Home Loans and Law for NRI’s
Home Loans and Law for NRI’s
By Vimal Punmiya, LLB (Gen.)
In a bid to have a cutting edge some known institutions have sanctioned loans to consumers who unfortunately have been cheated by builders. All consumers need to know relevant laws and their guidelines to avoid falling into squabbles with builders later. This certainly avoids dreams from turning into nightmares.
For the last five years it has become very easy to get finance or loans for buying homes almost anywhere in the country. On one hand it has helped the consumer to realise his dream much quickly as the banks and financial institutions do not ask to too many proofs or take more than ten days to clear applications. On the other hand this quick accessibility has created a fresh set of problems for the consumer and the banks. To offset competition banks have cut interest rates and tied up with builders to give better services. The danger mainly lies when the installments have been paid and the builder vanishes or gives away the home to other choice but to approach a lawyer.
Attorney Vimal Punmiya’s ‘Good Advice’ for NRIs is sure to help in the long run as plenty of loan schemes floating around are bound to confuse house-hunters. This is how they can protect their own interests.
Q. Banks have financed loans for buildings which have illegal FSI thereby abetting the Builder in an alleged nefarious activity. How can the consumer be protected under such circumstances ?
A. Under the above circumstances it is advisable for the consumer to go through the plan approved by the Municipal Authorities before purchasing the property. The consumer however has the option to move to court against the builder incase of buildings which have illegal FSI. It is advisable that a specific procedure by introduced for banks whereby they cannot sanction loans for buildings which have illegal FSI.
Q. Reputed financial institutions like HDC & ICICI have given loans to people wanting to live in controversial buildings. Should the finance company or the builder be responsible for clearance of all problems ?
A. The finance companies which gives loans to people are not responsible but the builder is responsible for the clearance of all problems in controversial buildings.
Q. What legalities will help the consumer to safeguard his interest when known companies indulge in malpractices ?
A. A person cannot get a title better than the one the previous owner has. Therefore the consumer before acquiring property should inquire regarding the reputation of the builder, BMC occupation certificate etc. If the above is done then the consumer can safeguard his interest against malpractices.
Q. Recently a lady slapped a case on a prominent builder Group for Rs. 35 lakhs. The case involved her paying all the installments due and later finding out that the flat she was to purchase is given to another party for a lesser amount. Such cases are few and infrequent but put fear in the minds of people.. How can the law help in such an unfortunate event especially to the NRI who does not even life her and may face an ugly situation like this ?
A. The aggrieved person can move to the consumer court for redressal of grievances.
Q. Host people fear that the law takes too long to give justice, In Such cases how long it would take to sort out the problem. How much money would be involved ot recover ?
An. In India it normally could take anytheirng form 10-15 years for justice to be done. Alternately the aggirved person faster. By doing this the cost can be reduced adrastrically. On does not need to employ an authorities copresentation in the case of consumer courts.
Q. Have you come across such a case and how can you enlighten readers to avoid being trapped in it ?
A. Recently introduced securitization and re-construction of financial assets and enforcement of security interest At, 2002 has provideded housing finance companies and banks the power to enforce the mortgage by giving defaulting borrowers a mere 60 days notice period. If a flat purchaser defaults in repayments of home loan, installments due, the financial institutions after giving 60 days notice can take possession of the asset including the right to transfer by way of lesse, assignment or sale for realizing the asset.
Q. Since home loan schemes have recently been introduced, do laws already exists to help consumers or they have yet to be made ?
A. As home loans schemes have recently been introduced there are no existing laws to help consumers and they have to be enacted by the parliament.
