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Can Bank insist registering properties on valuation given ?

 
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djagan1949



Joined: 07 Jan 2009
Posts: 313

PostPosted: Sat Oct 29, 2016 9:01 am    Post subject: Can Bank insist registering properties on valuation given ? Reply with quote

Dear Members

One client informed me that a bank is insisting him to register the sale document based on value given by valuer and not on GLR basis decided by Regitration department. What is the correct value to be adopted. Why more stamp duty is to be paid when the dept itself demands lesser stamp value for registration. What are your views?

Regards

Vr. D. Jagannathan

 

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suchdevs



Joined: 30 Aug 2008
Posts: 348

PostPosted: Fri Nov 04, 2016 10:40 pm    Post subject: Reply with quote

Jagan Sir,

This is merely a freak dicision of the bank team, which has no legal / banking backing behind it. I would suggest to advise your client to ask the bank to give the copy of the circular / notification / document basis which it is asking him to do the same.

In any case, you are one of the most seasoned valuer in the group, and I would like to know what advise you rendered to your client in the case.

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djagan1949



Joined: 07 Jan 2009
Posts: 313

PostPosted: Tue Feb 21, 2017 12:18 pm    Post subject: CAN BANK INSIST TO REGISER DOCUMENT ON VALUATION GIVEN Reply with quote

Dear suchdevs ji

 I waited for the party to take me to the bank branch to put up the case not to insist on registering for a higher value. But the party somehow did not want a discussion at all and was keen to get the loan sanctioned faster. However I am putting my views on this subject for your view and valuable comments.

We have to understand reasons behind the policy of the Bank for this decision. By this advice bank feels there will not be any audit or vigilance query on the credit value extended. Bank may also feel customers would avoid excess valuation to save unnecessary stamp charges. But this may not deter the party from slightly manipulating the value to thier advantage. Let us discuss why bank should not recommend any value at all for registration purpose.

1.     Fixing registration value is the prerogative of registrar and not bank.

2.     This is linked to revenue of the Govt and value deficit or excess to be decided by authorized official. So bank recommendation on registration value is automatically becomes a breach on the system.

3.     In case of undervaluation bank decision will not hold water and Registrar will refuse to act and the title transfer not possible. This will cause irreparable delay / loss to customer.

4.     Valuation varies depending on the purpose but registrar decides value based on GLR fixed by revenue department. This conflict between values registrar decision is final and enforceable.

5.     On some occasions where land acquisition by Govt is expected parties who have stake would registrar documents on higher value than prevailing in market aiming matching compensation. Such document presented will not be considered by valuer. So bank will be misled by such documents.

6.     If a father divides and give a large extent of his property to three of his sons. One as gift deed, other as partition deed and third as sale deed each document will carry different values. Suppose all the three approaches same bank for assistance what value bank will recommend for registration  purpose?                                                                                                                                                               

Hence bank should never influence parties on documentation value.


Regards 

Vr. D. Jagannathan

 

 

Vr

 

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RAJANPVALUER



Joined: 26 Jun 2016
Posts: 3

PostPosted: Thu Feb 23, 2017 6:21 am    Post subject: Reply with quote

Dear Sirs, Please note that Guideline Value is the minimum at which the registration is to be done; there is no objection in registering the property at a higher price. It may be noted that the loan sanctioned will be based on the value at which the property is registered ( ie., loan = registration value margin); in case the borrower needs more loan, he has to register the property at a higher rate, to a maximum of the FMV given by the valuer. In the subject case, the borrower would have requested for more loan and the bank would have inclined to give it and hence the registration at the FMV would have advised.
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