The Tripartite Agreement is important for a home buyer who plans to buy an under constructional residential property while availing a home loan from the bank. Hence, you must know about how to create this agreement and how many parties are included in it.
- What is Tripartite Agreement?
This is a lawful deed that mainly involves three parties that are the buyer, seller and the financial lender alias the bank. The home loan sanction procedure becomes easier if the home buyer has a Tripartite Agreement for an under-construction property which he/she is willing to buy. This agreement is important because the property is not transferred in the name of the home buyer till its completion or till possession. Therefore, it is essential to add a seller into the Tripartite agreement.
- Significance of Tripartite Agreement:
Unlike the above-mentioned case, the Tripartite Agreement draft is different in case of the Industry leasing. In this case, the three parties involved in an agreement are the owner, lender and the tenant. As per the agreement here, the bank replaces the ownership title of the property if the actual property owner tries to breach the non-payable clause of the home loan agreement and then the tenant has to accept bank as the owner of the property. But, the bank alias new owner of the property is not rightful to change the predefined clauses in the Tripartite agreement.
- Need of Tripartite Agreement:
The Tripartite agreement is required to bring clarity in the buying/selling process. Hence, the home buyer seeking bank approval for a home loan application must get this agreement while adding the developer/seller as a party.
Another reason to have a Tripartite agreement is to track submission of all papers related to property and also to keep an eye on the transactions that took place between the buyer and the seller. The stamp of the State should be there on the Tripartite agreement in which the property falls along with the original documents related to the property.
- Important Documents for Tripartite Agreement:
All the below-mentioned documents important for making a Tripartite Agreement:
- The parties to the agreement
- The objective of the agreement
- Rights and remedies of the parties
- Legal mechanics
- The borrower’s perspective
- The developer’s perspective
- Bank/lender’s perspective
- Agreed selling price
- Possession Date
- Progress details of Construction
- Interest rate as applicable
- Equal monthly installment details
- Agreed common area amenities
- Penalty details if the booking is cancelled
This legal document should clearly mention the seller as a party with a clear title and a declaration should be there stating that this specific housing unit is not sold to any other person and the unit is structured according to the layout sanctioned by the Authority.