Did You Know | You can check whether a loan has been taken against a property

Did You Know | You can check whether a loan has been taken against a property

Looking to buy a property? Now you can find out whether the property is mortgaged with any bank or housing finance company. Notified on 31 March, the Central Registry of Securitisation Asset Reconstruction and Security Interest of India will help you do so. It is a new company incorporated by the department of financial services under ministry of finance.

What is the registry

It will act as a central registry and will maintain records of all properties against which loans have been sanctioned. It will also maintain the records of all properties auctioned by asset reconstruction companies.

How can you access

Any individual can access the central registry’s database once its website gets launched. Details such as registration number or the address of the property will help you access information on its loan status.

You will have to pay a fee of 50 electronically using your credit or debit card through a payment gateway.

The limitations

It is not mandatory for lending institutions to provide details of the property against which there is already a loan running. This means the registry will showcase the status of properties on which loan had been taken only after 31 March. However, the government may make it mandatory for lending institutions to provide details of properties on loan for which a repayment tenor of at least one year is left.

Another problem is that it will not take into account properties on which loan has been borrowed from a non-banking finance company. This will again limit the registry’s ambit.

What it means for you

Instances of fraudulent real estate are on the rise. In fact, there are cases where multiple loans have been sanctioned against the same property. The basic purpose of the registry is to curb such fraudulent practices. It is expected that banks and housing finance companies will make extensive use of the registry before sanctioning any loan.

In the secondary market, buyers are often expected to give a lump sum even before the loan is sanctioned. In such cases, individuals can run a check on their own before settling for a deal.

However, since it’s just the beginning, it is yet to be seen how this facility finally takes off.