All you need to Know about Tripartite Agreement
- by HOME ONLINE
- on 09/05/2017
- at 9:10 AM
The tripartite agreement clarifies the role of all the parties involved in a property transaction and keeps a watch on all the documents. It usually says that if the borrower fails to pay or break the non-payment clause of the agreement, then the lender or the mortgager will own the property. The new owner cannot change any provisions or clauses. Each party needs to have a copy of the agreement.
The agreement should state that the property has a clear title and represents the seller and the developer. It should clearly state that the builder has not entered into any new agreement for that property with any other party. It should also clearly mentions liabilities of the developer to construct the building as per the sanctioned plan and specifications by the local authority.
But how do these agreements work?
As per the experts, tripartite agreements have been established in order to assist buyers to avail loan from banks for making a planned purchase of a property from a developer or builder. According to the law, any builder who is developing a housing society needs to enter into a tripartite agreement with a buyer who is interested in buying a property or have already purchased a flat in that project.
The agreement should comprise of all the particulars subject to the property, annexure of all the original documents related to the property. It needs to properly stamp with respect to the state of the property located. The details that should be mentioned in the tripartite agreement are: the parties involved in the agreement, objective, possession date, construction details-its stages and progress, rights and remedies, legal norms, borrower’s, bank’s or lender’s or developer’s perspective, final selling price, interest rate, EMI details, as well as details of penalty if the booking gets cancelled.