What Should A Homebuyer Do, If His Bank Is Caught In A Crisis?
There have been scores of homebuyers, who have had to suffer prolonged delays in getting possession of their homes, after diligently honouring their end of the deal, owing to mismanagement on the part of developers. In such a situation, nothing could be worse for a buyer, than finding out that the financial health of his lender is also questionable. What should a homebuyer do, in such a scenario?
“In 2015, right before the Amrapali saga started unfolding, I paid them a token amount of Rs 2 lakhs and booked a flat in one of their Noida projects. Before the deal could reach any advanced level, it was out in the open that the builder was in deep trouble. I made peace with the fact that I had lost my money and made no attempt to recover it. The very thought of making rounds to various offices and haggling with people concerned, was scary,” shares Ananya Shrivastatva, a government teacher who currently lives on rent with her family in Ghaziabad.
Not everyone may have the option to let things go. Buyers of resale flats have to deposit the original sale deed and other property papers with the bank, in case they are taking a home loan. In the case of under-construction properties, financial institutions keep key papers, including the builder-buyer agreement. This means that a buyer, whose builder is deep neck in trouble and whose bank is not doing well, is practically in danger of losing the property papers which he may not possess for a long time to come.
“Irrespective of whether they want to exit the project or stay with it, buyers have to patiently wait till a resolution plan is worked out. After waiting for their homes for several years, buyers of Jaypee, Unitech and Amraplai projects, now have to wait for the judicial system to work out a plan. Each of the cases are pending for two years now and the final resolution plan is far from seeing the light of the day,” points out Brajesh Mishra, a Gurugram-based lawyer who practices property law. However, buyers unwilling to wait for a resolution plan in case their bank has entered a crisis phase, could consider switching their loan to another lender immediately, says Mishra.
“In such a case, the buyer can get the loan refinanced. This makes sense at various levels. It is important to get back the original property papers from the possession of the bank that is headed towards trouble. Also, interest rates are quite low currently. This will also provide the borrower with some relief, in the form of reduced EMI burden,” Mishra adds.
With the RBI coming back as the regulator of NBFCs, stability is likely to prevail in future. However, the long wait could prove to be extremely taxing on individual borrowers.