TRIPARTITE AGREEMENT BETWEEN BUYER, SELLER AND BANK
- 1. TRANSACTION
On 1 April 2026, Harpreet Singh, Aarav Sharma and HDFC Bank Limited, of Sector 17, Chandigarh, record financing arrangements for House 52, Sector 8, Chandigarh under Agreement to Sell dated 01 August 2026.
Loan/application reference: HL-CHD-2026-88421. Sale consideration: ₹2,50,00,000 (Rupees Two Crore Fifty Lakh only). Buyer own contribution: ₹1,00,00,000 (Rupees One Crore only). Sanctioned/expected loan: ₹1,50,00,000 (Rupees One Crore Fifty Lakh only).
- 2. DISBURSEMENT
Disbursement route: Directly to seller against completion documents. Conditions: Registered conveyance/mortgage documents, seller title originals, loan closure statement and buyer margin contribution..
Existing mortgage: Property is free from lender mortgage at disbursement.
- 3. TITLE DOCUMENTS AND SECURITY
Title custody: Financing lender as mortgage security.
- 4. PAYMENT AND FAILURE OF FUNDING
Seller payment/discharge: Only when cleared funds reach seller/existing lender according to the agreed disbursement route. Failed disbursement: Buyer remains responsible for completing payment unless agreement conditions provide a financing exit.
- 5. BANK ROLE
Bank obligations are limited to its sanction/security documents and stated disbursement undertaking. This tripartite agreement coordinates money and documents; it does not make the bank the seller, buyer or guarantor of title.
Section 54 of the Transfer of Property Act, 1882 treats a contract for sale as an agreement that a sale will take place on settled terms; the contract does not by itself create an interest in or charge on the property. The final transfer of ownership must occur through the legally required conveyance/registered instrument.
The lender may require the buyer to contribute its own margin before or proportionately with loan disbursement. The buyer should provide evidence of margin payment where the sanction requires it. The seller should not treat a sanction letter as equivalent to cleared funds; payment occurs only through the agreed disbursement route.
Where the seller’s property is already mortgaged, the payoff amount should come from a current lender statement and the release process should be coordinated so the old lender receives the amount necessary to release originals/charge. Any surplus loan disbursement goes to the seller only after the agreed closure sequence. The buyer should not pay the seller directly an amount earmarked for charge release unless the financing structure safely permits it.
Original title documents may move from the seller’s existing lender to the buyer’s lender without ever being physically handed to the buyer. The parties should keep a document list and acknowledgment at each stage. The tripartite arrangement should not state that the seller delivered originals to the buyer if the bank-to-bank process was different.