If a builder get notice for bank for payment not being on time, do the owner of flats need to worry?

I own a flat in apartment of 30 flats of which 10 are sold.I got to know last week that bank gave a notice to builder for payment of remaining amount of the loan he had taken. Can you pls tell me if it can be a issue for buyers like me whose registration of the flat is already done. Awaiting a clear response eagerly. Thank you in advance.

3 Replies to “If a builder get notice for bank for payment not being on time, do the owner of flats need to worry?”

  1. I understand that your builder has availed a loan for building the apartment.

    For sanctioning the loan the bank takes the mortgage of the entire property ie the land and the apartment.

    As and when a flat is sold the builder pays the amount paid by you to the extent of loan outstanding on the flat and the bank releases its charge/ lien on that flat. The builder then registers the unencumbered flat to you.

    But a lot depends on the repayment conditions stipulated by the bank.

    You should check up whether your registration is free of bank’s charge.

    Only the builder has received the notice and you have not received any notice suggests that your registration is free of bank”s charge.

    However you may check up with the bank.

    Your sale deed may also throw some light on this aspect.

  2. Yes K.a above has explained well.

    When a builder takes project finance, he has to pay proportionate amount to bank while registering flats to the buyer and for which builder will obtain NOC ( No Objection Certificate ) for the particular flat in the name of particular purchaser and the Bank after getting the proportionate amount will release the flat from any further charges. This letter you have to get from he builder before registration.

    Ask for NOC & release of your flat from charges by bank from your builder. Bank can attach the flats for which such NOC is not given. Better talk to builder and also Bank for clarification.

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