Q. I am keen to purchase the ground floor of a bungalow. This bungalow is jointly owned by three siblings who have undivided share in it. Are they required to carry out partition of the bungalow before I buy the floor? (Nilanjan Roy)

Ans. Since this bungalow is jointly owned by three individuals having undivided share in the property, each individual’s current share in the bungalow (e.g. which floor/portion is owned by which sibling) is not clearly demarcated. As you are purchasing only the ground floor from all three siblings, such sale can be conducted by execution of sale deed by all three siblings in your favour. It is not necessary to wait for the property to first be partitioned before buying it.

Q. I live in a rented accommodation whose lease expires next month. During the lease expires next month. During the lease, I installed many fixtures at my own cost such as geyser, shower, curtain rods, etc. Can I take these along with me when the lease ends? (Huma Saikiya)

Ans. As you are required to hand over possession of the property in the state in which the lessor had leased it to you, these fixtures/fittings may be removed before handing over possession, provided their removal does not damage the property.

Q. I wish to write my will for distributing my moveable and immoveable property upon my death. Do I need to pay registration fee on my will?
(S Rao)

Ans. No stamp duty is payable on a will and it does not require to be compulsorily registered. However, the Government of Delhi recently issued a circular by which beneficiaries inheriting immoveable property through an unregistered will are required to submit a succession certificate/probate order from a competent civil court for the purpose of carrying out mutation of property records in their favour. On the other hand, beneficiaries inheriting immoveable property through a registered will are not required to obtain such succession certificate/probate order for mutation in Municipal Corporation of Delhi (MCD) records.

Registering your will in your lifetime helps quicken the process of mutation of inherited properties for inherited properties for your beneficiaries.

LOAN RELATED FAQs

Q. I have applied for a loan of Rs.35 lakh along with my brother who is the co-owner and co-borrower for the purchase of a new constructed house. I am paying the EMIs from my bank account. Can we both claim IT benefit under this situation and if so how?

Ans. You both can claim the deduction for the home loan repayments in the ratio of your respective shares in the loan. Tax deduction benefits will be available for each of you separately under Section 24 (interest payable on the loan) limited to Rs. 1.5 lakh for each of you if the property is self-occupied and under Section 80C, limited to the extent of Rs.1 lakh for each of you (for the principal repaid) in the proportion of your share in the loan. The deductions can be claimed by both if both are paying the EMI. In case only you are paying the EMI, you should recover your brother’s share from him. It is advisable to enter into an agreement or memorandum of understanding specifying the share in the loan and share in the property.

Q. Currently my husband and I have a joint home loan for Rs.7.75 lakh. Our EMI works out to be Rs.8, 000 per month. I’m looking for a second home loan under my name. Does Indian Banking law allow a person to have two home loans under their name?

Q. Under the provision of the Income Tax Act as well under banking laws, there is no restriction as to how many properties you can take a housing loan for or on the number of properties a person can own. The loan on the second property will be available provided your income is sufficient to justify repayment of both loans. The tax treatment is also different where you own more than one property. See www.apnapaisa.com/l/home-loan-india/deductiononmorethanoneproperty.html for details of the tax implications of owning more than one property.

Q. Can a bank help me get 100% loan for the home? Or some option because I can’t pay even 20% of the cost of the home.

Ans. Banks can finance only up to 80% of the property cost. The amount of loan will also depend on your annual income. If you are less than 40 years of age you should be eligible for around 4-4.5 times of your gross annual income as loan if you have no other loan to service for the margin money, you can use the balance from your savings or proceeds of the investments sold. In case arranging the funds for down payment is still difficult, you can look at withdrawing from your employee provident fund (if eligible) or look for friendly loans for your family members/ friends. Else, you can look for secured loans against tangible movable security such as jewelry, NSC, bonds, shares, units of mutual funds, or life insurance policy with high surrender value. As a last resort, you could look at an unsecured personal loan.

What is the process to resell a flat? I have bought an under-construction flat and have taken a home loan from a leading lender.

Yes, you can sell the apartment, but you will need the lender’s consent. This consent letter will provide the amount, on payment of which the outstanding loan liability will stand discharged. This amount includes the prepayment charge, if any, chargeable by your lender and should list the documents held by them. This amount mentioned is calculated as on a future date, to enable time for you to arrange the payment from the buyer. After the payment of all dues, the lender will return your original documents and issue a loan closure letter.

Please make sure you get the no-dues certificate to obviate any issues in the future. The buyer can make payment of the balance on receipt of the original documents from the bank. Since the flat is under construction you also require a NOC from the builder.

Thanking of buying a house?

When? You should buy a home as soon as you can afford it, or when your home loan is approved. Ask yourself: Are property prices and interest rate amenable?
If buying for investment: From an investment point of view, buying a house is likened to buying gold. Real estate has given very good returns, if held for long period of time.
Financial security: Remember investment in property needs time to pay good returns. Ask yourself if you will be able to keep the property long enough.
Applying for a home loan: Make a personal evaluation. If you are a frequent job-hopper, or in poor health, set your career in order before applying.
Peripheral expenses: With a real estate broker, you will pay him a fee once the deal is finalized. There are also various legal formalities to consider.
ADJUSTED GROSS INCOME:

Total rental income of a property at full capacity minus amounts that cannot be collected on account of vacancies and other reasons.

