While the SPA is being prepared, Facilities Agreeemnt shall also be prepared at the same time. Facility Agreement is signed between the lending bank and borrower (Purchaser). Facilities Agreement is also preprared by the loan lawyer together with the SPA. The lawyer is in the bank's panel of lawyers. TGhis agreement contains the following :
a) particulars of parties i.e. the lendikng bank and borrower.
b) Type and purpose of facilities required by borrower.
c) Schedule of payment
d) Percentage of interest to be charged by bank for late repayment by borrower.
e) All matters on chargeable interest e.g. BLR + 1 %
This agreement requries the borrower to absolutely charge the property to the lending bank. Previosuly any proceeding against the developer needs the bank's consent in writing. Government has passed law now retrospectively making this illegal.
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