The flat was exactly what the buyers wanted: the right floor in Mirpur, light in the afternoon, a building whose committee kept proper accounts. Then the seller mentioned, almost in passing, that the flat still had a home loan on it. The buyers froze. Their first thought was that a loan meant trouble. Their second thought, the better one, was to ask how much was left, and to whom it was owed. A flat under a loan is not a flat to avoid. It is a flat to buy in a different order.
This is common in Dhaka's resale market. Sellers often buy with a loan, repay for years, and sell before the term ends, sometimes to move to a larger home, sometimes to leave the city. The bank, meanwhile, holds the original deed as security until the loan is cleared. That single fact shapes the whole deal: the seller cannot hand over a clean title until the bank is paid, and the buyer should not hand over the full price until the bank has been.
Find out what the bank is owed
Before any money moves, the buyer should know three numbers: the outstanding loan amount, including interest up to the settlement date; any overdue amount, if the seller has missed instalments; and the bank's own charges for early settlement or for issuing clearance, if any. These figures come from the bank, not from the seller's memory. Ask the seller to obtain a written loan statement and a settlement figure from the lending branch, and have your lawyer read both. A seller who hesitates to produce the bank's own letter is giving you information too, of a kind you should not ignore.
At the same stage, ask for the bank's no-objection certificate, the NOC, for the sale. Banks issue an NOC when they agree, in principle, that the property may be sold and that the loan will be settled from the sale proceeds. The wording matters. An NOC that merely says the bank has no objection to the sale is different from one that states the settlement figure and the release procedure. Your lawyer should check which one you have.
Pay the bank, not just the seller
Here is the sequence that protects a buyer. The sale price is split in the agreement: one part goes to the bank, to clear the loan in full, and the rest goes to the seller. The payment to the bank should be made directly, by pay order or bank transfer to the loan account, in the presence of the parties or through their lawyers, and the receipt should name the loan account and the flat. Paying the entire price to the seller and trusting them to settle the loan afterwards is the mistake this whole piece exists to warn against. Once the seller holds the full amount, the buyer's power over the bank's release is gone.
Where the buyer's own home loan is involved, the two banks can settle between themselves, with the buyer's bank disbursing against the clearance. That three-way coordination takes longer, and the agreement should allow time for it, rather than setting a registration date the banks cannot meet.
Collect the release papers
After the bank is paid, it issues the clearance documents: a loan clearance or no-dues certificate, and the release of the original deed that it held as security. Collect the original deed itself, not only a certificate about it, and check that it is the same deed named in the sale file. The bank's release letter should state that the mortgage on the flat stands discharged. Only then does the file become an ordinary sale file again, ready for the sub-registrar.
This is also the point to re-check the rest of the title with fresh eyes. A loan on the flat does not excuse the standard checks: the deed chain, the mutation record, the seller's right to sell, and the building's approvals. A mortgaged flat that passes those checks and arrives with a bank release is, in the end, no riskier than any other resale. A flat whose loan papers are vague, or whose seller resists the bank-first sequence, is a flat to walk away from, however good the light in the afternoon.
What a careful agreement carries
A sale agreement for a mortgaged flat should name the lending bank, the loan account, and the settlement figure, and should state the payment split, the deadline for the bank's clearance, and what happens if the bank's figure changes with interest before settlement. It should state who bears the bank's settlement charges. It should set the registration date after the release, not before it. These clauses are not legal decoration. They are the difference between a deal that closes cleanly and a dispute about who was supposed to pay whom.
A flat with a loan on it is a normal part of a mature resale market, and buyers who learn the sequence need not fear it. Ask the bank, not only the seller. Pay the bank directly. Collect the release and the original deed. Register only when the file is clean. Follow that order, and the flat you liked on a Friday afternoon becomes, in law and in fact, yours.
