Tititle of the property and home loan
Rajesh
(Querist) 24 August 2014
This query is : Resolved
I am planning to buy a new property and on verification of the title deed it has been observed that this property has been transferred though multiple ownership. I am planning to avail housing loan to buy this property and the bank has been confirmed me that this is an approved project and the verification of the document has been done already by the banks legal. For a reconfirmation I have given this for my advocate and he could find some minor irregularities in it. My question here is, being an approved project by bank, if in case someone is making a claim on this property on a future date, will I be liable to compensate bank on the amount of loan available by me.
Devajyoti Barman
(Expert) 24 August 2014
If the project is approved, you need not worry much.
Rajesh
(Querist) 24 August 2014
Thanks a lot for your help!!!!!
So my liability to repay the loan is limited to the property attached to the loan and the bank can’t attach my personal properties to settle the loan, right?
Anirudh
(Expert) 24 August 2014
Approval by Bank is nothing. That is satisfaction from Bank's end whether it can advance the loan or not. Having advanced the loan, if any thing happens, the borrower alone is responsible and not the bank!!
So, simply do not go on the basis of the fact that according to the Bank the project is sanctioned/approved.
You say that there are some minor irregularities according to your lawyer. Please indicate what are the minor irregularities? Whether they have any bearing on the title to the property or not will not be known unless one knows the irregularities.
Therefore, indicate the irregularities so that one can apply ones mind and give an answer.
Rajesh
(Querist) 24 August 2014
As I said earlier, property has been transferred though multiple ownership where in which one transfer was made to a company. The next transfer suddenly after this was to an individual by the director of the above said company. Will this transaction be valid? Post this there are about 5 to 6 transactions were also done. Will it become an issue for me if I buy this property?
Anirudh
(Expert) 24 August 2014
What is the minor irregularity pointed out by your lawyer?
Rajesh
(Querist) 24 August 2014
Thanks a lot for your great advice!!!!
As it belongs to a company, the director alone can’t take a decision on selling the property in the normal course or else we have to see other factors to substantiate the transfer. He has not given any clarity on what factors we need to check on this matter. Coud you please advice?
Rajesh
(Querist) 24 August 2014
Thanks a lot for your great advice!!!!
As it belongs to a company, the director alone can’t take a decision on selling the property in the normal course or else we have to see other factors to substantiate the transfer. He has not given any clarity on what factors we need to check on this matter. Coud you please advice?
Rajesh
(Querist) 24 August 2014
I was giving answer to Anirudh's question...he asked me what is the irregularity noted by my advocate on the deed.Let me know if you want further clarity on this matter...
Anirudh
(Expert) 24 August 2014
OK. I Understand. But that presumed irregularity will not be a factor in your transaction and no impact would be there on that score.
Devajyoti Barman
(Expert) 25 August 2014
In secured loan, only the security ( flat) is amenable to attachment.
Rajesh
(Querist) 25 August 2014
Thanks all for the great advice on this matter. This was a huge help for me to take a decision!!!!
One final clarification…you meant to say that there is no resolution required to pass by the company for the sale and the reference of the same is not required in the transaction deed.
Anirudh
(Expert) 25 August 2014
On the contrary, if the Company had any objection that the property had been sold by one of its Directors unauthorisedly, then it ought to have protested long before and certainly not when the property had already passed through five different hands.
Rajesh
(Querist) 25 August 2014
OK Anirudh, thanks for the clarification.
Rajendra K Goyal
(Expert) 25 August 2014
Yes the resolution should be there about sale of property, may be the director was authorized by some resolution to sell. May find out.
The liability is not only limited to the property charged, but other personal property of the borrower is also liable for the payment of outstanding loan. The Bank agreements are designed accordingly.
ajay sethi
(Expert) 25 August 2014
agree with MR anirudh
malipeddi jaggarao
(Expert) 25 August 2014
My advice after analysing entire thread posts is as follows:
1. Though the Bank's legal adviser gave a clear title report, it is your responsibility to verify the correctness of title while buyig the property.
2. As you referred to your advocate who pointed out about the resolution authorising the Director to sell the property, you can ask for the copy of resolution.
3. In case after obtaining Housing Loan, if the title is proved defective, you can not rely on the legal opinion given by the advocate. They will not give you a copy of the same.
4. If recovery proceedings are initiated, as expert Mr.Rajendra Goyal clarified, though it is secured loan, if the realized value is not sufficient to meet the entire liability, the Bank reserves its right to go upon the rest of the properties.
Your query is simple. Obtain the resolution additionally. Normally Bank's advocates do look into all these aspects. However, as another advocate pointed out the irregularity, you ask the vendor to rectify the irregularity.
Raj Kumar Makkad
(Expert) 25 August 2014
I do agree with the wise advice of the experts.
T. Kalaiselvan, Advocate
(Expert) 30 August 2014
I too endorse the views and opinions of learned experts, especially that of Mr. Anirudh and Mr. Jagga Rao.
