quest.A mortgage is a conveyance or contract that pledges real or personal property as security for the performance of an obligation, usually the payment of a debt. The term comes from the Old French "dead pledge," apparently meaning that the pledge ends (dies) either when the obligation is fulfilled or the property is taken through foreclosure.In most jurisdictions(I mean countries) mortgages are strongly associated with loans secured on real estate rather than movable property (such as ships,car,gold etc.) and in some cases only land may be mortgaged. Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately. See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property.In many countries,as also in ours, it is normal for home purchases to be funded by a mortgage.
In law, a lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienor and the person who has the benefit of the lien is referred to as the lienee.
Rajesh Tandon
(Querist) 28 November 2012
Thx a ton Mr Prabhakar. I appreciate your generosity & making an endeavour by walking an extra mile to clarify the querry. Regards.
