Memorandum for Deposit of Title Deed (MODT): All You Should Know

If you seek a home loan, be aware of Memorandum for Deposit of Title Deed (abbreviated as MODT). What is MODT? A MODT is an undertaking given by home loan borrowers stating that they have deposited the title documents with lenders. It is applicable to all types of home loans today.

For a few banks, the undertaking has to be registered in addition to the loan agreement. The government levies a stamp duty of 0.10-0.20% of the home loan amount. A MODT is one of the hidden home loan charges. Lenders require you to give this undertaking to recover debts in case you do not make payments on time.

• A MODT is a part of the State Government requirements and has to be registered at the Sub-Registrar Office.
• It is mandatory in a few states, but not in all states.
• The pledged property is endorsed at the Sub-Registrar office.

Want to know more on Investment Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Memorandum for Deposit of Title Deed (MODT): All You Should Know

E-filing:

E-filing of intimation notice came into effect on 1^st April 2013. E-filing is the digital documentation of the title deed. The new amendments have been introduced to protect the interests of society and the bank.

• The agreement has to be registered if it has been signed by both the borrower and the lender. From the date of the registration, it normally takes 4 months for the registration process.
• If the agreement is not signed, then the mortgagor must file a notice of intimation. 

Steps to cancel a MODT

1. Once the payment is made, collect NOC (No Objection Certificate) from the bank and check if the NOC has your name, the loan account number, the property address and so on. It should state that all the dues have been recovered and the bank has no claim on the property.
2. It is the responsibility of the lender to cancel the MODT once debts are cleared. Ask your lender to cancel the MODT and issue a ‘Deed of Receipt’.
3. Visit the Sub-Registrar Office with the NOC. Get the lien removed from the property.

Documents required to cancel a MODT

• Original MODT
• NOC certificate
• Bank representative office ID
• Aadhaar Card
• PAN Card
• ID for two witnesses

How to pay stamp duty?

Stamp duty may be paid via any permissible option in case of physical filing. If you would like to pay by demand draft, it must be in favor of the concerned Sub-Registrar Office. Document handling fees must be paid in cash. In case of e-filing, stamp duty must be paid online via the Government Receipt Accounting System.

Where should the notice be filed if the title deeds of multiple properties are deposited?

1. A single notice is sufficient if all properties are located within a similar jurisdiction.
2. Separate notices must be prepared if the properties are located in different jurisdictions. Under such circumstances, the document handling and filing charges have to be remitted separately.

Benefits of MODT

• The stamp duty and other fees are as low as 0.1% of the home loan amount. In case of registered mortgages, the cost is comparatively higher.
• The title deed can be easily secured after making the payments.
• No registration process is required when the property is handed over to you.

Bottom line

An individual can accumulate funds by depositing the title deed of a non-moveable property. Many states have made it compulsory with increasing home loan scams.

Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing

Have a complaint against any company? IndianMoney.com's complaint portal iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.

Be Wise, Get Rich.