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Property e-auction, also known as online property auction, is a method of selling real estate through an online platform. In a property e-auction, the seller, often a bank, financial institution, government agency, or private entity, lists properties for sale on a designated website or auction platform. Interested buyers can then participate in the auction by placing bids electronically, typically over a specified period of time.
The process usually begins with the seller setting a reserve price, which is the minimum amount they are willing to accept for the property. Potential buyers register on the auction platform and may be required to submit certain documents or fulfil eligibility criteria. Once the auction commences, participants can bid on the properties they are interested in, with bids typically increasing incrementally.
UCO Bank has initiated the process of e-auction to recover outstanding debts from borrowers by selling properties pledged as collateral against loans. Scheduled for March 15, 2024, from 11:00 am to 5:00 pm, the e-auction encompasses 30 properties spread across various states in India. These properties, located in states such as Bihar, Tamil Nadu, West Bengal, Punjab, Odisha, Rajasthan, Karnataka, Uttar Pradesh, Jharkhand, and Gujarat, are being offered for sale to the highest bidder.
Among the properties listed for e-auction, there is a mix of symbolic and physical possession. Symbolic possession involves the legal recognition of the buyer's rights to the property without immediately displacing the current occupant. This arrangement is in accordance with the provisions of the SARFAESI Act, which grants secured creditors the authority to seize assets if borrowers fail to settle their outstanding dues. Seizure can occur through physical means or by appointing agents to manage the assets on behalf of the creditor.
The Earnest Money Deposit (EMD) plays a vital role in the e-auction process. Typically constituting a percentage of the Reserve Price, which represents the minimum value set by the bank or seller for the property, the EMD ranges from 5% to 10%. In this instance, the properties included in UCO Bank's e-auction have reserve prices ranging from Rs. 8 lakhs to Rs. 70 lakhs, making the EMD an essential consideration for potential bidders.
Property e-auctions offer several advantages, including convenience, transparency, and the ability to reach a wide audience of potential buyers. Additionally, they can streamline the buying process and provide opportunities to purchase properties at competitive prices. However, it's essential for buyers to conduct thorough due diligence on the properties they are interested in and understand the terms and conditions of the auction before participating.
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