• Cancellation of Agreeement of sale for a flat

We made an agreement of sale with the Owner of the flat which I am currently residing for rent. We paid him 4 lakhs in advance and made the agreement for 90 days. I paid the stamp duty of .01% of the total price. However the Seller was not able to provide the necessary documents like property tax, Khata etc due to which I was not able to get approval for Home loan.

We contacted the Seller and got the agreement extended till 31st Dec 2016. Now the Seller is not ready to sell his flat and we too due to the activities of the seller decided to cancel the agreement.

The Seller is telling that he will return our advance (4lacs) after the agreement expiration by 31st Dec 2016. 

(1)Since this is mutually agreed cancellation what is the procedure involved for the same.

(2)Is it advisable to wait for the agreement to expire? 

(3)Do we need to send any registered letter before expiration of agreement on the same?

(4)What if the seller delays the payment?
Asked 7 years ago in Property Law
Religion: Hindu

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6 Answers

i presume agreement for sale is not registered

2) if agreement for sale is registered then deed of cancellation can be executed by consent of parties

3) since agreement is expiring on 31st December 2016 the seller can by letter inform you of cancellation of agreement and refund advance paid by you

4) if seller fails to pay inform the seller that since title is not clear and marketable no loan was sanctioned and to refund your advance money paid

5) if seller fails to pay file summary suit for recovery of your money with interest

Ajay Sethi
Advocate, Mumbai
95216 Answers
7611 Consultations

5.0 on 5.0

1. Since it is done with mutual consent you can do so in writing confirming the cancellation of agreement and receipt of your advance money.

2. There is no harm to wait till expiry though there is no restraint in law to cancel it earlier as well.

3. Since it is done mutually there is no such requirement.

4. If it delays the payment then you have file suit for specific performance of contract.

Devajyoti Barman
Advocate, Kolkata
22920 Answers
498 Consultations

5.0 on 5.0

1. Since this is a registered sale agreement, it is always better to execute a registered cancellation deed.

If there is no proper cancellation deed, then the vendor will face problems in future and not the buyer.

2. As the vendor has made his intention clear that he will not be willing to ell the property and also since you too are not for buying the same, you can ask him to cancel the agreement today itself and return your advance amount held by him.

3. You have to go through the conditions of the sale agreement for this clause, if it is required then you may play a safe game by sending an intimation about your proposal to either cancel or go ahead.

4. You may send a legal demand notice to him after which you can proceed legally against him.

T Kalaiselvan
Advocate, Vellore
85416 Answers
2239 Consultations

5.0 on 5.0

Dear Sir.

In This situation ...you can file the criminal complaint against owner....and write down all the facts of your agreement ...there is no right to seller to cancel the agreement ...cancellation took place only....when both the parties are agree...



Feroz Shaikh
Advocate, Navi Mumbai
407 Answers
58 Consultations

4.4 on 5.0

1. A cancellation deed should be executed mutually by the parties if there is mutual cancellation.

2. If the seller has said that he will return the amount after 31st Dec then wait till then as it is not far away.

3. Do immediately issue a lawyer's notice to the seller to inform him that you are cancelling the agreement due to the failure of the seller to provide the documents of property for inspection.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

Before officially communicating with the seller about the cancellation, ask the seller to issue to you a post dated cheque for a sum of Rs.4.00 lakhs payable in the first week of January 2017. After receiving this cheque then issue a notice of cancellation to be sent by you through registered letter with acknowledgement due. Do this before the expiry date.

If thereafter the seller delays in honouring the cheque, you can initiate 138 proceedings against him and also file suit for recovery of money together with interest and litigation costs.

Kiran N. Murthy
Advocate, Bangalore
1298 Answers
194 Consultations

5.0 on 5.0

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