MODT Full Form: Everything You Need to Know

A home loan certainly makes it easier for you to deal with the home-buying process. However, arranging for the necessary finance is only a part of home ownership. You’re also required to have certain important documents in place to ensure that there are no legal or financial complications later.

MODT, or the Memorandum of Deposit of Title Deed, is one such document that your bank or loan agent may demand from you. In this blog post, we'll cover everything you need to know about the MODT full form, why you need it, its features, importance, and much more.

What is MODT Full Form?

MODT full form is Memorandum of Deposit of Title Deed. It is a legal document that acts as proof that the borrower has deposited the original title deed of the property with the lender.

When you apply for a home loan or a loan against property, the lender or bank asks you to submit your property documents as collateral for the loan. However, rather than making a full mortgage deed, banks in the majority of states (such as Maharashtra, Tamil Nadu, Karnataka, etc.) request you to execute a Memorandum of Deposit of Title Deed (MODT).

This legal document confirms that you have deposited your property title deed with the bank. It is registered in the Sub-Registrar's Office. After registration, your lender gets full legal authority over your property in case you default on your loan.

What are the Features of MODT?

Here are some of the key features of the MODT you must know as a borrower:

• Legal Evidence: It provides legal evidence that you have submitted your property papers to the bank as collateral for a loan.
• Registered Property Document: MODT is registered with the Sub-Registrar of Assurances.
• State-Specific: Not every state makes it compulsory to execute the MODT. There are certain states, like Kerala, Rajasthan, etc, that have different procedures for the execution of a mortgage.
• Borrower's Loan Agreement: The borrower signs the MODT, which includes details such as the loan amount, nature of the property, and the bank's name.
• MODT Charges: You must pay certain MODT charges, such as stamp duty and registration fees. These MODT charges differ from state to state and depend on your loan amount.

MODT vs MOD vs Registered Mortgage

MODT is among the many documents that a lender asks for when applying for a home loan, and it is easy to confuse with MOD and a registered mortgage. There are, however, various differences between MODT vs MOD vs Registered Mortgage. They are as follows:

Parameters	MODT	MOD	Registered Mortgage
Definition	Agreement documenting deposit of title deeds	Document proving deposit of title deeds	Mortgage deed registered with sub-registrar
Purpose	Record deposit of property title deed	Acknowledge deposit of property title deed	Registered mortgage deed
Legal Status	Non-registered equitable mortgage	Non-registered equitable mortgage	Formal registration required
Charges	0.1-0.5% charges	0.1-0.5% charges	higher costs: 1% registration + stamp duty

Why is MODT Important?

Suppose you have taken out a home loan of ₹40 lakhs. Your lender will disburse the loan amount to you, but they may also ask you to pledge an asset as security. It covers the loan amount in the event that you default on the loan, and the lender will sell or liquidate your property during the term of the loan.

This is where the MODT deed proves beneficial for the process of lending. It creates a legal charge in favour of the lender and gives them the right to the property in case you default on the repayment. Here are some reasons why an MODT holds significance:

• Security for the Bank/Lender: The MODT deed confers the rights of the lender in law over the property. If you fail to repay the loan, the bank can seize the property and sell it to recover the loan amount.
• Protection to the Borrower: The MODT deed does not transfer ownership to the lender. It is only charged as collateral. This is why the lender cannot willingly sell the property until the terms are not met.
• Essential for Loan Release: Under normal circumstances, the bank will not disburse the entire loan amount until you register and sign the MODT.

Benefits of the MODT Deed

The importance of the MODT deed extends beyond just the legal requirement. Here are the benefits of MODT you must know:

• Quicker Loan Procedure: MODT is simpler and faster than an ordinary home loan agreement.
• Legally Protected: When registered, both the lender and the borrower are legally protected.
• Clear Terms of Ownership: It means the property is in the lender's temporary possession as security.
• Ease of Recovery of the Loan: In case of default, the lender does not have to go through the lengthy court processes, as they already have MODT as proof.
• Peace of Mind: All details are clear and registered formally.

How to Submit a Memorandum of Deposit of Title Deed Online?

Suppose you have taken out a home loan, and now you want to e-register your MODT. Before you can register it, you will need to get a Notice of Intimation (NOI) from your bank or lender.

What is NOI (Notice of Intimation)

NOI stands for Notice of Intimation, which is a notice that notifies the Sub-Registrar of Assurances that the property has been mortgaged in favour of the bank or lender, and the home loan has been disbursed. The practice of issuing a notice of intimation has been in place since April 1, 2013.

NOI must be filed within 30 days of the first loan disbursement. As a borrower, you need to cover the NOI charges, which include a ₹1,000 filing fee + ₹300 document processing (offline). You can apply for NOI online through the GRAS portal. Failure to file within 30 days results in penalties under Section 89C. Here's how to e-file NOI:

• Gather Necessary Papers: Gather property papers, loan sanction letter, identity proofs (Aadhaar, PAN), and the letter of intimation by your lender.
• Register or Log In: Go to the e-filing portal of the state (e.g., Maharashtra IGR GRAS portal or your lender online portal).
• Fill in Details: Fill in the form with property, borrower, lender, and loan details.
• Upload Documents: Upload all the necessary supporting documents, and in case required, biometric data or photographs.
• Pay the Stamp Duty: The amount of Stamp Duty due at the time of registration is determined by the value of the property. As soon as you purchase the property, you must pay the stamp duty.
• Attach Passport-sized Photos: When submitting a notice of intimation for a house loan, you must include the lender's passport-size pictures and their signature or fingerprint.
• Verify the Stamp Duty: To improve the document's reliability, you must authenticate the stamp duty with the relevant bank official by signing and sealing it.
• Get Confirmation: Once you have submitted, you will get a confirmation receipt or acknowledgement, which can be saved in your records.