AFFIDAVIT:

A statement or declaration made in writing under oath before a competent (usually court) official.

AGENCY AGREEMENT (AGENCY LISTING):

A term describing a listing under which the broker’s commission is protected against a sale by other agents and often by the principal

AGREEMENT FOR LEASE/SALE:

A contract by which land or any other property is leased or sold by one party to another.

AIR RIGHTS:

The right to use the space above a property. This, however, does not include the right to use the land surface on which the property is located.

ALTERNATIVE USER VALUE:

The value of land and buildings which reflects a prospective use that is different from that of the current use.

BINDING OBLIGATIONS:

The rights and duties, agreed upon and described in an agreement executed between two parties, that are binding upon both of them (for example, landlord and tenant or vendor and purchaser)

BONAFIDE:

Legal term meaning actions or individuals that are honest and in good faith

Bond:

A deed by which one agrees to indemnify another person against losses suffered on account of acts of omission or commission by the former. Also means a debt security

BOOK VALUE:

The value which is ascribed to a property shown in the accounts as a capital asset but is not necessarily current market value, since it may be based on actual cost (less depreciation, if any) or on an earlier valuation after acquisition

BREACH OF CONRACT:

An act or omission, contrary to one or more provisions in a contract and therefore giving the aggrieved party the right to enforce specific performance to rescind the contract and/or to claim damages the remedy available depends upon the nature of the breach.

BREACH OF WARRANTY:

Failure to comply with a contractual undertaking, for example, the failure of a vendor to pass title or give vacant possession when such has been warranted such a breach entitles the innocent party to damages, although the breach of a warranty in an insurance contract entitles the insurer to treat the contract as discharged.

CHEQUE BOOK: (Harsh Roongta)

Q. I am planning to buy a resale flat in Mumbai in a building that is 18 years old. I am planning to stay in this flat for the next five years. Do you think the building will meet banks’ criteria for a home loan after five years when I sell the flat?(Shekhar)

Q. The answer to your question will depend on the condition of the building after five years. If the residual life of the building as judged by the technical and valuation expert appointed by the lender is equal to more than the tenure of the loan applied for, the lender will be comfortable approving a home loan against such property.

Q. I am planning to buy a house worth Rs.37 lakh and will be going in for a home loan. Should I go ahead now or should I wait? (Rishab)

Ans. The best time to buy your home is when you have the necessary resources to make the down payment and are reasonably confident of a regular income in the future to service the home loan. Don’t try to time the market as it does not make sense for a lay customer unless the market is highly overheated and is expected to fall sharply. However, the general perception right now is that the property prices will correct in the near future, but this might not actually come about. However, if you want to buy this house as an end-user, the right time is always “now”.

I need to ask three questions:

While calculating eligibility for a home loan, what components of one’s salary are usually considered?
Should the bonus amount also be included?
Some banks are giving loans on the basis of gross monthly salary while some on the basis of net monthly income. Can you tell me what the difference is between the two?
(Tarsem)

Ans. Fixed components of gross monthly income are usually taken into consideration while calculating home loan eligibility. Some lenders do consider the annual bonus while computing the loan eligibility. The decision to include or not include the annual bonus will depend on the bank as well as the regularity with which the borrower has earned the annual bonus in the past.

Whether gross or net salary is considered varies from bank to bank. However, the ultimate eligibility should come to approximately the same figure. The criteria for inclusion of one component of income while calculating the loan eligibility differs from one lender to another, there are no standards for inclusion or exclusion of a particular item across bank.

Q. My mother and I purchased a home, which is financed by a leading bank. I am a co-applicant in home loan. As per the home registry, we have equal share in the home. Can I avail tax rebate in this and under what section of IT act I can get this benefit?(Rajneesh)

Ans. Since both of you are co-owners of the property and co-borrowers to the loan, you both can get tax deduction benefits separately under Section 24 (interest payable on the loan) limited to Rs.1.5 lakh each if the property is self-occupied and under Section 80 C limit to the fullest extent of Rs.1 lakh each (for the principal repaid), as per the ratio of the loan. This is subject to you paying equal share in the EMI either directly to the bank or to your mother through transfer to her bank account.

Q. I have purchased a flat as an investment and got a loan from a leading lender. I am paying EMIs regularly. Can I sell the flat while I am still making my loan repayment?(MK Gupta)

Ans. As I understand from your query, you want to sell the flat and want to continue to pay your loan EMI for its full tenure. You cannot sell the flat unless and until you repay the existing loan. However, the bank may grant you some time to pay the amount. In such a case, the bank will give you a letter mentioning the amount that you have to pay to get back the documents of your property. The amount stated will be as applicable on a future date and will include the interest incurred till that date.

As part of your sale agreement with the buyer you will be required to hand over the original documents of your property. However in case the buyer also wants to take a loan for purchase of this property, both the banks can agree on modalities to be followed so the transaction goes through smoothly.

Resource:HT, Purpose of FAQs are help to the Buyer/Sellers of Properties.