Tripartite Agreement literally means an agreement between three people, The Buyer, The Bank and The Builder. The concept of Tripartite Agreement came about with the advent of banks lending aggressively for home loans for a buyer against his planned purchase of a home from a developer. The agreement contains all relevant information, such as the specifics of the property, carpet area (the actual living space that you get) and the amount of loan the bank has provided to the customer. It also mentions the possession date and specifies the penalty clause and its rate, if any. It lists out the obligations of all the three parties involved. Banks usually lend against a security, in this case the flat. However, since the flat is not in customer name until possession, the builder gets involved in the agreement with the bank.
Any property agreement mentions the specifics of a particular flat, apart from other details. When one shift to another project, that person books a new flat with different specifics and details. The loan amount for the new apartment may also vary in keeping with the area specifics of the new flat. Hence, the earlier agreement needs to change even if the builder and the bank you approach are the same. The new agreement will include the specifics of the new flats and the details of the new loan, apart from other information. But before the new agreement is finalised, any one would have to go through a flurry of paperwork.
One would have to get the loan approved once again since the bank will do its due diligence on the title of the property and even reevaluate the loan amount to be sanctioned in keeping with the size of the new flat. This would mean you collect all the documents, such as bank statements for the last six months, income proof and income-tax returns, any one submitted to get the first loan sanctioned and also pay a processing fee afresh.
In the wake of the recent delay in getting approvals, some builders gave home buyers the option to shift to another project it was developing. Buyers who agreed to shift had to sign the property agreement afresh and get a loan sanctioned all over again before getting into the new agreement.
Property acquisition process includes documentation which is surely the most crucial for a hassle-free transaction. In cases where a builder constructs a multistoried housing society and sells off several flats, it becomes more essential to keep a watchful eye on the documentation. Any developer who builds a housing society must enter into a written Tripartite Agreement with every buyer who has already purchased or is about to purchase a flat in that very society.
It is highly essential that the Tripartite Agreement contains the particulars of the property in question and also annex the given property documents. Tripartite Agreement should be stamped with the relevant stamp fee that depends on the State where the property is located. The Stamp fee varies in each State.
The Tripartite Agreement will have a declaration / representation from the developer or the seller stating that the property has no encumbrances of any manner or he has not entered into any new sale agreement for the same property with any other party. It also must be made clear whether the property in question is in possession of any other party apart from the seller. Any buyer should be aware that the builder / developer or the seller must include the applicable aspects before entering a Tripartite Agreement.