The Tripartite Agreement in Under-Construction Purchases

Where a home loan funds an under-construction property, there is no completed unit to mortgage at the outset. The tripartite agreement addresses that gap. Signed by the buyer, the developer and the lender, it governs the arrangement until the property is registered and a conventional mortgage is created.

Its practical function is to bring the developer into the financing chain. The developer acknowledges the allotment, undertakes not to create competing rights over the same unit, and agrees to refund the lender directly if the allotment is cancelled - the last of these being the provision most relevant in a distress scenario.

Three areas within it attract attention in buyer guidance. The disbursement trigger, and whether funds are released against independently verified construction milestones or against scheduled dates. The cancellation and refund mechanics, including priority and timelines. And the allocation of interest accruing during construction where a project does not progress as scheduled.

Buyers are generally advised by their advocates to retain an executed copy rather than relying on the developer's file, and to treat developer resistance to a lender-drafted clause as information about the counterparty.

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Disclaimer: General information about the Hyderabad property market, current as at the review date shown. Not legal, financial or investment advice, and not a recommendation regarding any project, developer or transaction. Rules, approvals and local conditions change and vary case by case. Readers making a property decision should obtain independent professional advice and verify the current position with the relevant authority. No liability is accepted for decisions taken on the basis of this content.

Reviewed: September 2026