A lot of paperwork is involved during the completion of the home buying process and one out of many important documents is the Tripartite Agreement. A home buyer must ask for this legal document while buying a home. However, if you wonder what is a tripartite Agreement and its significance, then this blog is a must-read:
What is a Tripartite Agreement?
An agreement in which the name of all three parties are mentioned. The three parties included in this agreement are buyer, seller and the bank or the financial institution. The motive behind preparing tripartite Agreement is that the property is not registered in the name of the home buyer but he/she is required to avail home loan to purchase the same. In this scenario, the bank lists developer as the property owner, so that home loan can be sanctioned in the minimum time possible.
Tripartite Agreement for Leased Property:
In this scenario, the Tripartite Agreement is made in the name of the lender, owner and the tenant. According to this tripartite Agreement, if the owner is found defaulter in the payment of loan then the lender takes over as the new owner. After which the Tenant has no other option but to accept the lender as the new owner.
However, the new owner cannot amend any rules or clauses for the tenant. He/she has to abide by the predetermined rules.
How Tripartite Agreement Works:
The experts explain this legal document as the base for home buyers to avail home loan from financial institutions or banks. As the law prescribes, the developer of the housing society from which you are purchasing a residential unit is required to be named in this Agreement. This document helps the concerned authority to keep a tab on the real estate transaction that is being carried out between the buyer and the seller.
List of Required Details for Tripartite Agreement
Like any other legal document, the making of a tripartite Agreement also require details like:
The purpose of obtaining a Tripartite Agreement is to make each party responsible for selling/buying of the particular property or the residential unit. The buyer must emphasize on receiving this legal document at the time of purchasing a property as it comes handy at the time of resale.