Loss of original documents by citibank...
PD
(Querist) 30 August 2011
This query is : Resolved
Dear Sir/Madam,
I'm considering buying a property from a Seller. I have been told by the Seller that they had a mortgage on the property from Citibank. Now Citibank is saying they have lost the original documents.
Here is what the bank has done to mitigate this problem:
1. Filed an FIR with the local police station
2. Have given an AD in the local newspaper
Copies are provided to Seller & me.
Seller has paid off the loan now.
I have been advised as follows:
1. File an AD in the local paper saying you are buying the property and if ANYONE has any claims they should notify us immediately.
2. Get the Seller to sign an Indemnity Bond, indemnifying the Buyer (me), registered in the local office. Seller has agreed to this as well.
3. Try to see if the bank will give an Indemnity Bond to the Seller. Citibank has REFUSED this.
I need help, whether I should get into this property or not. Please advice. I appreciate your opinion.
Regards.
PD
Sailesh Kumar Shah
(Expert) 30 August 2011
If you follow as advised, you can buy property.
PD
(Querist) 30 August 2011
Dear Mr. Shah, Thanks for your prompt response.
I checked with Axis Bank they said they will NOT give a loan on the property. I'm fine with that as I can buy it outright.
However, once I do this transaction and say I decide to sell this property. Can the new "Buyer" take a loan on it OR will they also face the same problem?
Regards,
PD
R.Ramachandran
(Expert) 30 August 2011
I will think hundred times before entering into the deal. There is no mechanism to find out whether the original deed has been given to some other banks / financial institutions to avail any loan / credit facilities. These things will not get recorded in the Registration Office. Therefore, the chances of double-game cannot be altogether ruled out. Advertisement in Newspapers etc., calling for objections are not fool-proof mechanism.
ajay sethi
(Expert) 30 August 2011
i agree with Mr ramchandran . original documents relating to chain of title is must . when banks are not willing to give you a loan on the property if tomorrow when you try to sell the property you will face many problems . avoid purchasing said propertyunless you are getting it at substantial discount to market rates
PD
(Querist) 30 August 2011
Dear Mr. Ramachandran,
Yes, I agree with you that there is NO way to find out if this is mortgaged or not.
However, to support his claim the Seller has agreed to sign an Indemnity Bond on a Stamp Paper and we will get it registered as well.
Does this make a difference? Or anyone can sign such a bond and go their merry way?
PD
(Querist) 30 August 2011
Dear Mr. Sethi,
No I'm not getting it at a substantial discount. I just liked the location and size. Budget-wise as well it was fitting the need.
Do you think after I purchase it, the next Buyer will also have issues with purchasing it from me? Or bank will have issues giving loan to the next Buyer?
Regards,
PD
PD
(Querist) 30 August 2011
Dear Mr. Ramachandran,
My question was, if the Seller signs this bond. Is he legally bound by it or it's just an eye-wash? Or simply put, can he go to jail once he signs this bond and does some fraud?
Regards,
PD
R.Ramachandran
(Expert) 30 August 2011
If he given an indemnity bond in the sale deed itself yes, he can be hauled up. But you will be spending better part of your life in court in enforcing that indemnity. In the civil liability, the question of going to jail does not arise.
PD
(Querist) 30 August 2011
Dear Experts,
Thought I'd share this with you and the forum.
I just spoke to Axis bank, they are saying they will NOT give loan on this property now or even in the future after "say" 2 or more sale transactions are done, since the papers are NOT there.
Regards,
PD
ajay sethi
(Expert) 30 August 2011
i reiterate dont go ahead with the deal .the next buyer will have problems in getting loan from bank and will also hesitate in purchasing property from you .
PD
(Querist) 30 August 2011
Dear Experts, Thank you, for all your advice.
