In Janu 2024, we agreed to resale our flat to one buyer through a broker. The flat under consideration is self-occupied but is not mutated and neither are the property taxes paid. The home loan on the property is still running. The verbal agreement was that the buyer would pay a sale consideration of 62.75 lakhs with an advance payment of 10%. The seller will clear all liabilities on account of government taxes & Loan on or before the final deed or registry. The possession of the Flat was 90 Days from the Date of the final deed / Registry as we needed to shift to a new house. However, The buyer transferred only 51000/- stating the balance amount would be paid at the time of signing the sale agreement however, he was not reachable for 15 days due to illness. On the 16th day, he demanded our KYC & Property Documents to process the sale deed, which we refused to provide as the sale agreement was supposed to be signed before the sale Deed along with the agreed advance amount On the 26th day, after regular follow he stated that he was unaware that a sale agreement and a sale deed are two different things. On the 52nd day, after discussion and coming to a consensus on the clauses of the agreement, it was mutually decided to sign the agreement after Holi as it is considered an unauspicious period. In the meantime, the buyer was supposed to have the sale agreement ready for signatures. On the 62nd Day, we came to know that the agreement was still in draft mode On the 72nd Day – they asked for some more time stating that the agreement was ready but he was awaiting for funds. on the 91st Day - as there was no sign of agreement from the last 90 days we contacted the broker to look into this & he arranged an updated copy of the agreement, which was completely different from the one we had discussed at the beginning of the deal. The copy of the Sale Agreement stated that all liabilities were to be paid and cleared before "EXECUTION OF THIS AGREEMENT" & "BEFORE SIGNING THIS AGREEMENT" in place of the Sale Deed / final registry.The changed terms mean we need to clear our Home loan, and property tax & hand over the possession of the flat before signing the sale agreement itself. We asked them to replace these words with "BEFORE REGISTRY" OR "SALE DEED", which he refused by stating "execution of this agreement" means after registry only." & he wanted to cancel this deal and refund his advance amount or else he will take this matter to court if we don't agree on these words. As this is a self-occupied property that we had to vacate, we had finalized to buy another house property and have committed to the other party. With this backing out of the buyer, it has put me under immense financial stress. Also, we had held the property for more than 100 days with a token amount of mere 51000/- in good faith and had foregone other prospective buyers. Can anyone suggest whether the buyer is legally eligible for Refund & Our Rights
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1) it is difficult to prove oral agreement
2) if there is forfeiture clause then only you can forfeit the advance amount
3) you can file suit for specific performance to direct buyer to pay balance amount
4) express your willingness that execute registered sale deed
Dear client, you can file a case in the court for specific performance from the buyer. You can also claim damages from his delay and causing mental agony.
There was no formal agreement to sell entered between you both hence you cannot claim that you had kept the property on hold.
Once you saw that the buyer is delaying the process unnecessarily, you could have informed about it and looked for some other buyer.
In the absence of any agreement between you both, it would be illegal for you to deny the refund the payment of advance amount received by you.
At the maximum you can deduct 10% of the amount towards waiting period and administrative costs.
Your conditions to sell the property is practically not feasible because no buyer would be willing to wait for three months to take physical possession of the house property after paying full sale consideration amount getting the property registered on his name.
At least you should have agreed to pay three months rent for the property after having sold it to the buyer which can justify or make some sense.
You cannot thrust your liabilities on the buyer and the buyer is not obliged to accept them.
Obtaining a token amount will not construe as a sale agreement hence you cannot approach court for any relief.
If you want to avoid legal disputes, you can settle the matter amicably.
The buyer is not right
As per the original contract he was required to make an advance payment of 10% using which you were to clear the taxes and home loan dues
All of this was agreed to be done prior to registration of sale deed
The draft sale agreement sent by buyer with altered terms are not binding on you
Even if no agreement is yet signed between you and the buyer you can still sue him for sticking to the original contract
As per law a verbal contract can also be enforced by filing a suit for specific performance
But filing a suit will unnecessarily lock your property in dispute which will slim your chances of getting new buyers
If you forfeit his 51k, that will also lead to a dispute
So my suggestion is, considering how courts function and how it takes time for matters to be finally resolved and adjudicated by court, it will be in your best interest that you refund his advance and look for new buyers rather than spending on litigation
If you had agreement to sale ir any written communication you can file suit and recover any loss occurred to you. You can also forfeit the token amount
