I am selling my flat. My buyer has applied for a loan in SBI bank. He says I have to transfer the property in his name for the bank to release cheque. Is it true?

Yes, it is true

Before covid-19, bank's representative personally witnesses deed registration at sub-registrar office. Bank’s representative collects title documents and handover cheque immediately at sub-registrar office itself.

Now, most of the banks are giving NOC to exempt personal presence at sub-registrar offices under section 88 of the Registration Act. (We encircled section 88 in below NOC for your reference).

With above NOC, bank handover MODT to buyer. The MODT looks like below image.

The buyer should register the sale deed & MODT at sub-registrar office. Immediately after the registration, buyer should handover title documents to bank, title documents include:

• Registered Sale deed
• Registered MODT
• Encumbrance Certificate
• Parent deed
• Tax Paid receipt
• Khata
• and any other documents pertaining to property (like NOC from society, payment receipt, utility bills, etc.…)

After the handover of above title documents, bank handover cheque to seller.

From the seller's perspective, follow the below process

• At the time of sale agreement signing, seller may collect at least 20% of selling price as down payment from buyer
• Bank should inform seller that cheque is ready, some banks may share the cheque image via email or you may visit the bank personally and verify the cheque physically (Don’t believe verbal confirmation from bank representative or buyer, make sure that you see cheque image or physically verify the cheque)
• Upon seeing the cheque, seller gives registration date to buyer
• Seller and buyer register the Sale Deed
• Immediately after the registration, buyer should visit the bank and handover title documents. Seller collects the cheque from bank.

As a precautionary measure, Incorporate following clauses in sale deed:

• Mentioned all financial transaction details, including the cheque number which the bank will handover
• This sale deed becomes void if seller has not realized the full and final settlement.
• Possession of property will be handed over after the realization of full and final settlement. Till then possession remains with seller
• In the event of aforesaid termination, buyer should execute cancellation agreement with seller and all expenses will be borne by buyer. On failure thereof, the said expenses can be recovered from the purchase money so far paid by buyer.

All the best for your sale!

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