Question:
I am interested in buying a flat in Old Dhaka. Today, I found out that the flat owner has a bank loan. How can I easily understand whether the loan is on the flat itself or whether the flat is mortgaged to the bank?
Answer:
To determine whether the loan is attached to the flat or whether it is mortgaged, you can follow these steps:
- Check the Title Deed of the Flat:
- Request the Title Deed: The title deed should be available with the current owner of the flat. It will clearly state whether the property is mortgaged to a bank. If the title deed includes a mention of the loan or mortgage, then the flat is under mortgage.
- Mortgage Clause: Look for any clause in the deed that mentions a bank or financial institution as a creditor. This clause should state that the flat is mortgaged as security for a loan.
- Visit the Bank for Clarification:
- Bank Statement: Ask the seller for a bank statement or loan agreement showing details of the loan taken against the flat. A loan agreement will include the terms of the mortgage, the amount owed, and if the flat is the collateral.
- Check with the Bank: You can visit the bank directly and inquire whether the flat is mortgaged with them. You will need to provide the flat’s identification details, such as the title deed number or registration number, to verify the mortgage status.
- Search the Property Records (Land Registry):
- You can check with the Land Registry office in the local jurisdiction where the property is located (in this case, Old Dhaka). The property registry will have a record of whether any mortgage is registered against the flat.
- This can provide an official record that confirms whether the flat is mortgaged to a bank.
- Seller’s Declaration:
- It is essential to have a written declaration from the seller, stating that the flat is not mortgaged or that they will clear the mortgage before the transfer of ownership.
- You can also request a clearance certificate from the bank confirming that the loan has been fully paid or that it will be settled at the time of the sale.
- Hire a Lawyer or Property Consultant:
- If you want to ensure that everything is clear, you can hire a lawyer or property consultant who specializes in property transactions. They can help verify the mortgage status and ensure that the transfer of the flat is legally sound.