CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

I want to pur­chase a flat from a per­son whose flat is on home loan. I will buy the flat by tak­ing a home loan as the orig­i­nal ti­tle deeds will be with the seller’s bank. What process will be fol­lowed in this case?

—Prashant Arora The seller will re­quire his lender’s con­sent to sell the prop­erty to you. There are cases where the lend­ing bank of the buyer re­fuses to dis­burse the loan, un­less it first re­ceives the ti­tle deeds. On the other hand, the lend­ing bank of the seller re­fuses to hand over the ti­tle deeds un­less the ex­ist­ing loan is paid off first.

You can or­gan­ise some in­terim fi­nance to pay off the seller’s bank and get the ti­tle deed and then pro­ceed with the trans­ac­tion and get it re­im­bursed from your pro­posed lender. Al­ter­na­tively, the ex­ist­ing lender of the seller should give an of­fi­cial let­ter ad­dressed to your lender stat­ing the list of all doc­u­ments in­clud­ing the ti­tle deeds that it holds as se­cu­rity and also agrees to re­lease the same di­rectly to your lender within a fixed pe­riod af­ter re­ceiv­ing the pay­ment. The let­ter also men­tions the out­stand­ing amount on pay­ment of which the en­tire loan will be treated as fully dis­charged. It is nor­mal for the amount to be men­tioned as of a fu­ture date. In such a case, the bal­ance amount of sale price is paid to the seller af­ter re­ceiv­ing the ti­tle deeds from the seller’s bank.

Can un­mar­ried cou­ples or friends be co-owners of a flat? Can they avail a joint loan? Or can they in­di­vid­u­ally take loans from banks for the same house?

—Ashish Vohra There is no re­stric­tion as to who can jointly own a flat; how­ever, only spouse or closely re­lated in­di­vid­u­als such as sib­lings and par­ents or chil­dren are nor­mally per­mit­ted by banks to get joint loans. So it is un­likely that un­mar­ried cou­ples or friends who want to jointly own a flat can get a home loan. In case they are joint owners they have to join as co-bor­rower for the loan and thus they can­not get an in­di­vid­ual loan in case of jointly owned prop­erty.

I have a prop­erty in Thane, which my brother wants to pur­chase. My brother wants to avail of hous­ing loan from the bank for the pur­chase of the prop­erty.Will the sale at­tract a cap­i­tal gains tax? Do we have to take permission of the so­ci­ety or in­form them of the sale? What is the pro­ce­dure for reg­is­tra­tion of the prop­erty in my brother’s name so that he has a clear ti­tle to the prop­erty? Will the bank give a loan on trans­ac­tion of the said prop­erty to my brother?

—Ankur Bhatt Sale trans­ac­tion with your brother will be treated as nor­mal sale trans­ac­tion and all the con­se­quences will fol­low so you will have to pay cap­i­tal gains tax if the sale value is higher than cost. You will have to take permission of the so­ci­ety and even get trans­fer recorded in the records of the so­ci­ety as well. The process for reg­is­tra­tion is also the same as those for nor­mal trans­fer trans­ac­tions. Your brother will have to pay stamp duty on the value of the prop­erty as per the agree­ment or stamp duty ready reck­oner ap­pli­ca­ble for your prop­erty, which­ever is higher.

You and your brother will have to go to the sub regis­trar’s of­fice for reg­is­tra­tion of the doc­u­ments. You will also have to file the rel­e­vant doc­u­ments with your so­ci­ety for record­ing the trans­fer of the prop­erty from your brother to you. The sale will be sub­ject to spe­cial scru­tiny as the trans­ac­tion in ques­tion will be be­tween close rel­a­tives and the lender will want to rule out a sham trans­ac­tion to raise money at low in­ter­est rates.

Harsh Roongta is CEO, Apna Paisa. He can be reached at ceo@ap­na­paisa.com

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