Generally, all agreements have two parties but there are some occasions in which a tripartite agreement becomes necessary. A tripartite agreement is the principal legal document involving the buyer, bank, and seller.
It is an essential document when a buyer prefers a home loan to buy a house in an under-construction project. Tripartite agreements have been placed to support buyers with obtaining loans for properties against a planned purchase of a property.
Find out more and everything you need to know about this agreement by going through this post.
Tripartite agreement – as the name suggests is an agreement involving three parties.
This agreement is done between the seller of a property, the housing society of which the property is a part of and the buyer.
Tripartite becomes very useful when a property has any encumbrance (claim against a property by a third-party) like a mortgage.
Clear title: The agreement should state that the developer or seller doesn’t have any legal liability with respect to the property.
The agreement should mention that the seller is not cracking multiple deals for the same property.
No, a tripartite agreement is not mandated by law but in order to ensure that there is no scope of future conflict between the involved parties, this agreement is brought into picture.
Tripartite agreements have been established to help buyers with obtaining finance from banks against a plan to buy a home from a developer. The agreement clarifies the status of all parties involved in real estate transactions and monitors all documents.
With regards to home loan, a tripartite agreement usually occurs during the construction phase of a property to obtain a home loan.
The agreement clarifies the status of all parties involved in real estate transactions and monitors all documents.
It mentions the construction phase, the final selling price, agreed on common area amenities, possession date, EMI details, interest rate, penalty details in case the booking is cancelled, and loan payment schedule.
Since tripartite agreement clearly brings out all the legal status of a property on paper, it becomes easier for banks to approve loans.
Such agreements can be really helpful for you as a buyer to shield yourself from fraudulent activities, but if not done right it can get you into further complications. Terms and conditions mentioned in such agreements could be complex and therefore, might be difficult to understand.
It is useful only if it’s carried out under proper guidance. Connect with Roodland to make all your real estate experiences easier and hassle-free.