Here is a good news about home loan buyers in India .
Reserve Bank of India has recent passed a directive on disclosure of loans taken on a property by builders .
This directive will help the consumers in knowing the risk associated with the property they are buying. It enforces that a builder/developer as well as the bank granting them loans need to disclose it openly where in .
- The mortgage , lien or any liability on the property under development should be publish clearly in the advertisements .
- The same should be published clearly on the project booklets and in news papers .
- The builder need to take NOC from the lender-Bank before selling the houses .
- Banks in India are advised to enforce this .
I am copying the exact lines from RBI site .
Link : http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=5233
Ref No : RBI/2009-10/131 DBOD.No. Dir (Hsg). BC.31/ 08.12.001/2009-10
Date : 27 Aug 2009 .
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3. Keeping in view the above, while granting finance to specific housing / development projects, banks are advised to stipulate as a part of the terms and conditions that:
(i) the builder / developer / company would disclose in the Pamphlets / Brochures etc., the name(s) of the bank(s) to which the property is mortgaged.
(ii) the builder / developer / company would append the information relating to mortgage while publishing advertisement of a particular scheme in newspapers / magazines etc.
(iii) the builder / developer / company would indicate in their pamphlets / brochures, that they would provide No Objection Certificate (NOC) / permission of the mortgagee bank for sale of flats / property, if required.
4. Banks are also advised to ensure compliance of the above terms and conditions and funds should not be released unless the builder/developer/company fulfils the above requirements.
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While its a matter of research how many small to medium builders take commercial loans from Banks this directive does take the step in right direction . We need to see how this directive plays out , gets followed in real life . How it affects home loans, prices and stocks of real estate companies .
I also wonder what and how common home buyer will use these disclosures . or will we have to file RTI complaints 🙂 .
Lets see , for now lets cheer this directive .
And before I sign off , I found another link where the site says that the some Mr “Rajendra J Thacker” is the person who filed the case in Mumbai HC . http://www.karmayog.org/messages/message.aspx?id=1223 .