For loan, sign affidavit that house is legal: HC

October 13, 2006	(Be the first to rate this story!)  Loading ...
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NEW DELHI: Henceforth, housing loans would be given only when an affidavit or an undertaking is furnished by the applicant with details about the legal status of the property or the land for which loan is being taken. In an attempt to save innocent buyers from purchasing illegal and unauthorised structures, the Delhi High Court today ordered the Reserve Bank of India (RBI) to issue directions to all the banks to this effect.

The two-member Bench headed by acting chief justice Vijender Jain, accepting the recommendation of the HC-appointed Monitoring Committee also ruled, “For a bank loan given for a new construction, a condition should be laid for deposit of copy of completion certificate with the bank after the construction is over within two months, failing which loan would be cancelled.”

The directions were issued while the HC was hearing the case of unauthorised structures in the capital. It was indicated that henceforth it shall be the duty of the banks to obtain affidavits from the loanees that the property for which the loan is sought conforms to the sanctioned layout plan.

To put it simply, a former IPS officer who’s one of the committee members said, “The onus would now be on individuals seeking loans to give a sworn affidavit that the property which they seek to purchase is authorised and meets the original sanctioned layout plan.”

The Court ruled that in all those housing units or houses with any unauthorised structures, banks should not give any loans so that people are discouraged from buying such properties. The direction will have wide-reaching ramifications and comes at a time when RBI has increased the risk weightage for the sector.

But just how practical this will turn out to be remains to be seen, particularly in the capital where an estimated 70 per cent of all properties violate sanctioned layout norms and where the key document — the completion certificate — doesn’t exist.

Source: http://www.indianexpress.com/story/14550.html

News Published Under:   Real Estate India, Delhi |

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