sbi home loan - prior deed clarification(legal documents)
Guest
(Querist) 23 February 2015
This query is : Resolved
Hi Sir,
I am from Trivandrum Kerala and I am trying for a housing loan from SBI. I have purchased land a few years back from one person, which was originally 48cents. I have bought only 9cents it and another 2 plots of almost equal size were sold to two other people. The remaining is still with the owner.As per the given check list from SBI, I have to produce the prior deed which is still with the person who sold me the land.
I am seeking clarification on the following questions:-
1.Is there any legal obligation on the person who sold the land to produce this document to the purchaser whenever he needs it (eg:- for sale, for loan etc)
2.If there is no such obligation, whether the banks can ask for the original prior deed for verification?
3. Can I produce an attested copy of the prior deed from sub-registrar office instead of the original?
4.What exactly banks are looking for by seeing the original prior deed?
5. What if the person with this document is not available / out of station / not willing to produce this document?
Looking forward for your valuable advise.
regards
Praveen
Babu Narayanan
(Expert) 24 February 2015
The Banks normally insists prior title deeds for ruling out the existence of a prior mortgage/charge and also verifying the flow of title. In your case you have purchased only 9 cents out of 48 cents . In such case normally prior title deed will be with the holder of larger portion of land . If your title deed contains a statement about this fact then normally bank may accept certified/ attested xerox copy of the prior deed. However bank's may insist the verification such prior deed.
ajay sethi
(Expert) 24 February 2015
your sale deed would contain a clause that seller would produce originals for inspection when called for . request seller to produce original for inspection before bank officials . you can furnish certified copy of said document for bank records
Rajendra K Goyal
(Expert) 24 February 2015
1. This is procedural and necessary step to take credit decision by the Bank.
2. Bank may ask any relevant information it thinks fit to sanction the loan.
3. Yes, Bank may also ask for producing original for verification.
4. It is a part of steps to confirm regarding clear title on the land.
5. Bank may reject the loan proposal.
Kumar Doab
(Expert) 24 February 2015
The bank shall ask the borrower to deposit fee for legal opinion or obtain legal opinion from lawyer empaneled with bank and lawyer will fetch the encumbrance certificate, mutation record, to establish clear title and previous debt if any.......
As rightly opined make the seller agree to show the originals to bank,provide the copy to bank ( make the BM sign OSV in your presence), certified copy to you....
Dr J C Vashista
(Expert) 24 February 2015
The title of the property is to be verified by the banker before disbursement of loan and the sale deed shall have a clause for non-encumbrance as rightly opined by experts.
K.K.Ganguly
(Expert) 24 February 2015
1. The Bank is within its right to ask for showing the original Title Deed of the total property,
2. The reason for the Bank's such demand is to ensure that the earlier owner of the entire property did not deposit the said original Title Deed with any Bank for creating mortgage on the entire land including the portion what you have purchased and want to mortgage to take loan,
3. The lending Bank shall have to verify that your land which will be mortgaged with the Bank by you in case you are allowed the said loan, has not been already been mortgaged with any other Bank by its earlier owner.
Guest
(Querist) 24 February 2015
Thank you very much for clarifying my queries.
I understand that the legal panel has all rights to ask for original prior deed for verification, and all are pointing to the same reason for this - "the bank need to ensure that the earlier owner of the entire property did not deposit the said original Title Deed with any Bank for creating mortgage on the entire land including the portion what I have purchased"
I understand that this is a really valid point. But, I have some genuine doubts here
1. Even after such a verification by the bank's legal pancel is completed, earlier owner can use the said deed for creating mortgage for his own purpose.May be next day itself, he can applay for a loan or even after my loan is approved, he can generate mortgage using this original deed! In this case, what exactly is the legal panel ensuring by one time verification of that document?
2.What if the owner has already availed a loan using the title deed? Since he is still having the major portion of his land, I believe there is nothing preventing him from availing a loan using the same title deed. Who is ensuring he is "not creating mortgage on entire land including the portion that he has sold out"? Since he doesnt have any other documents, I believe he has to hand over this deed to the bank for his loan. Just because he sold a portion of his land, we cannot say that he cannot avail a loan for remaing land that he owns and produce the original document whenever the purchasers demand, right?
Thanks
Praveen
Guest
(Querist) 25 February 2015
reopening the thread
K.K.Ganguly
(Expert) 25 February 2015
1. If the oener if the property mortgages his entirre property after you mortgage a portion of it which you have purchsed, then the 2nd mortgage created after you mortgaged your portion of the property will be treated as illegal and bad mortgage,
2.Mortgaged property can nor be dealt by the mortgagor without the written consent of the mortgagee Bank. If the owner has mortgaged his entire property earlier, then he shall have to deposit the original title deed with the mortgagee Bank and in such case your said purchase of the part of the mortgaged property will be illegal. In fact your Bank wants to verify this aspect only.
T. Kalaiselvan, Advocate
(Expert) 26 February 2015
You are concerned about your loan alone so you may restrict your thoughts to your property alone. The insistence by bank to verify the parent title deed of the property is to confirm if the property now purchased by you is free from encumbrance or it is encumbered along with his property while it was not mutated before your purchase. therefore to verify the genuineness of your property, the verification of the parent deed is a routine formality. Once you start getting doubt on one subject and then on another after the previous is solved, there will be no end for your doubts and you may not be able to avail the intended/desired housing loan, better comply with the formalities properly.
Guest
(Querist) 26 February 2015
Thank you all for the valuable advises.I hope someday the formalities will become simpler and logical and helpful for the society
thanks
Praveen
K.K.Ganguly
(Expert) 27 February 2015
1. Where did you find the formalities complicated in the instant case?
2. Bank wanted to see the original title deed of the entire property to ensure that the property you are mortgaging is mortgageable and has not been mortgaged earlier,
3. It will save you from being cheated by the owner.
T. Kalaiselvan, Advocate
(Expert) 27 February 2015
I think all the experts have advised you better including the last piece of advise by expert Mr. Ganguly and this may make you understand the real situation.(?)
