1) you cannot be forced to enter into MOU
2) inform purchaser that you don't want to enter into MOU but are comfortable signing sale deed only
3) since no advance money is being received it makes no sense in signing MOU
MOU in a land deal
We have a land in Karnataka State in a prominent city. It is inherited by 12 of us by way of a Will of an aunt. A buyer has approached us. Price agreed. We told him we want only outright sale (without an interim sale agreement). He agreed. After legal scrutiny of our papers by his Lawyer, he is asking a Memorandum of Understanding (MOU) in a Rs200 stamp paper. The sale will be within one month and there is a damages clause for a payment if either party fails to execute the sale deed. There is no advance money. The MOU will be null and void after the sale / date. Their Lawyer had written very strict language to which we objected and we re-drafted it our own simple language. Still some of our beneficiaries are afraid to sign an MOU in a stamp paper. Is it safe?
Asked 7 years ago in Property Law
Religion: Hindu
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7 Answers
1. DO not go for MOU.If agreement fails you will be in sweep if the buyer wishes to entangle the property.
2.Rather get into sale agreement and receive a big amount and no token amount as advance.
3. Make a clear time line for balance ayent so sale deed is executed within that time only in dafult wo whch you can cancel the agreement.
4. Registration of dale agreement is advisable.
5 I can not advise to go for MOU for sure.
Hi, Normally before entering into sale deed either agreement to sell or MOU is entered between the parties and it is normal procedure, if you want to safe guard your interest better engaged any advocate and get opinion from him.
If no advance is paid, then MOU with damages clause can be removed altogether. Only if token advance is paid then damages clause can be retained.
If this is done, then it is safe to sign.
If you have refused to execute a sale agreement for the proposed sale then there is no need for a MOU either.
In fact the recitals in the MOU should be beneficial to both the side and it should not be lopsided.
You have all the rights to reject such MOU especially when the co-sharers are not willing to enter into such an agreement in the disguise of MOU.
You may ignore this arrangement and go for the execution of sale itself directly especially when the buyer is not ready to pay any advance amount for this purchase.
A lady lawyer who was introduced through a friend was the Broker who brought this case. She told me it is perfectly safe to give an MOU on stamp paper. But I said NO. At last we gave an MOU on plain paper with a clear end date (which passed already). But nothing happened, except she showed me a newspaper Notice of intention to buy (which will cost about Rs20,000). The so-called buyer keeps on telling stories and no sale is done. After some weeks this same lady advocate brought us another "deal". She pressed me to give the photocopies of all our documents. She told me of some financial difficulties in her home and the need for getting commission from the sale of our property. Believing her story, I gave asked her to proceed and gave her photocopies. But no MOU, no agreement, no token. She told the "client" fixed a date of purchase and even gave plane tickets to some of us (Cost about Rs20,000) who came to the city for registration. But nothing happened on the planned date of registration. We lost our time and money. She started telling stories. Through a friend of hers, I came to know that a magistrate court has recently sentenced her to 2 years imprisonment for criminal assault in a case involving property dispute in her home town. (She was among 5 members of her family who attacked as per the report in Times of India). It seems she is appealing to higher court. My doubt is: Once convicted, is she still an advocate as per Laws of Bar Association? What she gets from bringing bogus clients and making such dramas of non-existent sales? (I already decided not to deal with her anymore) Can she misuse the photocopies for some other purposes ? I have a doubt that she may be using the copies to make a legal report of 2 or 3 properties to her client The client will buy one of the properties (not ours). She and her senior may be getting a heavy fee for this work. Is it possible.? Please advise me.
Asked 7 years ago
1) it is possible that with photocopies fabricated documents can be prepared
2)lady must have sought stay against her conviction pending hearing and final disposal of appeal
3) hence she can continue to practice ifstay is granted by appellate court
All your doubts and suspicions about that so called lady lawyer are justified especially in the present circumstances.
You need to be very careful abut this in the future.
You can give a newspaper advertisement stating that you have given the photocopies of the property papers to this person who is suspected to misuse hence the general public are warned to not to deal with the said property in any manner with the said person or her associate without the knowledge of the person who has given this publication.
This type of warning may help you to safeguard your interests in the property.