Is a home loan a guarantee of a clear title to the property? The answer may surprise you; here is what you need to know

When you are buying a house or an apartment with a home loan, the legal team of the bank or the NBFC providing the loan, or one associated with the real estate project, conducts specific checks. However, these legal checks are for the bank’s own benefit, ensuring that the property can be sold to recover any outstanding loan, that the declared property value is accurate and that you can manage the home loan payments. The main focus of the bank’s legal team is to recover their home loan in case of any problems, rather than addressing any issues or disputes you may face after buying the property.

At the ET Wealth Expo 2026, hard hitting questions like these were posed to a panel of experts, including Sadhav Mishra, Senior Partner, Head of Real Estate at SNG & Partner Advocates and Solicitors, Amit H Wadhwani , Partner, Real Estate, Khaitan & Co, Farid Karachiwala, Partner, J. Sagar Associates and Sagar Kadam, Partner, DSK Legal. The panelists also discussed homebuyer s’ rights in case of delay in possession , handling succession disputes, managing finances during a divorce and asset division disputes.

Is home loan a guarantee of clear title?

Sagar Kadam, Partner, DSK Legal, says that the criteria for a home loan providing bank’s legal team to check the title of a real estate project is different from what a homebuyer may be looking for . A bank or a lender’s criteria for verification of title is more for protecting their asset’s secured interest rather than questioning the nature of the title .


Sagar says that homebuyers have to make sure that the title of the property is squeaky clean as the lender’s verification process is focussed and limited to only the aspect that their interest in the property is protected.

Sadhav Mishra, Senior Partner, Head of Real Estate at SNG & Partner Advocates and Solicitors, said that generally the title verification done by the bank’s or lender’s legal team is very restrictive in nature and does not talk about the statutory dues applicable on the land or the structure or building or about the approvals if they are in place.

For example: when a homebuyer is buying a flat, then the title of the flat, the title of the land on which this building stands and the title of the building, all need to be checked and it has to be seen if there are any dues or approvals pending.

Mishra says: “So homebuyers cannot rely on a title search due diligence done by a bank or lender who has approved a home loan for this house. Homebuyers should hire legal experts and do independent due diligence.”

Amit H Wadhwani , Partner, Real Estate, Khaitan & Co, says that most banks that sell repossessed flats or apartments under SARFAESI Act, sell it on ‘as is where is’ basis. So a bank’s criteria for verification is only if it can sell the property and not with the disputes or other issues with the property. This is why homebuyers need to be aware and check for any legal issues with the property themselves .

Wadhwani says: “A bank’s verification process cannot be the magnifying glass for homebuyers to invest their money for buying that property. It is important for homebuyers to read the fine print and hire a second set of counsel to verify the legal documents of the property and its title as the empanelled bank’s title check has no bearing on the disputes which a homebuyer may face later on due to bad title to the property.”

Farid Karachiwala, Partner, J. Sagar Associates says that in India there is no law about implied warranty, which means homebuyers have to themselves verify the genuineness of the property i.e. Caveat Emptor (let the buyer beware).

Karachiwala says that in India the home loan agreement says that a borrower is giving representations about his title to the property to the bank or lender, so in a way the homebuyer is indemnifying the bank that if there is any future dispute about the title of the property, the homebuyer will bear the responsibility and not the bank.

Karachiwala says: “So homebuyers should be fully convinced that there should be an independent verification of the title to the property irrespective of what the bank or lender’s legal team has checked. As a homebuyer, your title to the property needs to be clear.”