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Debt ridden property to be sold while documents are with the lender
08-Mar-2023 (In Property Law)
While a property is in state of pledged with bank or lender, is it possible that the said property can be sold later, to third person who is, knowing all the fact, ready to take up the offer along with the seller's debt liability on the property? Is it legally valid that doing like that?, because the documents is with lender. So that...the property owner would be able to relieve from all his debt and the buyer
If the new buyer takes a loan to buy this property there is a provision for take over loan from the bank. Only thing is that it should be mentioned in the sale deed. Otherwise the seller has to clear the debt and get the documents and then only sale can be done.
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Adv. G. Asok
Chennai | 200+ Answers
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First you have to inform the lender about this transaction. Anyway for registration you will need the original documents and clear encumbrance certificate. If the lending is legal there will be mortgage deed which will reflect in the encumbrance certificate. So it's better to get a consent from the previous lender
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Adv. R Aneesan
Chennai | 25+ Answers
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Written permission from the lender for sale of the mortgaged property is necessary. The lender may stipulate a condition that before execution and registration of the sale deed, the existing loan shall be cleared in full.
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Adv. Swaminathan Neelakantan
Coimbatore | 400+ Answers
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