When applying for a home loan, you are handed over a checklist of documents. One of those documents is a MODT deed.
MODT stands for the Memorandum of Deposit of Title Deed. You can consider it one of the lesser-known hidden charges you pay to the state government when taking a loan. So, let’s understand what it is, the benefits of MODT, the features of MODT deed, and how to file a deed digitally.
What is the Memorandum of Deposit of Title Deed (MODT), and what are the features of MODT?
Through a MODT deed, a borrower gives a printed undertaking. It states that they have deposited their property's title document with the lender out of their free will. The title document deposit takes place in exchange for a loan.
A borrower must register the MODT deed at the state sub-registrar’s office. There is a nominal stamp duty of 0.10% to 0.20% of the total home loan amount, depending on which state you reside in. However, there is a caveat. The MODT deed's stamp duty cannot exceed Rs. 25,000 regardless of the total loan amount.
Earlier, the MODT undertaking was not mandatory in all states, but with recent regulations, almost all financial institutions ask for this document when disbursing the final loan instalment. Lenders make this document mandatory in the paperwork checklist as this acts as proof that they have the right to recover debts if a borrower keeps defaulting on their EMIs.
Benefits of MODT Deed
Here are the top three benefits of MODT deed.
- The registration for acquiring a MODT happens quickly.
- Once you’ve repaid your loan, you can cancel the MODT easily.
- You don’t need to repay any registration fee or retransfer the MODT once the property title is handed over to you.
How to file a Memorandum Of Deposit Of Title Deed digitally?
Before filing for MODT registration, electronically or physically, you must acquire the Notice of Intimation or NOI from your lender. This notice contains information regarding the disbursal of your home loan. You must submit it to the sub-registrar's office. You must acquire and file the NOI within 30 days of the loan agreement’s date.
Now, let’s look at how you can submit the NOI and other information through e-filing.
- Since 2013, borrowers can register or e-file for MODT by uploading their NOI on the state Department of Registrations and Stamps’ website. Each state has its own e-filing portal.
- Once you're on your state’s webpage, locate all files needed for a MODT deed registration. Here, you may be required to fill out a digital form with space for personal and property details. You will also select the mode of stamp duty payment. Most states accept demand drafts, e-payments, or cash payments made at stipulated banks or on the web portal after printing a challan.
- After this, submit the completed form with NOI at the respective sub-registrar’s office. Remember, the online procedure is essentially a way for e-filing the Notice of Intimation for MODT. You can also request your lending institution to file the MODT for you.
How to file MODT deed physically?
Here's how you can file for MODT deed physically.
- After acquiring the NOI, carry it to the sub-registrar’s office. Here, you will fill out a form and attach your NOI with it.
- After submitting the form, NOI and any other document they may ask for, pay the stamp duty. You cannot pay the stamp duty directly to the officer at the sub-registrar’s office. You must go to a designated bank. They will verify your identity, and collect stamp duty.
- Once you've paid the stamp duty in full, the bank officer will provide you with its stamped proof. Send this proof along with a photocopy of the notice to the sub-registrar’s office.
- The sub-registrar then checks your complete application with proof of duty payment and accepts the hardcopy.
How to cancel MODT?
If you want to cancel the Memorandum of Deposit of the Title Deed, follow the short process listed below.
- Get a No Objection Certificate or NOC from your lender. It should carry your name, property details, loan account number and other relevant information. It should also state that you have cleared all the dues, and the lender has no claim on the property anymore.
- Along with receiving the NOC, you must request a 'Deed of Receipt' from your lender. This is proof that they have cancelled the MODT from their end.
- With both these documents, visit the sub-registrar’s office and request them to remove the lien from your property.
The bottom line
Now that you know all the features of MODT deed, it's time to apply for housing finance. Haven't finalised a lender yet? Partner with Tata Capital to avail of some of the most competitive home loan interest rates at flexible repayment tenures and relaxed eligibility criteria.
Visit our website to know more!