Amitabh Bachchan's next door bungalow up for sale. Reserve price set at ₹25 crore

Amitabh Bachchan’s Juhu home's neighbouring bungalow is being auctioned under the SARFAESI Act, according to a recent public notice

Amitabh Bachchan may soon have a new neighbour. Deutsche Bank has issued a public notice that says it plans to auction a bungalow located next to Amitabh Bachchan's property named Jalsa in Mumbai's Juhu area.

Amitabh Bachchan’s bungalow Jalsa's adjoining property will be put for auction on March 27.(Pixabay)

The property’s size is almost 3339 sq ft. It is located in JVPD, Kapole Society in Ville Parle West. The reserve price for the prime property is ₹25 crore.

The auction is scheduled to take place on March 27.

Deutsche Bank had taken over the property after Seven Star Satellite Pvt Ltd along with others failed to repay the outstanding amount of ₹12.89 crore within 60 days, the public notice accessed by Hecta, a platform that connects buyers to distressed properties put up for auction by banks, had said.

The property is being auctioned under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) of 2002, a public notice issued by Deutsche Bank in February had said.

Several banks auction real estate properties in a final attempt to recover their dues after borrowers fail to repay their loans and the banks are forced to initiate recovery proceedings against them.

Apart from this Juhu bungalow, a commercial space is available on sale in Parinee Crescenzo building in Bandra East, next to a famous Japanese and Korean restaurant in Bandra Kurla Complex. This property has been listed for auction by Yes Bank for a reserve price of ₹21 crore on March 19, according to details shared by Hecta.

The total area of the restaurant space that is up for auction is 4,310 sq ft (carpet area) and comes with two car parkings. The property is being sold under SARFESI Act by Yes Bank, details shared by Hecta showed.

What to keep in mind while buying properties through bank auctions

Here’s what buyers wanting to participate in such real estate auctions should keep in mind before bidding for such properties.

1 Most of these properties are available at a discount to market price as these are auctioned by banks only after the loan borrower misses multiple payments and the lender auctions the property to recover the outstanding principal and interest amount on the loan.

2 Buyers wanting to procure these properties through a bank auction should verify details of the property, especially the legal details, before they decide to bid for them.

3 According to Sridhar Samudrala, founder and CEO, Hecta, a platform for buying properties from banks through auctions, high networth buyers wanting to buy such properties should be aware - that the reserve price quoted excludes dues (such as electricity, property tax, maintenance), which are payable by the buyer. The prospective buyer should also check for physical possession status of the property, whether the physical possession has been obtained by the bank advertising the sale, after following the due process.

4 These properties are sold on ‘As is where is’ basis or ‘Whatever is there is’ or ‘No recourse basis’ which means that the buyer needs to check the inclusions and exclusions and cannot withdraw from the deal once the auction is over (unless due to exceptional legal circumstances), he explains.

5 In case of bungalows or apartments that are auctioned, buyers should check if there are any liabilities associated with the properties that are being auctioned. Buyers should check if the original owner has paid his dues, maintenance charges to the housing society or has any house taxes pending against him. Prospective buyers should also check if the property has been sublet or not, says a legal expert.

6 If a buyer plans to take a loan for purchasing the property, he should try and get in-principle home loan approval from the lender. Banks give such loan approvals solely on the basis of the credit history and repayment capacity of the bidder, said a banker.

7 It is advisable for buyers wanting to purchase properties under the SARFAESI Route to ensure that (i) the bank has taken actual possession of the asset in terms of the SARFAESI Act, (ii) the defaulting owner has not initiated any litigation, including on account of unfair reserve price, and (iii) the bank has procedurally followed the prescribed timelines under the SARFAESI Act, including demand notice to the defaulting owner, public notice to prospective purchasers and payment obligations, adds Avnish Sharma, Partner, Khaitan & Co.

Last but not the least, while most of these properties are available at a lower rate than the market price, buyers should not be carried away by the discounts.