In the Indian real estate sector, a tripartite agreement is an agreement between three parties – The Buyer, The Bank and The Seller/Developer. The tripartite agreement lists the commitments made by the three parties. This agreement contains all the details of the mortgage for the house/apartment, the rights and commitments of all parties include the property specifications, the carpet area and all details regarding the loan/financing of the property, the date of ownership of the property and the details of the penalty clause. Tripartite agreements have been reached to help buyers acquire home loans against the proposed purchase of the property. As the house/apartment is not yet in the client`s name until the property, the owner is included in the contract with the bank. The situation is somewhat different in the development of the tripartite agreement under industrial leasing. Three parties are involved, and they are the owners, the lender and the tenant. According to this agreement, if the owner of the building attempts to violate the unpaid clause of the real estate credit agreement, the bank, aka the lender, enters an active role to automatically become the new owner. With the change of ownership, the tenant must accept the new owner and the new owner has no right to reform the pre-defined clauses in the tripartite contract. In some cases, tripartite agreements may cover the owner of the land, the architect or architect and the contractor.
These agreements are in essence “not a fault” of agreements in which all parties agree to correct their errors or negligences and not to make other parties liable for unfaithful omissions or errors. To avoid errors and delays, they often contain a detailed quality plan and determine when and where regular meetings will take place between the parties. “In the leasing sector, tripartite agreements can be made between the lender, the owner/borrower and the tenant. As a general rule, these agreements stipulate that if the owner/borrower violates the non-payment clause of the loan agreement, the lender/lender becomes the new owner of the property. In addition, tenants must accept the mortgage lender as their new owner. The agreement also prevents the new owner from amending tenant clauses or provisions,” Bulchandani adds. According to experts, tripartite agreements have been reached to help buyers acquire funds from banks against the proposed purchase of a home from a developer. This agreement also helps the bank to track all securities relating to the property and can also have transactions between the buyer and seller recorded. The tripartite agreement should have the stamp of the state in which the property is located, as well as information relating to the property and the original documents associated with it.
A tripartite agreement is the most important legal document involving the buyer, the bank and the seller. This is the document that is needed when a buyer opts for a home loan to buy a home in a basic project. “Tripartite agreements have been reached to help buyers acquire home loans against the proposed purchase of the property. As the house/apartment is not yet in the client`s name, the owner is included in the agreement with the bank,” said Rohan Bulchandani, co-founder and president of the Real Estate Management Institute™ (REMI) and Annet Group.