Yes, you read it right. If the lender (NBFCs, HNI or Private or Nationalized banks) ignores the sanctioning it may make the value of the property zero.
Suppose a client has approached you & needs a loan on their property. The valuer appointed by the lender ignores the sanctioning details of the property & it turns out that it is an illegal property, it will change the value because
1. The potential of the property changes which changes the value drastically. A residential NA land has a lot of potential than an agricultural land because of the process that goes behind the sanctioning.
2. In case of Immovable Assets like flats, shops or offices, their existence itself becomes questionable if they are illegal. And the value becomes zero.
3. Sometimes a part of the property is illegal. For eg. In case of a bunglow or factory Building is illegal but land is not. Even in this case, on one hand there is a fear of the building being demolished by the local authorities & on the other it removes a component of the property to be valued.
Remember you can’t build sand castles in air.
There is one more aspect to this. We also need to verify if the property is as per sanctioning or no. While working with banks we have faced many such situations where the property was built in a different way than sanctioned by the authority. This in fact made the banks ask us to issue certificates for the flats if they are built according to the sanctioned plan or no. We take pride in stating that Sahasrabuddhe valuers were the first in the city to receive the honor of providing such certificates to the banks.
At Sahasrabuddhe valuers we give extra attention to the sanctioning & to the actual verification of the properties.
Still have doubts, write to us info@sahasrabuddhevaluers.com or send us a WhatsApp @9422007390
Happy investing