Property registration policy

Question

My mom owns a property at Tanjore which is not ancestral instead purchased by Dad's self earning and registered on my mom's name. Recently they built a house on that land getting housing loan from SBI Thanjavur, putting my mom owner of the land as the primary applicant and my brother as the secondary applicant. Loan amount of 30 lakhs with monthly EMI 35000 for 15 years. After paying 5 installments my brother refused to pay the installments and insisted my parents to register the property on his name which my parents don't want to do. My parents are retired people and so I decided to take up the loan and close it but SBI refuse to change the second owner.

So I partially closed the amount for 12 lakhs by selling my jewels and savings and wish to apply for the loan for the rest of the amount through HDFC bank. Also my parents are willing to sell the property to me as I am paying the complete loan. But HDFC refuse to accept the sale deed between mother and daughter as Bank norms won't accept this kind of sale deed.

Please guide me how to get a bank loan for the rest of the housing loan and what kind of a deed or agreement my parents should do so that I can acquire that property without any legal issue.

Answer 1

Legal ownership of the property is not something that can be changed by the bank without the consent of all the owners, and regardless of who paid for the property or who has been making the payments on the loan, the ownership remains the same; joint ownership by your parents (or maybe just your mother since you say she owned the land and is the primary applicant) and your brother (or at least that is how I understand the meaning of "secondary applicant", a co-owner whose name is listed immediately after the primary applicant). Your parents (or mother) might transfer their "share" of the property to you via sale deed or gift deed) but they (or you) cannot remove your brother as a co-owner unless he consents to be removed. Since he wants to own the property outright, he is unlikely to agree to this.

More to the point, that 12 lakhs that you already paid to SBI to pay off the loan from SBI is a payment on a mortgage on which the borrowers are your parents and your brother, and they all benefit from this early payment while you don't. SBI, quite correctly, doesn't care who paid the 12 lakhs, and the payment does not entitle you to a share of the property. HDFC is quite correct in refusing to lend you 18 lakhs (or whatever the loan balance is as of now) because you are not a co-owner of the property that will be mortgaged as surety for the loan, and should you default on the proposed loan (i.e. refuse to make any more payments, just like your brother did), HDFC will not be entitled to seize the property to get its money back because it has no claim against the owners of the property. In short, the proposed loan from HDFC (which will pay off SBI completely) will be an unnsecured loan to you which they don't want to lend you.

Before proceeding further, you should check exactly who are the owners of the property (both house and land, separately) in question and whether the joint ownership is listed as "joint tenancy with right of survivorship" or as "tenancy in common" (possibly with percentage ownership: if none. equal shares are presumed). In the latter (less common) case, your parents can gift you their shares; in the former (more common) case, the only way to dissolve the joint tenancy is by "selling" the property to a new owner (or new set of joint owners), and this "sale" requires the consent of all current co-owners of the property. So, you by yourself (or you jointly with your parents) could buy the property from the current joint owners (your parents and brother) if your brother is willing to sell. He will probably want a lot more than the INR 35,000 x 6 = 2.1 lakhs that he has put into paying off the current mortgage.