Mortgaging a Family-Built Flat

Introduction of Mortgage Flat

When a property is to be mortgage flat, this sometimes becomes very difficult, especially when that property is constructed by a relative. It tells the tale of one client who wished to save a flat built by his uncle but faced hurdles. Further in the chapter, it will describe how he manages to overcome the problems with some legal advice and a few simple steps.

Situation of Mortgage Flat

The client contacted a legal expert seeking assistance in mortgaging a flat that had been constructed by his uncle. The uncle was a builder and had constructed six flats on a piece of land he owned. The client intended to mortgage one of these flats in order to obtain a loan. However, the bank wanted to know when the property had been sold. Since the uncle constructed the flat rather than sell or buy it, there was no date of sale.

To clarify ownership of the flat, the bank has mandated that the sale date must be furnished. Without it, it appeared the mortgage would never be granted. The client had no idea what to do next and was frightened this might further delay his loan.

Solution of Mortgage Flat

The client decided now to seek legal help to carry on with the case towards successful closure. The attorney explained that while the sale date could ordinarily prove very critical, it is by no means the only means of establishing ownership of the flat. He produced alternative documentary evidence of ownership, in lieu of the sale date, as required by the bank.

The lawyer suggested:

1. Completion Certificate (CC): This is a document given by the local municipal authority stating that the construction was completed following the approved plans and cleared all legal and safety requirements.
2. Allocation Certificate: The uncle constructed the flat on his land; hence, the lawyer suggested the option to use an allocation certificate that will show that the flat was allocated to the client, hence indicating ownership.
3. Sale Date of the Land: Although there is no sale date for the flat, the lawyer suggested the sale date of the land where the flat was erected, which can be linked to the flat to prove ownership.

Even though the customer was uncertain if the bank would accept these alternative documents, the property lawyer assured him that banks are sometimes flexible in such matters, especially when the documents are valid and supported with legal advice.

Next Steps

The lawyer gave all the steps recommended with which the customer should act for the mortgage procedure:

1. Get permission from the municipal corporation: The lawyer advised the customer to go to the municipal corporation to obtain a title deed for the flat, as it would provide solid evidence of ownership.
2. Gather relevant documents: The customer was to be advised on gathering all relevant documents: completion certificate, allocation certificate, and sale date of the land, and thus submit these to the bank for the mortgage application.
3. Follow up with the bank: The lawyer recommended that the customer remain in regular contact with the bank to ensure that they were satisfied with the submitted documents and maintain clear communication with the bank to avert misunderstandings.
4. Obtain legal assistance: The lawyer indicated that he would be willing to assist the client in drafting any necessary affidavits or declarations to clarify how the flat was owned, thereby ensuring that the bank has the information that it requires to approve the loan.

Problems Encountered

The foremost problem encountered in this case was the requirement of a sale deed for the flat from the bank. Since the flat was a construction of the uncle and was not sold in a conventional way, no such deed with a date could be found at all. This was the initial stumbling block for the loan application, wherein some legal advice with a few alternative documents made things work out.

The other challenge was how long it would take to collect all the requisite documents, most notably the approvals of the municipal corporation. Following the advice of her lawyer, the client managed to expedite this process and avert major postponements.

Conclusion

Mortgaging a family-constructed property shouldn’t have to be a major hassle. While missing documentation like a sale date can be cause for concern, there are always other ways out there to prove you own something. In this case, the customer managed, through legal advice, to compile the required documents to carry on with the mortgage process. With enough fortitude and proficient advice, a mortgage loan could always be successfully obtained despite the property being constructed by a relative.