“Under the law, any developer who builds a housing company must enter into a written tripartite agreement with any buyer who has already purchased an apartment in the project or is about to buy a home,” says Vijay Gupta, CMD, Orris Infrastructures. “This agreement clarifies the status of all parties involved in real estate transactions and monitors all documents,” he says. The bank begins to pay the loan amount to the client on behalf of the borrower as soon as they have all signed the tripartite agreement. In such a situation, the bank did not guarantee the credit for the construction of housing by a material guarantee until the MS of such housing was established by the borrower in favour of the bank. This usually only happens after 18-20 months, the time it takes the client to execute the deed of sale of the apartment or property for the benefit of the borrower. In the event of bankruptcy of the client due to an excess of commitment to the real estate market or a slowdown in the markets, the bank may be without tangible security. This can harm the interests of the bank`s depositors. What are the main details mentioned in the tripartite agreement? A tripartite agreement signifies the role and responsibilities of all parties involved, with the exception of basic information about them. Why is a tripartite agreement important? This document defines the obligations and responsibilities of all parties to the purchase of real estate. What do tripartite agreements contain? Tripartite agreements should contain details of ownership and contain an appendix to all original documents. What type of real estate activity requires tripartite agreements? Tripartite agreements are usually signed for the purchase of units in projects under construction. “Tripartite agreements have been concluded to help buyers acquire real estate loans against the proposed purchase of the property. As the house/apartment is not yet in the client`s name up to the property, the client is included in the agreement with the bank,” says Rohan Bulchandani, co-founder and chairman, Real Estate Management Institute™ (REMI) and The Annet Group.
“In any event, home buyers shall receive a written guarantee with the agreement of the contracting authority. . . .