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Can your house be mortgaged without your knowledge?

IamCheated.com Research Team | September 09, 2019  2:48:pm

Can your house be mortgaged without your knowledge?

Recently, more than 200 families who live at Gardenia Gateway in Noida had received eviction notices from the Union Bank of India which asked them to vacate their homes. This was really a shock for the residents who were living at that society since 2015.  As per the statement of the bank, the developer (Gardenia India Ltd) had availed a loan of Rs 78.45 Crore in the year 2015 and till now no payment was made.

The notice sent by the bank stated that the developer had mortgaged the project for the loan and the bank has got all the rights to attach the property to recover the loan amount. But, the poor homebuyers had paid the entire amount without before moving to the apartments. 

After the bank faced a severe backlash from homebuyers, the eviction notices were immediately withdrawn. Even though homebuyers were safe, this incident has raised many questions. In this blog, we will discuss certain questions answered by "The Economic Times".

See Also: How Not To Get Cheated While Buying A Home?

Can builders mortgage the units which were already sold?

As per rules, builders have no right to mortgage the units which were already sold. As soon as the property is registered under the name of the homebuyers at the sub-registrar’s office, the builder's authority over the unit ceases. The homebuyer will become the real owner of the property as soon as the registration and stamp duty charges are paid to the government authorities.

So, the builder won't be able to mortgage the units sold to the homebuyers. He can mortgage only the unsold units in the project. Units already sold or mortgaged cannot be mortgaged again.

In case the builder has to sell the units, he must first settle the loan and obtain the NOC (no objection certificate) from the bank.

How to make sure that the builder is not cheating you?

Before you buy a house, make sure to do a thorough background check on the builder. You must identify if the builder has taken a loan and what he has mortgaged against it; on the Registrar of Companies, ROC, website.

There is also a way to buy the house even if it has been mortgaged against a loan by the builder. All you must do is ask the builder for the bank account details from where the builder has taken a loan and pay the EMIs to that account. In such cases, it is advisable for homebuyers to ask the builder for a NOC from the bank.

See Also: Things To Check Before Buying A Home

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