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Maheswar Das (proprietor)     12 June 2024

Sale of unregistered property

Mr x has purchased a flat from Builder Y on partial payment by availing loan from a PSU bank on the basis of a sale agreement by the builder who holds GPA. Mr x has not fully paid the balance price as registration of sale could not be effected due to some technical issues. Mr x has a sizable outstanding on house loan. Now x wants to sell off the said flat to z. Mr Z is interested to purchase the said flat, partially through loan and rest from own resource. 


How the sale of property can take place in the above scenario? Can it be done though a quadripartite agreement among X,Y,Z and the Bank who has released the loan ?


 5 Replies

P. Venu (Advocate)     12 June 2024

The decision depends upon the discretion of the lending Bank.

T. Kalaiselvan, Advocate (Advocate)     12 June 2024

Terms and conditions of property deals, where a financial institution is also involved apart from the buyer and the seller typical, are laid under a different legal document, legally known as a tripartite agreement.

A tripartite agreement has to be signed by these three parties, when a buyer opts for a home loan to purchase a house in an under-construction project.

“Tripartite agreements have been established to assist buyers with acquiring loans for properties against the planned purchase of the property. Since the home/apartment is still not in the name of the customer until possession, the builder is included within the agreement with the bank,

hese agreements usually state that if the owner/borrower is in breach of the non-payment clause of the loan agreement, the mortgager/lender becomes the new owner of the property.

Dr. J C Vashista (Advocate )     13 June 2024

Make financier a party to the sale transaction.

Maheswar Das (proprietor)     13 June 2024

Warm regards and thanks to all learned advocates who have answered the query.  

From the replies given so far, I can conclude that transaction can be effected with the consent of the builder (real estate developer), and the lending bank embodied in an Agreement to sale ( registered/unregistered?)

Please note, this is a scenario in the state of Odisha where relevant Ordinance brought out for registration of apartments is not still implemented.

Now. I am inclined a make a subsequent query:

1. When registration of the sale deed takes place in future who will be signatories to the same? 

2. Whether the builder be a confirming party as because occupancy certificate (OC) is required for taking possession of the said premises?

We will definitely consult a local advocate who is dealing with such matters. However, to a layman, opinion of some luminaries in this forum would be nothing short of confidence boosing.

Eagerly awaiting promt replies.
















P. Venu (Advocate)     13 June 2024

Why no registration of apartments? Registration of conveyance in respect of immovable property is  mandatory. The affected persons can approach the High Court seeking directions to the authorities to adress the administrative lacuna.

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