Call upon builder to delete the clause or put a cap of 5 per cent increase in price of flat
if however you have signed the agreement it is binding upon you
Tripartite agreement clause
Tripartite agreement has a clause that "if there is any increase or escalation in price of the said flat, the same shall be borne by the Borrower without any reference to bank. And until such payment is made to the Builder, the bank has the right to suspend disbursal." The sale agreement however says the price is free from escalation. We're worried that this clause in Tripartite agreement will give free hand to Builder to rise price and bank will stop disbursal in that case until the payment is made. Though sale agreement says the price is free from escalation. Tripartite agreement is signed from our side and bank but not Builder and not yet taken disbursal as home loan process not completed. We want to get this clause in Tripartite agreement removed. How to go about it now?
Asked 10 months ago in Civil Law
First answer received in 10 minutes.
Lawyers are available now to answer your questions.
8 Answers
Dear client, if the tripartite agreement is to be valid it must be signed by all three parties. Here in your case as you said the builder hasn't signed this agreement, it cant be valid. So, you can re-negotiate and can change the terms of the agreement.
And as per sale agreement the price is free from escalation then this clause in the tripartite agreement would be contradictory.
Therefore, negotiate with the other parties and remove this clause from the tripartite agreement.
The tripartite agreement can be altered suiting to your convenience in this aspect citing that this clause is not acceptable owing to the clause 'price is free from escalation' found in the sale agreement.
The issue is between the agreement holder and the new buyer entering into the picture hence don't allow the builder to dominate on such aspects.
This clause is contrary to sale agreement. this is mode of cheating by builder. Refuse stay away. Y you signed.
That clause itself is illegal as the agreed price cannot vary once fixed by the builder
Thank you, yes the clause is loosely worded the Builder would misuse. The bank didn't agree to remove the clause and we'd asked the bank to put further processing on hold. The only option we have is to not to go ahead further and not take disbursal. - How do I check whether the bank in its policies governing tripartite agreement allow these clauses which would potentially trap the Borrower? - Still exploring whether there would be any other option such as writing to the banks complaints department who can evaluate the clause. The manager however wasn't helpful nor we think the manager would address the issue by removing the clause.
Asked 10 months ago
Every agreement is vetted by legal department of bank
bank advocate must have approved the clauses in tripartite agreement
don’t take disbursal of loan
You can decide whether to go for loan or skip it.
You can even think about availing loan with some other bank which would be flexible with the clauses.
It is again your decision that if the bank is not inclined to remove the clause, whether to go ahead or not.
You can write to banking ombudsman or approach consumer court for redressal