10 MAY, 2022

The home buying process is a rewarding but lengthy one. You start by making the decision to begin this journey, figure out your home loan eligibility, narrow down on your home, and then decide to close the deal and apply for a home loan. This, however, is not the end. Here is where documentation comes in, which is a crucial part of the process. There are several documents required for a home loan and one of the important ones is the allotment letter.

The builder or housing authority issues the allotment letter to the first buyer of the home stating all relevant information about the property such as the physical description of the property and details of the payment. When buying a house, it’s essential to get a copy of the allotment letter from the seller. This is because when you apply for home loan, the allotment letter forms a part of the important documents required by the bank to process your application.

Absence Of An Allotment Letter

There can be situations in which an allotment letter is not available in instances where the owner of the house has lost the original copy. There are a few things that can be done in such a case:

  • The owner of the house needs to lodge an e-FIR and submit an indemnity bond to obtain a Certified True Copy (CTC).

  • Different banks have different conditions and requirements in place for granting a home loan. When it comes to documents required for home loan, a CTC alone may not work as a replacement for the allotment letter for most banks.

  • You can check with the bank if they will grant a loan if the owner of the house publishes a public notice about the loss of the allotment letter. The purpose of doing this is to show that there are no claims or objections regarding the transfer of the house.

  • The notice needs to be published in a daily local newspaper in the local language of the place the house is located as well as English. There should be a period prescribed in the public notice by when a response or claim can be made.

  • Another thing that can help in such a case is the duration of the owner’s possession of the house. If the owner of the house has been in continuous and uninterrupted possession of the property for more than 12 years, this helps add legitimacy to their title.

Key Takeaways

It’s best to reach out to the bank and understand what process they have in place for sanctioning home loans in the absence of an allotment letter. It’s ideal to do so before you publish a public notice because that may not be required by all banks. Once the bank guides you on what needs to be done, you can focus your energies on that documentation work only.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.