Deepesh Kodwani 04 September 2020

Bank valuation of affordable flat- resale from owner

I want to purchase an ready built apartment in gurgaon, built under affordable housing scheme. Flat had been purchased by current owner in 2016 at 22 Lacs from builder. Now i have applied in HDFC bank for the loan of 33 Lacs as market value of the flat reached at 40 Lacs in the open market. Bank has approved my loan on my income eligibility. But providing valuation of flat at 22 Lacs (allotment value) in spite of the fact, flat has completed 5 years under current owner. It was in under construction stage now ready to move. "Reason of lower valuation is applicable policy on affordable apartments", it is told by bank to me. Flat is going to complete lock in period of 1 year of resale restriction. Bank argues it will give same valuation even after completion of lock in. market value can be higher but for bank it will remain same.

Is bank right in its approach?

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4 Replies

Isaac Gabriel (Advocate) 05 September 2020

Yes. The scenario in flat system is unique and guide line value may not be static rather fall due to the age of the building.

Dr J C Vashista (Advocate) 05 September 2020

The facts posted is with respect to the procedure qua valuation of the flat for mortgage

No dispute is disclosed / involved in the facts posted by you for consideration and obligation of experts on this platform.

G.L.N. Prasad (Retired employee.) 05 September 2020

There are options. Try with other banks or NBFC that you can convince with your argument. A bank need not take entire valuation as per market value, as borrowers tend to escalate the costs to cover other ineligible expenditure of furniture etc. Focus on the actual amount needed for purchase, and your eligibility on your salary. The borrower can not demand a loan as per market value.

Deepesh Kodwani 06 September 2020

Thanks for giving your precious time.

Dispute is :

1. Bank representative promised to provide me 33 Lacs of loan saying same property valued for 39 Lacs six month before. Agreement value of property is 40 Lacs So i need 80% value for purchase.

2. Bank has sanctioned me full loan without checking property papers. If it was a rule they must told me before sanctioning loan. I have provided all documents at the time of loan application only.

3.Now after wasting my 1 month, they are not ready to check market value of the property which is above 40 Lacs. There is no rule or guideline on paper which can restrict any seller of the property to sell property with in any resale limit after one year of purchase.

4. Bank have no reference of any policy.

5. Bank charged my hefty processing fees.

It was not my fault . I have applied on the basis of information provided by bank official.

Now I have two questions:

1. What is the solution left with me?

2. Do affordable flats have no market value even if there is no policy or guideline is on the paper restricting resale value?