Tripartite agreements are legal documents that involve three parties, each with their specific role. They are commonly used in real estate, where a builder, buyer, and seller enter into an agreement.

Who prepares tripartite agreement?

In the leasing industry, tripartite agreements can be drafted among the lender, the owner/borrower and the tenant. These agreements usually state that if the owner/borrower is in breach of the non-payment clause of the loan agreement, the mortgager/lender becomes the new owner of the property.

Useful Circumstances for a Tripartite Agreement-

There are several circumstances under which a tri-party agreement finds its use.

When a property is being sold and the society is registered, it becomes necessary to create a tripartite agreement between the seller, buyer, and the society.

In case a property has been bought from a builder and during the resale, a society has not been established, you would find much use in a tri party agreement between builder buyer and seller format.

In case of an encroachment on a property including a land, home, farm etc., a tripartite agreement finds much use for establishing legal obligations.

You will find use of a tri party agreement for sale of property format when a registered society has agreed to sell and buy and has no objection against the transfer of the flat and the subsequent change of ownership.

You will also find use of a tri party agreement for third party payment format if a builder has been made a third party, and the builder itself becomes responsible for making a new society, new buyer, or an apartment.

Parties to a Tripartite Agreement-

A tripartite agreement is a legal document involving three parties:

The person willing to buy the property i.e. the buyer;

The person willing to sell the property i.e. the seller, builder or developer; and

The institution granting the loan i.e. the bank/financial institution.

Details to be included in a Tripartite Agreement-

Who are the parties to the agreement?
What is the object of the agreement?
Particulars of the subject property 
Terms and conditions agreed upon
The agreement should include the perspective of the borrower/buyer, lender, the developer/seller/builder.
What are the rights and remedies of the parties under the agreement?
Legal implications
The obligations etc. of the parties
What is the selling price of the property?
Date of possession
The phases and progress of construction activity.
Interest rate as applicable.
EMI details and payment schedule.
The penalty if the booking is cancelled.
Common areas and amenities agreed upon.
Declaration by developer/seller/builder that the property has a clear title.
Declaration by the seller that he has not entered into any new agreement to sell the property to any other party
The liability of the builder to construct the property in accordance with the plans approved by the local authority should also be specified.
Original property documents are to be annexed.
The agreement should be properly stamped according to the law of the State in which the property is situated.

Advantages of a Tripartite Agreement-

A tripartite agreement helps in applying for home loans.

It facilitates the lender/bank in doing the legal checks before investing in a property.

The agreement includes all the details of the transaction (mentioned above) and restricts the developer from entering into a purchase deal of the same property with another buyer.

Sample Tripartite Agreement (important clauses)-


This Tripartite Agreement (“Agreement”) is made and executed at the (Place) and on (Date),


(1) The buyer, whose name, address and other details are mentioned in Schedule I hereunder (hereinafter referred to as the “Buyer”, which term shall, unless repugnant to the subject, context or meaning thereof, include its/his/her/their successor(s), heir(s) and permitted assign(s)) of the First Part;


(2) The builder, whose name, address and other details are mentioned in Schedule I hereunder (hereinafter referred to as the “Builder”, which term shall, unless repugnant to the subject, context or meaning thereof, include its successor(s), heir(s) and permitted assigns) of the Second Part;


(3) M/s. A & B Finance Limited, a company under the Companies Act, 2013, having its registered office at XYZ and having Corporate Identity Number: …. (hereinafter referred to as the “Lender”, which term shall, unless repugnant to the subject, context or meaning thereof, include its successors and assigns) of the Third Part.

Each party shall hereinafter be individually referred to as the “Party” and collectively as the “Parties‟.


The Builder is engaged in the business of developing real estate projects and is developing the project on the said land more particularly mentioned in Schedule II hereunder.

On being satisfied with regard to the integrity and capability of the Builder for the timely completion of the Project, the buyer has entered into an agreement with the Builder (Builder-Buyer Agreement) for sale of the unit/flat as described in Schedule II hereunder in favour of the Buyer at a total sale consideration mentioned in the Schedule I hereunder (“Sale Consideration”).

The Buyer has approached the Lender for a loan up to the amount mentioned in Schedule I hereunder for the purpose of purchasing the flat. The lender has agreed to sanction the same subject to, inter alia, creation of first-ranking charge(s)/lien(s)/mortgage(s)/encumbrance(s) over the unit/flat (including all receivables therefrom/relating thereto) by the Buyer exclusively in favor of the Lender and on the terms and conditions mentioned in loan documents.


If you are planning to take a housing loan for purchasing any under-development property, it will be beneficial for you to enter into a tripartite agreement. These agreements become particularly useful when funds are loaned for a property that has not yet been built and helps in avoiding any future conflicts that may arise out of conflicting claims, say, in the event of default of the buyer or in case of his death during construction.

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