What is a Notice of Intimidation (NOI) and its charges for home loans?

notice of intimation

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Last updated on 7th June 2024

The concept of a Notice of Intimation is pivotal in the realm of home loans, yet it often remains an overlooked aspect among borrowers. Since April 1, 2013, it has become an integral part of home loan transactions. This document, essential for registering a home loan, plays a pivotal role in preventing property fraud, avoiding multiple registrations of the same house, and ensuring no multiple loans are issued on the same property.

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Understanding the NOI process and its implications is key to a seamless and legally compliant home loan experience. It explains the notice of intimation meaning and its crucial role in safeguarding both lenders and borrowers. By understanding NOI's intricacies, homeowners can navigate the complexities of mortgage transactions with greater confidence and clarity.

What is Notice of Intimation (NOI)?

Notice of Intimation, (noi full form) is a legal document that plays a vital role in the home loan process. This document is essentially a letter of intimation of mortgage, officially informing the relevant government authority about the mortgage created on a property. It is a statutory requirement in many jurisdictions and is crucial for maintaining transparency in property transactions.

How does NOI work?

NOI comes into play when a home loan agreement is not registered. In such cases, the borrower must submit an NOI within 30 days of receiving the first loan disbursement. It's the borrower's responsibility to ensure this submission, vital for maintaining the mortgage's legality. The NOI serves as a record of the loan agreement and ensures that the lender and borrower are on the same page. It also helps to protect the borrower from any potential misunderstandings or discrepancies that may arise in the future.

Applicability and Exemptions of NOI

Interestingly, NOI doesn't apply if both parties, the borrower and lender, mutually agree on the loan terms. However, in most cases, the borrower is required to register this agreement within 30 days, with the lender submitting the NOI to the Sub-Registrar’s Office under the property's jurisdiction.

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Why is NOI Important in Home Loans?

The primary purpose of noi in home loan is to record the mortgage in public records. This ensures that any future transactions involving the property acknowledge the existing mortgage, thereby protecting the lender's interests. It is primarily the borrower's responsibility to file the NOI. Failing to do so can lead to penalties, making it a crucial step in the loan process. Additionally, the lender may require a borrower to provide proof of NOI if they make any changes to the terms of the loan.

e-Filing for NOI

Deposit of Title Deed Notice for NOI through e-Filing - Since April 1, 2013, borrowers have had the option to file NOI online, as per Section 89B of the Registration Act. This process involves submitting the necessary title documents electronically, an efficient way to prevent fraud and ensure transparency. Electronic filing eliminates the need for manual paperwork, which requires manual data entry and is more prone to mistakes. Furthermore, e-filing ensures that all documents are kept secure and confidential, reducing the potential for fraud.

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The Procedure for Filing NOI

The process for filing a noi in-home loan involves submitting the required documents to the designated government office within a specified period from the date of mortgage creation. The documents typically include the loan agreement, a copy of the mortgage deed, and the NOI itself.

  • The first step involves paying the Stamp Duty, a tax levied on property transactions as per the Indian Stamp Act, of 1899. This should be done immediately after purchasing the property.
  • The next step requires attaching passport-sized photos of the lender along with their signature or fingerprint, adding authenticity to the document.
  • The third step involves getting the Stamp Duty authenticated by a relevant bank official, enhancing the document's credibility.
  • The final step is to submit both the original and a photocopy of the NOI to the Sub-Registrar, ensuring all legalities are adequately covered.
  • If Stamp Duty is paid on another document, an additional fee of Rs. 100 is charged for the NOI, accompanied by an authenticated copy of the other document.

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Charges Associated with NOI

Noi charges for home loans are Rs 1000, regardless of the loan amount. Additional document handling charges of Rs 300 apply for physical filings. In the case of e-filing, these fees are paid through the Government Receipt Accounting System (GRAS). The charges are applicable even if the loan is not sanctioned. The fees are non-refundable and must be paid within 15 days of filing the NOI. The fees must be paid in a lump sum.

Required Documentation for NOI

The NOI must be accompanied by the duly filled and signed application form, documents in support of the loan application, and evidence of payment of processing fees. The documents must be in English or Hindi and be verified to be true.
The following documents are required for NOI filing:

  • eSBTR or Stamp Papers for 0.2% of the loan amount, authenticated by the bank.
  • Passport-sized photos of all borrowers.
  • Photocopy of the accepted sanction letter.
  • Copies of PAN cards of all borrowers.
  • Recent Index – 2 copies.
  • Notice Of Intimation with a Rs. 100 stamp paper or franking.
  • Self-attested identification by a bank representative.
  • List of deposited documents (Photocopy).
  • Original letter from the bank with routing information.

FAQs About Notice of Intimidation (NOI)

The primary purpose of a Notice of Intimation is to officially inform the appropriate government authority about a mortgage created on a property. This notification is crucial for maintaining transparency in property transactions and preventing potential fraud, such as multiple registrations or loans on the same property. It ensures that any future dealings involving the property are aware of the existing mortgage.

In banking terms, a NOI refers to the formal notification given to the Sub-Registrar's Office, indicating that a mortgage has been created on a property due to a home loan. This document is critical for banks and financial institutions as it secures their interest in the property and ensures that their claim is legally recognized and recorded.

Failing to submit the NOI within the prescribed time frame can lead to legal consequences. It jeopardizes the legal standing of the mortgage, potentially leading to disputes over property ownership and challenges in enforcing the mortgage in case of default. Additionally, it could result in penalties as outlined in section 89C of the Registration Act.

NOI charges refer to the fees associated with filing the Notice of Intimation. These charges cover the cost of processing and legally acknowledging the NOI. The amount is typically nominal compared to the overall loan value but is essential for the legal sanctity of the loan agreement and the mortgage.

The time limit for filing an NOI is generally within 30 days from the date of disbursement of the first loan amount. This deadline is crucial and must be adhered to in order to ensure the legal validity of the mortgage.

Typically, it is the responsibility of the borrower, not the lender, to submit the NOI. The borrower must ensure that the NOI is filed within the specified time frame to the Sub-Registrar's Office under the jurisdiction of the property. However, lenders may assist or guide borrowers in this process to ensure compliance and protect their own interests.

Published on 28th December 2023