Charge created on constructed flat to secure debenture holders
Narayanan
(Querist) 09 September 2015
This query is : Resolved
Dear All,
I have booked an apartment in chennai. The Developer has created charge on the land in favour of Axis Trustees Services Limited to secure due repayment of principal amount along with interest to Debenture Holders and has registered the Debenture Trust Deed and Indenture of Mortgage with Sub Registrar of Assurances at Bandra, Mumbai.
In terms of the aforesaid Debenture Trust Deed,although the Debenture Trustees hold exclusive charge over the immovable property of the Developer, the Developer is free to sell his flats provided the sale of the flats is reported on a quarterly basis by the Developer within 45 days from the end of each quarter.
Also, in terms of the aforesaid Debenture Trust Deed, the Trustees may release the charge on the secured property to the extent it being in excess of the Minimum FACR after obtaining consent from the Majority Debenture Holders.
Since a charge is created on the property, is there any risk in purchasing this property. If so, what is the risk and what has to be done to avoid all future problems relating to charge created on the property. What documents pertaining to release of charge needs to collected from developer in order to obtain a clear title to the property and avoid future problems.
Regards
Narayanan
P. Venu
(Expert) 10 September 2015
Is this aspect mentioned in the sale deed?
Narayanan
(Querist) 10 September 2015
Yes, it is mentioned in the sale deed. Both of us (myself and developer) have signed the document but it is yet to get registered with SRO.
Narayanan
(Querist) 15 September 2015
can anyone suggest what needs to be done...
T. Kalaiselvan, Advocate
(Expert) 18 September 2015
The contents of the sale agreement as well as the contents of the documents mentioning creation of charge are to be seen for rendering a proper opinion, however a local lawyer well versed in the real estate aspects may be able to guide you properly on producing the relevant documents to him in person.
In your interest, it is advised to get proper legal opinion and if necessary a second opinion too before venturing into such huge investments which appears to have some inbuilt legal complications.
