MODT stands for Memorandum of Deposit of Title Deed and it is a very common home loan processing fee. When you apply for a home loan, your application goes through lots of processes and you have to pay various processing fees as well as other charges like Document charges, Late payment charges, Legal fees, and last but not the least, the MODT charge. So, if you are planning to apply for a home loan then you must have a clear idea about the MODT charge and what influence it has on the home loan. Let’s continue reading the article for details!
The MODT charge applies to all types of home loan borrowers. Usually, this title deed is signed by the banker and the customer during the loan availed against the property. Here the borrower has to pay the stamp fees to make the documents legal to stand in a court of law. Usually, the MODT charge differs from state to state depending on the stamp charges and the borrower might have to pay 0.1% to 0.2% of the home loan amount they would borrow.
Jump To A Section
- 1 Memorandum For Deposit Of Title Deed (MODT): All You Should Know
- 2 Steps To Cancel A MODT
- 3 Documents Required To Cancel A MODT
- 4 Advantages Of MODT Charges
- 5 FAQs About What Is MODT Charge
Memorandum For Deposit Of Title Deed (MODT): All You Should Know
MODT is an important home loan element because it is a part of the State Government requirements and it has to be registered at the Sub-Registrar Office. The MODT is mandatory in a few states but not all states.
E-filing of notice of intimation came into effect on 1st April 2013. This process is the digital documentation of the Memorandum for Deposit of Title Deed. E-Filing is introduced to protect the interests of society and the bank. E-filing means the online filing of notices of intimation of mortgage of the property specified in Section 89B of the Registration Act, 1908. Here, the agreement must be registered if it has been signed by both the borrower and the lender. Sign Usually, it takes at least four months from the signature date to complete the process. If the borrower doesn’t sign the agreement, then the mortgagor must file a notice of intimation. E-filling was introduced to stop fraudulent activities like availing loans from multiple banks on the same property. According to Academia.Edu, if the deposit of title deed is done on April 1, 2013, and after then –
1. If an agreement is executed or signed between the mortgagor and the mortgagee, it has to be compulsorily registered. The usual time limit for registration is four months from the date of execution.
2. If such an agreement is not executed, then the mortgagor has to file a notice of intimation of such a mortgage. This notice should be filed within 30 days from the date of the mortgage.
3. When an agreement is executed and registered according to clause (1), then filing of the notice of intimation is not required.
4. The non-registration of agreement / non-filing of notice of intimation may defeat the legality of the mortgage and cause injury to the interests of the parties involved. Any person who fails to file such notice within the prescribed time limit shall be liable for punishment under section 89C of the Act.
Steps To Cancel A MODT
The process of canceling a MODT is quite simple. Follow the below steps –
1. Once you made the payment, you have to collect the NOC (No Objection Certificate) from the bank.
2. Check the NOC carefully and see if your name, loan account number, property address, etc. is on it.
3. The NOC should state that all the dues have been recovered and the bank has no claim on the property.
4. Next, you submit the NOC to the lender; it’s the responsibility of the lender to cancel the MODT when the borrower clears the debt.
5. You can ask the lender to cancel the MODT and issue a ‘Deed of Receipt’.
6. Finally, visit the Sub-Registrar Office with the NOC and remove the lien from the property.
Documents Required To Cancel A MODT
1. Original MODT
2. NOC certificate
3. Bank representative office ID
4. PAN Card
5. ID for two witnesses
Advantages Of MODT Charges
The MODT charge is very low and you might be able to pay as low as 0.1% of the home loan amount.
1. If the property is a registered mortgage, then the cost is comparatively higher.
2. Once you make the payments, you can easily secure the title deed.
3. When the property will be handed over to you, no registration will be required.
FAQs About What Is MODT Charge
How To Pay Stamp Duty?
There are many ways you can pay the stamp duty. For example, you can pay the stamp duty by demand draft and you have to make the draft in favor of the concerned Sub-Registrar Office. On the other hand, all types of document handling fees must be paid in cash. For E-filling, you have to pay the stamp duty online via the Government Receipt Accounting System.
Where Should The Notice Be Filed If The Title Deeds Of Multiple Properties Are Deposited?
If all the properties are located within a similar jurisdiction, then a singular notice is more than enough. However, if the properties are located in different jurisdictions, then you have to submit separate notices.
What Is The Time Limit For The Filing Of Notice?
There is a time limit for the filing of the notice and it is 30 days. So, you have to fill the filing of notice within 30 days from the date of the mortgage.
Can The Time Limit Be Extended In Exceptional Cases Or Otherwise?
No, there is no way you can extend the time limit for exceptional cases. This is a legal provision, therefore; you can’t extend the time limit.
Is MODT Refundable?
No, MODT is not refundable and even for any reason, if your loan is not sanctioned then you won’t get the money back. The MODT charge is available for all home loan borrowers.
Is MODT Mandatory?
Yes, MODT is mandatory because it is a part of the State Government requirements. If you want to get a home loan then you have to register at the Sub-Registrar Office.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.