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Property Sale agreement
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Property Sale agreement
A Property Sale Agreement with respect to properties is an important document which a document that precedes Sale Deed. It is an outline process before the actual sale. The contents of Sale agreement basically include Terms & Conditions between Seller & Buyer before the sale of property in a same manner and in the same sense and with a free consent. Sale agreement governs the whole property transaction as to the amount to be paid/partly paid/or promised to be paid in future and is valid even after the sale.
WHAT IS A PROPERTY SALE AGREEMENT?
A Property Sale Agreement with respect to properties is an important document which a document that precedes Sale Deed. It is an outline process before the actual sale. The contents of Sale agreement basically include Terms & Conditions between Seller & Buyer before the sale of property in a same manner and in the same sense and with a free consent. Sale agreement governs the whole property transaction as to the amount to be paid/partly paid/or promised to be paid in future and is valid even after the sale.
INDEMNITY CLAUSE IN PROPERTY SALE AGREEMENT
Due to sudden rise in property/land prices especially in metro cities, lot of properties are under legal litigation. These legal cases go on for decades. Some of the most common reasons for legal disputes are
Property was transferred under force/influence/coercion
Legal heirs of Seller claim their right on property.
Almost 40% properties in Bangalore are under legal dispute. The indemnity clause in Sale Agreement indemnifies the buyer against any legal dispute / legal defect in the property. Also mention that in case of any legal dispute in future, the seller will compensate the buyer for any loss incurred by the buyer at the then prevailing market rate. This clause should be drafted carefully & should include all possible scenarios.
DOCUMENTS REQUIRED FOR SALE AGREEMENT
The documents required for drafting of Sale Agreement are as follows:
· Important property details and relevant documents like buyer's & seller's Identity Proof and their PAN details.
· Address proof of both the parties.
· The current property value of the concerned property to sale.
· The title deed/Sale deed,
· Khatha documents,
· All the latest Tax Paid receipts etc.
PENALTY CLAUSE
At the time of signing Sale Agreement, Buyer pay X amount as token money. Standard clause is put in agreement that if buyer will back out from the deal then entire token amount will be forfeited by seller. I would suggest to add another line in this clause that in case seller will back out from deal then Seller will return the token amount paid by buyer along with equivalent amount as penalty. If this clause is not put then seller will keep searching for new buyer who can pay extra. He will call off the deal, if he gets new buyer at higher rate before execution of Sale Deed.
RIGHT TO CALL OFF THE DEAL
As a buyer you should reserve the right to call off the deal under certain circumstances without being penalized financially. Some of these circumstances are as follows
If Seller fails to provide legal/statutory property documents required by the Buyer
If the Buyer find out any legal defect in property before execution of sale deed
If Buyer’s home loan is rejected by bank due to some legal/statutory issue in property/property documents
If the seller fails to provide all original documents at the time of execution of sale deed.
HOW CAN ACREOK HELP YOU?
ACREOK, believes in efficient and quality services with best professional guidance. We simply collect some basic information from the parties as soon as you place a request on us and you’ll be good to go in no time. ACREOK, serves you at door-steps with a reasonable and resourceful approach. So, GET READY and SAY ACREOK!
Frequently Asked Questions
An agreement for sale, is an agreement to sell a property in future. This agreement specifies the terms and conditions, under which the property in question will be transferred. The Transfer of Property Act, 1882, which regulates the matters dealing with the sale and transfer of house property, defines the contract for sale or an agreement for sale as under:
“A contract for the sale of immovable property, is a contract that a sale of such property shall take place on the terms settled between the parties” – Section 54. Section 54 further provides that “It does not, of itself, create any interest in or charge on such property.”
Signing an agreement for sale becomes important in light of several factors. First, this is a legal proof of the buyer and seller entering into an agreement, based on which the future course of action would be decided, in case of a dispute. Also, if you are applying for a home loan, the bank would not accept your application till you sign an agreement for sale.
An agreement for sale is a promise in future, that the property will be transferred to the rightful owner while sale deed is the actual transfer of property ownership to the buyer.
What the sales agreement creates, is a right for the purchaser to purchase the property in question on satisfaction of certain conditions. Likewise, the seller also gets the right to receive the consideration from the buyer on complying with his part of the terms and conditions.
In case of failure of the seller to sell or hand over possession of the property to the buyer, the buyer gets a right of specific performance, under the provisions of the Specific Relief Act, 1963. A similar right is available to the seller under the agreement, for seeking specific performance from the buyer.
Yes,you can recover the amount though the Sale Agreement. Firstly, issue a legal notice of 30 days to the person who has taken the moneythereafter by filing a suit for recovery of paid amount with interest as the agreement cannot be executed.
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