The Buyt Desk
On the closure of a home loan if you find that your bank has misplaced your original property documents it could be very disturbing. Here is what you can do.
When you opt for a Home Loan, you submit all the original documents of the property to the lender. The lender has your original documents until you repay your loan. The documents are kept in the central repository all through the loan tenure. If they are needed for any purpose during the tenure, then they will be pulled out from the central repository and kept back once the work is done. At the home loan closure, you will be given back all original documents. The central repositories are mostly in Mumbai and maintained by 3rd parties. In this process, your documents are handled by many hands and there might be a moment when the documents get lost.
Losing the most critical important documents like the sale agreement or sale deed can create a lot of hassles in selling the property further. It will also not be possible to avail loan against a property with missing papers. Sometimes the bank may not accept their negligent act of losing original documents. When the lender does not take up the responsibility, the customer is left distressed, defenceless and vulnerable. In such a case, the property owner should take right and quick actions so that there is no further damage and things can be retrieved. The owner should act carefully and lenders should never turn away irresponsibly, neglecting their mistake. Here is what a borrower should do and follow the procedure as the inculcation of remedy.
What can be done by a property owner when the lender loses Original Property Documents?
1. Never accept any original document from the bank when in doubt – When you know one of the original documents is missing or a few pages of the document are missing, do not accept the documents. If you take those, the bank may say that you have taken all documents as you have signed the acknowledgement. Even if the lender assures you that they will find the missing document, do not accept the rest.
2. Do not sign any acknowledgement saying you have received the documents – Usually, banks ask you to sign an acknowledgement or undertaking even before giving you original documents. Never sign before checking the documents.
3. Give a written complaint to the bank concerning lost documents – As soon as you get to know about lost originals, register a written complaint with the bank and describe in detail the lost original document by the bank. Also, take a complaint copy with the manager’s signature and bank seal.
4. Register a police report/ FIR- It is a must to register a police FIR when you lose any government-issued document. Make sure you mention that the Bank has lost your original document which you had given for collateral.
5. Submit a copy of the Police FIR to the bank – Once you submit the copy of the Police FIR to the bank, take acknowledgement from them about receiving the Police FIR copy.
6. Submit court affidavit to banks – In the court affidavit state that the original property documents are lost by the bank. And submit the same to the bank.
7. Public notice in two newspapers – The bank will publish a public notice, one in an English newspaper and one in the vernacular language of the state. The notice states the property details and mentions that the original property documents are lost by the bank. If the public has any objection then it can be filed within 15 days.
8. Indemnity bond from the bank – Bank will issue an attested & notarized indemnity bond on stamp paper stating that original documents are lost by the bank with details of the property, Police FIR and public notice published in 2 newspapers.
9. Duplicate share certificate – Ask for a duplicate share certificate from the housing society by submitting a Police FIR copy and stating original property documents lost by the bank.
10. Certified copies from the registrar’s office – Bank will pay the required charges and get the duplicate copy from the registrar.
11. Encumbrance Certificate from Registrar Office – Get the latest Encumbrance certificate from the registrar’s office after all the above processes.
12. File a complaint in the consumer forum – A complaint in the Consumer forum can be filed to claim compensation from a bank for service scarcity. The compensation claimed can be equivalent to double the value of your property.
13. Penalty on Bank – The lender is liable to pay Rs 100 per day after 15 days of loan closure till the documents reach the owner.
Who will do this entire process?
The lender /bank is responsible for losing the document and it is their responsibility to run around and do all the above steps. All the costs of getting the new documents will be borne by the bank. But you need to take a copy of every legal document in the procedure for your reference including public notice, FIR copy, indemnity bond, duplicate sale deed etc.
