Loans/advances shall be sanctioned against Registered/Equitable Mortgage of the un-encumbered and SARFEASI compliant residential House/Flat or commercial or industrial property with a clear & marketable title standing in the name of the borrower entity or any third party.
Preferably the property shall be self-occupied or vacant, however, wherever the property to be mortgaged is leased/ rented out, but there is no underlying registered lease/rent deed and/or the lease/rental period is not more than 11 months, such properties can also be accepted. Further, in case of lease/ rent deed upto 11 months, the mortgagor (s) shall undertake not to extend the same.
Loans under this scheme can be granted against properties already charged/ mortgaged to our bank against other loan obligations also, however, in such cases, the concerned sanctioning authority shall ensure that:
The borrower entity in case of existing facility (ies) and fresh LAP facility is same.
Sufficient residual value is available to meet the stipulated security cover.
It satisfies all the other criterion laid down under the schemes.
In such cases residual value of the property may be arrived at after deducting 115% of BOS, in case of existing fully disbursed term loans & sanctioned limit (s) in case of term loans under disbursements & C/C accounts, from the Realizable value of the property. Residual Realizable value shall be used for calculation of MPBF under this scheme.
Note: Properties standing in the name of 3rd parties shall be totally unencumbered and these properties shall not be permitted to be mortgaged in facilities other than in the name of LAP borrower.
Lease hold properties can also be accepted as mortgage under the scheme subject to following conditions:-
i. Only those lease hold properties shall be eligible for financing under the scheme, where lessor is a Government agency.
ii. The lease deed should permit mortgage of the lease hold property. It should be ensured that lease deed does not contain any clause, which prohibits lessee from creation of mortgage in favour of bank.
iii. Permission for creation of Mortgage of leasehold property should be obtained from lessor, if required under lease.
iv. The unexpired period of lease should be at least 07 years more than the loan tenor.
v. While granting loan /limit against the mortgage of leasehold properties, the period of lease available, marketability of leasehold rights should be kept in view.
vi. In case the lease deed/allotment order contains any stipulation with respect to retention of premium by the lessor, the approved valuer shall deduct the amount of retention while arriving at realizable value of such property. Further, the concerned appraising/ sanctioning authority shall deduct the retention amount (if not deducted by the valuer) from the value of such property to arrive at actual realizable value and MPBF.
vii. Property shall be accepted only after obtaining title verification from concerned empanelled lawyer.