Tripartite Agreement Property Development
At the end of the agreement, the borrower must repay the amount of the loan at interest rates. The amount can be repaid in installments or lump sums, depending on what has been agreed by mutual agreement between the parties in the agreement. A tripartite agreement is usually reached between a buyer, a seller and a bank when the buyer intends to borrow for a basic property. Since the buyer is not in possession of the property, the name of the owner must therefore be part of the contract. In case of late payment of the buyer, the title is transferred to the bank. The above list is not exhaustive and there are various other contracts executed by real estate or residential developers and financiers. Whenever the developer needs money, they take the help of lenders, investors, buyers, financiers who help them financially, in exchange for a few counterparties. As a general rule, contracts are signed and executed in all stores, so that all rights, obligations can be invoked in one place and, in case of dispute or disagreement, the agreement may be returned by the adjudicator authority or the court. It is only after the execution of the loan agreement that the money is made available by the lender and in case of non-repayment of the money; the guarantee held by the lender in the form of a mortgage is considered a payment. «In the leasing sector, tripartite agreements can be made between the lender, the owner/borrower and the tenant. As a general rule, these agreements stipulate that if the owner/borrower violates the non-payment clause of the loan agreement, the lender/lender becomes the new owner of the property. In addition, tenants must accept the mortgage lender as their new owner. The agreement also prevents the new owner from amending tenant clauses or provisions,» Bulchandani adds.
It is the borrower`s duty to ensure that the loan is repaid at the same time as the principal and interest, in accordance with the payment plan. The agreement clearly states that if the borrower defaults on the loan repayment, the property will be transferred to the bank. For the borrower, the violation of his rights and obligations results in the loss of ownership of the property. This agreement also helps the bank to track all securities relating to the property and can also have transactions between the buyer and seller recorded. The tripartite agreement should have the stamp of the state in which the property is located, as well as information relating to the property and the original documents associated with it. The option contract includes, among other things, the location of the property, the consideration to be paid by the buyer to the seller, the duration of the contract, the purchase price, which constitutes a delay/violation, the consequence of a delay/violation, the applicable legislation, which is covered for all acts by the party of which party, etc. It is an obligation for the developer to report, in the tripartite agreement, that the property has a clear title. In addition, it should also be noted that the developer has not entered into any other or new agreement regarding the sale of this property with another party.