One of the biggest mantras for buying a house is due diligence. While this holds for all types of properties, extra care should be taken for certain types of property purchases, such as under-construction, resale, distress sale or a property purchased through an auction.
While it is enticing to buy a property in an auction, it comes with a lot of uncertainties. One such ambiguous point is what will happen to the unpaid utility bills. Read on to know more.
See also: What is bank auction property?
Who pays the charges related to a property purchased through auction?
As per the 2023 Supreme Court ruling, people who buy a property through auction pay all the pending charges, including utility bills.
Thus, all charges associated with a property bought through auction have to be paid by the property owner. The utility bills include electricity bills, water bills, society charges, property tax, etc. If these are not paid, then the society will not give a no objection certificate (NOC), which is a critical legal document. If there is a delay in payments, the new owner will have to pay the penalty too.
What is the time limit for paying the utility bills?
Under the Limitation Act of 1963, the local authorities can collect utility bills till two years from the due date. Hence, if a property has been bought in an auction and has an outstanding bill, the owner must pay it within two years.
Housing.com POV
While properties that are sold through auction come with an affordable price, it is a good idea to know the exact amount that one has to pay before proceeding with the transaction. If it suits you, then go ahead with the property purchase through auction. If it does not sound like a good deal, rethink or defer from buying the property through auction.
FAQs
When does a bank auction a property?
A bank auctions a property when a person who takes a home loan defaults.
Is paying the auction money enough to buy a bank-auctioned property?
No. There are chances that the bank auction property will have pending utility bills that have to be paid in addition to the property cost.
Can you get a home loan for buying a property that is being auctioned?
Yes. You can get a home loan for buying a property that is being auctioned by a bank.
Are bank auction properties sold in as-is condition or are they renovated?
The bank auctions properties in as-is condition. Thus, due diligence is very important.
How to participate in a bank auction?
Check out the auction details on the bank’s website. Once you decide to participate, fill in the form, pay the application fee and the deposit money and participate in the auction.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