Steps to Submit a Memorandum of Deposit of Title Deed Online

Step 1: Get the NOI from your bank

Request the NOI from your lender. They typically provide it after they release the loan.

Step 2: Go to your state's registration department website

Every state has its own dedicated website. For instance:

• Maharashtra: igrmaharashtra.gov.in
• Karnataka: kaverionline.karnataka.gov.in

Step 3: Search for the MODT/NOI e-filing page

Search for "MODT Registration" or "Notice of Intimation Filing."

Step 4: Enter borrower and property details

Enter personal details, loan details, bank name, and property address.

Step 5: Select the payment mode for stamp duty

You can typically pay through:

• E-payment (net banking/UPI)
• Challan (printed and paid from specified bank branches)

Step 6: Upload the required property documents

Attach the NOI and any other supporting papers, such as the title deed.

Step 7: Submit the form online

After submitting, you may be required to go to the Sub-Registrar's Office physically.

Step 8: (Optional) Get your bank to do it

Some lenders may handle the e-filing of the MODT on your behalf. You can speak to your bank for this.

Note: The online process offers more convenience in filing NOI, but it still requires physical verification. Final verification usually takes place offline.

How to Submit the MODT Deed in Physical Form?

There are many states in India that provide the option to submit the MODT deed online. However, if your particular state doesn't have that facility or if you want to do it in person, then here's what you need to do:

Step 1: Collect your NOI from the lender

The very first step is collecting the Notice of Intimation (NOI) from the lender from which you took the home loan.

Step 2: Go to the Sub-Registrar's Office

Once you have the NOI, go to the nearest sub-registrar's office in your state.

Step 3: Fill out the right form

You will have to fill out a MODT form and attach the NOI.

Step 4: Pay stamp duty

You cannot pay the registrar directly for it. Instead, approach an authorized bank, provide proof of ID, and pay the duty.

Step 4: Get proof of payment of stamp duty

The bank will provide a stamped challan or receipt as proof of stamp duty payment.

Step 5: Send these documents to the Sub-Registrar

You must have the following documents in your possession:

• The completed MODT form
• NOI
• Challan proof
• Any other documents they might require

Step 6: Registrar verifies and registers the MODT

After checking your documents, the registrar will register your MODT and issue a copy.

How to Cancel MODT?

If you've paid off your loan, then you should get your property released from the MODT. Here's how to cancel it:

Step 1: Get a No Objection Certificate (NOC)

Your lender will issue this once your home loan is fully paid. It should include:

• Your name
• Property details
• Loan account number
• A statement declaring that there are no pending dues

Step 2: Request a 'Deed of Receipt'

This notice assures the lender that all dues have been received and that they have revoked the MODT on their part.

Step 3: Go to the Sub-registrar's office

Produce both documents (NOC and the Deed of Receipt) at the Sub-Registrar of the place where your property is registered.

Step 4: Request lien removal

The registrar will cancel the MODT entry, and your property will be officially debt-free and unencumbered.

When do you need to get the MODT?

You'll need to file a MODT if you're taking any of the following:

• Home Loan
• Loan Against Property
• Commercial Property Loan
• Construction Loan

In short, whoever is providing collateral on a property to a bank or financial institution will be required to get a MODT registered (if the state requires it).

MODT Charges and Registration Fees

Here are the most common charges associated with the Memorandum of Deposit of Title Deeds:

• The amount of charges a home loan attracts is normally between 0.1 and 0.5% of the amount of money being borrowed, and this is the range that is applicable in most states (Maharashtra and Karnataka) and financial institutions.
• The stamp duty that needs to be paid on the MOD deed agreement is usually limited to ₹25,000, as per your statement and also as per official registration fee schedules.
• For a loan of ₹50 lakhs, the interest charged by MOD at 0.3% would be 15,000 (50,00,000 x 0.003 = 15,000), which is below the cap.
• Banks can add extra fees like administrative fees, processing fees, custody fees, and insurance fees to the charge itself. This is charged directly to the borrower, which is a standard practice in the industry.

Suggested:

State	MODT Charges	Registration Fee
Karnataka	0.5%	0.1%
Tamil Nadu	0.5%	1%
Maharashtra	0.1-0.3%	1%
Andhra Pradesh	0.1-0.5%	1%
Rajasthan	0.2%	1%
West Bengal	0.2%	1%
Delhi	0.1-0.5%	1%
Kerala	0.25%	2%
Telangana	0.2%	1%
Gujarat	0.2%	1%

Conclusion

The MODT may sound like any other jargon term, but actually, it is an essential part of the home loan process. Whether you're purchasing a house or securing a loan against a property, it safeguards your interests as much as the bank's.

The MODT is an official, state-level document that proves you've deposited your title deed with the bank as loan collateral. The process to get it is easy, but you need to be careful with documentation and stamp duty.

FAQs about MODT Registration

1. Is MODT mandatory for all home loans?

No, it depends on the state. Some states mandate MODT registration, while others follow different processes.

2. Can I take another loan on the same property if MODT is active?

No. Not unless the current loan is cleared or the bank gives permission. MODT restricts your ability to use the property as collateral again.

3. What happens if I don’t register the MODT?

Your loan disbursement may get delayed or denied. In states where MODT is mandatory, skipping it is not an option.

4. Can MODT be filed online?

Yes, many states now offer online MODT registration. However, you may still need to visit the Sub-Registrar’s Office for verification.

5. Who pays the MODT charges?

Usually, the borrower pays these MODT charges, unless the lender makes a different arrangement.