A tripartite agreement is the most important legal document involving the buyer, the bank and the seller. This is the document that is needed when a buyer opts for a home loan to buy a home in a basic project. “Tripartite agreements have been reached to help buyers acquire home loans against the proposed purchase of the property. As the house/apartment is not yet in the client`s name, the owner is included in the agreement with the bank,” said Rohan Bulchandani, co-founder and president of the Real Estate Management Institute™ (REMI) and Annet Group. “In the leasing sector, tripartite agreements can be made between the mortgage lender/lender, the landlord/borrower and the tenant. As a general rule, these agreements stipulate that if the owner/borrower violates the non-payment clause of the loan agreement, the lender/lender becomes the new owner of the property. In addition, tenants must accept the mortgage lender as their new owner. The agreement also prevents the new owner from amending tenant clauses or provisions,” Bulchandani adds. Assuming it is comfortable with the broker, a lender can probably live with the priority of close-out clearing and broker security rights, as they are applicable to specific hedging trades. The lender is interested in insuring the net profits of the client on these hedges, in contrast to the customer`s losses due to the broker. One of the lender`s concerns is that the broker and client may engage in other unrelated futures. The brokerage agreement generally provides that the broker`s clearing and margining rights apply to all accounts, so that the broker can use a surplus on one account to compensate for a deficit on another account.
In order to prevent the security gains from being used to cover other losses, the lender will likely require (1) that the transactions that finance that lender be held in a separate account and (2) the broker`s hedging and margining rights apply to that account from all other accounts held by the client with the broker. Long coverage includes purchases of future deliveries (long-term positions) that do not exceed their physical exposure to the product with respect to hedges fixer fixed-price sales and expected 12-month unmet requirements for processing or manufacturing.