• Cancellation of property sale agreement by purchaser

I entered into a sale agreement duly notarised for selling my house in zirakpur at a cost of 46.90 Lakhs. The buyer paid 1 lakh by means of cheque and was required to pay the balance amount by 31 Dec 2017. He has verbally informed me that he is not in a position now to buy the house because his loan has not been approved. The clause that incase seller fails to make the payment by 31 Dec the contract stands terminated and advance given will be forfeited. I want to know a method that is legally tennable for cancellation of the sale agreement since I have another buyer ready to buy the property.
Asked 6 years ago in Property Law
Religion: Hindu

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16 Answers

Unregistered sale agreement has no value and need not be cancelled

Amit Pai
Advocate, Mumbai
53 Answers
3 Consultations

4.4 on 5.0

1) you have to wait till 31st December before you sell the property to third party

2) in alternative request purchaser to give in writing to cancel the deal as he is not interested in purchase of property and to refund the Rs 1 lakh given by him .

3) you can then sell the property to third party

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

If you wish to forfeit the advance amount of RS. 1 lac, you'll have to wait till 31 December.

If you do not want to wait, ask this seller to send a letter to you for cancellation of this agreement to Sale citing there in the reason he told you, that his loan couldn't be approved. Also ask him to request in this letter for refund of his 1lac advance. He should send this letter to you by a registered post.

Incase he does so, you can cancel this agreement and return his advance and keep a record of it. Thereafter you can enter a fresh dealing with a second buyer.

Vibhanshu Srivastava
Advocate, Lucknow
9588 Answers
303 Consultations

5.0 on 5.0

Dear Querist

It will be better to get a letter from purchaser regarding the cancellation of the sale agreement in which purchaser requested to you to cancel the agreement due to inability to buy the house and he wants the cancellation of this agreement, if he do that, then you can sell your property with another buyer, otherwise you have to wait till 31st Dec-2017 as mentioned in the agreement as informed by you.

Feel Free to Call

Nadeem Qureshi
Advocate, New Delhi
6307 Answers
302 Consultations

4.9 on 5.0

Dear Client,

Either your have to wait till 31th so the terms of the contract gets violated not non performance by the deemed purchaser or return the earnest money (1 Lac) through cheque so that repayment may be proved and execute the termination of contract deed, giving all details, payment mode and than include due to non approval of loan, both parties mutually agrees to cancel the agreement and the earnest money is return by cheque dates, number . this way u will be exonerate with the terms of agreement and can send the property anytime by your choice and profit.

Yogendra Singh Rajawat
Advocate, Jaipur
22596 Answers
31 Consultations

4.4 on 5.0

1) hence advised you to obtain letter from purchaser that he is not in position to arrange funds and deal be cancelled

2) in absence of any such written communication in case purchaser arranges funds before 31st december you would have to sell him the property

3)it is better to refund advance money received to avoid legal complication . you can fortfeit money only if purchaser fails to make payment by 31st December

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

There is a difference between sale agreement and agreement to sell. As such even agreement to sell has to be regiatered. It is void an initio if unregistered.

Amit Pai
Advocate, Mumbai
53 Answers
3 Consultations

4.4 on 5.0

Dear Sir/Madam, you have raise good question. As per your query, You should wait upto [deleted] and thereafter, you have to issued a legal notice to the said buyer willing to sale as on today, and also you have to quoted in the said legal notice if not come forward for buy with in the stipulated period ([deleted]), if he failed to do so, advance amount will be forfeited and stand as cancelled the said sale agreement as per law. After issuance of the legal notice, the said buyer given reply or not to reply for the same. .... this is a correct legal procedure... it will be avoid future litigation permanently.... if you want more advice in this regard... kindly contact me.

.... by Chandrashekhar Vithal Jadhav, Advocate & Law Consultant, Bangalore.

C. V. Jadhav
Advocate, Bangalore
545 Answers
18 Consultations

4.7 on 5.0

It will be problematic if u sell the property to some other person before 31 Dec

First you get a written by email or letter about cancellation of deal then take next step of sale

Or as per verbal communication record it and send him a legal notice through a advocate to forfeit the byana amount

If he will not reply within stipulated period

U can proceed further

Harsh Kumar Sachdeva
Advocate, Delhi
44 Answers
3 Consultations

4.3 on 5.0

Hi, you cannot enter in to an agreement , until 31 Dec .. It is advisable to mark your presence at the tehsildar office on 31 Dec , as a proof in future that you turned up for the execution of sale deed .. After 31 Dec , send him a legal notice to execute the sale deed within 30 days , otherwise you will be entitled to forfiet the amount and the agreement will stand canceled

Hemant Chaudhary
Advocate, Gurgaon
4630 Answers
67 Consultations

4.9 on 5.0

Under the given facts and circumstances, I am of the opinion that you should wait till 31.12.2017 and in case he fails to make the balance payment, his advance of Rs.1L will be forfeited. Go safe. Wait for two months to avoid unnecessary complications/litigation. An agreement is entered or cancelled when the intention of both the parties are bonafide. In your case, the other party will never give any thing in writing. However, he may agree to enter into an agreement for cancellation of the sale agreement in case you return him the advance of Rs.1 lakh. The whole mess is for refund of 1 lakh. It is you to decide to earn 1 lakh and enter into fresh agreement in Jan, 2018 or refund Rs.1 lakh and enter into fresh agreement with prospective buyer.

Dalip Singh
Advocate, New Delhi
1083 Answers
36 Consultations

5.0 on 5.0

If he's able to raise funds before 31 Dec, and presses you for performance of your part of obligation under the Agreement to sale, you'll have to sell him the property in lieu of sale consideration offered by him.

It's better you follow the advice already suggested.

Vibhanshu Srivastava
Advocate, Lucknow
9588 Answers
303 Consultations

5.0 on 5.0

I would advise you to contact the purchaser and ask him to give in writing that due to deficiency in funds, he is unable to go ahead and therefore the deal be cancelled.

Since the agreement will hold god till 31st December, if he arranges the funds you will have to sell of the property.

Anilesh Tewari
Advocate, New Delhi
18077 Answers
377 Consultations

5.0 on 5.0

If the purchaser fails to make payment till 31st December then you can forfeit the money otherwise in order to avoid legal complication I would advise you to return the money.

Regards

Anilesh Tewari
Advocate, New Delhi
18077 Answers
377 Consultations

5.0 on 5.0

Since the sale agreement is not by a registered document, it is not enforceable in law. However it can be treated as a receipt for the money received.

So if the buyer is not interested to buy this property, you may talk to him and get the agreement cancelled mutually, return his money and go ahead with the sale of property to the prospective buyer.

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

Firstly the cancellation clause in the agreement to sale specifies that if seller defaults his advance given will be forfeited. Secondly if agreement to sell is between two people should the cancellation agreement not also be between both the people, rather than just taking a letter from a seller. Lastly if suddenly before 31 Dec (date of final payment as per agreement) the seller raises funds and claims the property will it not be a problem. Pl advise the safest methodology.

Since the buyer has indicated that he canot buy this property and also as you have already found another person interested in buying your property why dont you talk to the buyer and get the unregistered sale agreement mutually cancelled by refunding his advance amount and then execute a sale deed to the new buyer.

Dont make simple things complicated.

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

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