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Rakhi Mahadik   15 June 2022

Purchase a Old Property

We have finalized a property which is 39 years old. we are in process of loan sanction on basis of our age we are getting tenure of 20 yrs but financial institution telling us the property is old and if it goes for redevelopment before 20 years then we have to pay whole amount of balance loan for getting property papers they are telling they will not provide any noc letter to builder

Rakhi Mahadik


 4 Replies

SHIRISH PAWAR, 7738990900 (Advocate)     15 June 2022


Banks will have their own terms and conditions while sanctioning the loan. You may try to avail loan from another financial institution. 

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     16 June 2022

When you approached financial institutions like Banks for loans, they have their own risk-mitigating measures well within RBI guidelines. If they put a condition that in case the property is to be given for redevelopment before completion of the loan repayment (20 years), you need to abide by it.


In case you are giving the property for redevelopment before completion of the repayment, you need to inform this to the Builder and accordingly negotiate the matter if and when such an opportunity arises.

P. Venu (Advocate)     16 June 2022

It is better that such contingencies are taken care as and when they arise. There cannot be any certainity as to future.

Sravika Reddy Kohir   17 June 2022

Hello Rakhi Mahadik, I acknowledge your question. When a loan is sanctioned, there are certain criteria to be fulfilled for the same. Likewise, when any old property is being purchased which isn’t in a proper condition certain more details are to be magnified and checked. Each financial institution has its own guidelines rules etc, based upon such rules it shall function. Since here the financial institution has laid down the rule dur to the other aspects such as credibility, age of the property tenure of the loan etc. that redevelopment cannot be taken place until the amount is paid in total.

In few cases loan can be prepaid earlier to the date of the actual repayment in such a case the interest to be paid increases, as per the RBI guidelines mentioned.

Henceforth it is better to put a stay on the redevelopment process and then later according to the financial institutions rules when it is valid to start the same the NOC letter to the builder can be drafted and duly produced.

I hope I have answered your question.

Have a good day.

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