Home loan: This document is essential for property verification by banks, check details

Home loan: The letter of allotment holds significant importance when it comes to obtaining a home loan. It is a document provided by the property developer or housing authority, containing detailed information about a property, such as a house, plot, or flat. The allotment letter is initially given to the first buyer of the property, who subsequently provides a copy of it to the next buyer when selling it. Many banks consider the allotment letter essential during the home loan process. This is because it enables them to conduct a legal verification of the property and ensures that there are no disputes associated with it.

Now, a common question arises: what happens if the allotment letter is lost by the person from whom the property is being purchased? Will the bank still grant a home loan for the purchased property? It is important to note that different banks have different criteria in this regard. While some banks require the allotment letter as a mandatory document for granting a loan, others may approve the loan even in its absence. This variation exists because different banks have established their own specific criteria for assessing loans. Some banks may not provide a home loan without the allotment letter, while others may accept alternative documents for loan approval.

Each bank has its own set of rules in this regard. For example, certain banks may grant a home loan if the original allotment letter is lost, provided that a public notice is issued and a certified copy is obtained by depositing an indemnity bond. Additionally, some banks may require completion of other formalities. In the event of losing the original allotment letter, the property owner can obtain a certified true copy (CTC) of the allotment letter by filing an e-FIR (First Information Report) and submitting an indemnity bond.

If you are considering purchasing a house where the owner does not possess the original allotment letter, it is advisable to contact the bank as a first step. Inquire whether the bank would grant a loan without the original allotment letter. Additionally, check if the current owner of the house or flat has published a notice regarding the loss of the original allotment letter in both English and a local language newspaper. Typically, the period for filing claims and objections in response to such notices ranges from 7 to 21 days. Alternatively, if the landlord has continuously occupied the house for 12 years, it can serve as strong evidence of ownership, which banks consider highly valuable and helpful when applying for a home loan.

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