What is a Notice of Intimation in Home Loans and why it matters for borrowers

For many, purchasing a home is a milestone that often requires financial assistance through a Home Loan. Given the persistent cases of fraud in the real estate sector, it is crucial to have legal safeguards in place to protect both borrowers and lenders. One such safeguard is the Notice of Intimation, an essential document that helps ensure transparency and security in Home Loan transactions.

An NOI, or Notice of Intimation, is a crucial document in the Home Loan registration process. It is filed to notify the relevant authorities that a Home Loan has been sanctioned for a particular property. The primary objective is to prevent real estate fraud, such as multiple registrations or taking out multiple Loans on the same property. Let us explore the meaning of the NOI, its significance, and the charges.

How does NOI work?

When applying for a Home Loan, the lending institution provides an agreement outlining the Loan terms and conditions. If the borrower accepts these terms, the agreement is signed and registered. There is no requirement for the borrower to file a separate Notice of Intent. However, suppose the Loan agreement is not registered.

In that case, it becomes the borrower’s responsibility to submit a Notice of Intent to the Sub-Registrar’s office within 30 days of receiving the first Loan amount. Failing to register the Loan agreement or file an NOI can put the validity of the Loan at risk. Borrowers who do not comply with this requirement may be penalised under Section 89C of the Registration Act. Here are some key reasons why NOI is important for Home Loan transactions:

• Legal compliance: If the Loan agreement is not registered, filing an NOI is mandatory to establish a legal record of the Loan and avoid penalties under Section 89C.
• Prevention of fraud: Registering an NOI helps prevent fraudulent property transactions by ensuring that the Home Loan is officially recorded.
• Clarity and transparency: The NOI provides a legally documented confirmation of the Home Loan, ensuring transparency between the lender and borrower. It reduces the likelihood of disputes by clearly establishing the Loan agreement in public records.

Procedure for filing NOI

To file a Notice of Intimation, a borrower must first pay the stamp duty (which varies by state) through the Government Receipt Accounting System. Get the NOI form authenticated and sealed by a lender representative, attach a signed passport-sized photo, and submit the original notification letter and a photocopy to the Sub-Registrar’s office. After verification, the Sub-Registrar will issue a receipt and an acknowledgement on the photocopy.

You may also need to pay a standard fee of Rs. 1000, irrespective of the Loan amount. An additional document handling charge of Rs. 300 is levied for physical submissions. Payments are possible through the GRAS. Cheques should be made payable to the Sub-Registrar’s office. Pay the document handling fee in cash.

Conclusion

NOI is a crucial legal safeguard in the Home Loan process. Ensuring proper documentation and registration of Loan agreements promotes transparency and helps prevent fraudulent activities.