A tripartite agreement signifies the role and responsibilities of all parties involved, with the exception of basic information about them. A tripartite agreement is required if a property buyer wishes to purchase a property under construction. If the property were complete, it would be a bilateral agreement between the borrower and the lender. As the borrower is not in possession of the property, the name of the contracting authority must be included in the agreement which makes it a tripartite agreement. A tripartite agreement is important if you want to buy a property under construction. Since the property is under construction and you are not the property, the developer must be included in the agreement. The other contracting party is the bank. In some cases, tripartite agreements may cover the owner, architect or designer and contractor. These agreements are essentially “no-fault” agreements, in which all parties agree to correct their own errors or negligence and not to make the other parties liable for omissions or errors committed in good faith. In order to avoid errors and delays, they often contain a detailed quality plan and determine when and where regular meetings will be held between the parties.
When designing the tripartite agreement, the following points should be taken into account: A tripartite agreement is important from the point of view of the developer or seller, because in the event that the buyer or borrower is in arrears in the payment of the loan to the lender, the lender will become the owner of the bank. The interests of the seller or developer are protected by this agreement. “In the leasing sector, tripartite agreements can be concluded between the lender, the owner/borrower and the tenant. These agreements usually stipulate that if the owner/borrower violates the non-payment clause of the loan agreement, the mortgage lender/lender becomes the new owner of the property. In addition, tenants will then have to accept the mortgage/lender as the new owner. The agreement also prevents the new landlord from changing the tenants` clauses or provisions,” Bulchandani adds. If the property in question has a single title and the price offered by the developer for the property under construction corresponds to the market price, it is wise to conclude this contract. A tripartite construction credit agreement generally lists the rights and remedies of the three parties from the perspective of the borrower, the lender and the developer. It describes the phases or phases of construction, the final sale price, the date of holding as well as the interest rate and payment plan of the loan. .