• Agreement to sell

My client has entered into an agreement to sell his property for sum of Rs..XXX. Agreement is signed on Rs 100 non judicial stamp paper. It is neither notarized nor registered but does contain signature of two witnesses and also details of property dealer in one of the clauses.

Now, Five clauses amongst others in Terms of Agreement are :-

Clause No 1.	That sale consideration for rights and titles of seller in the said property is fixed between the parties at Rs..XXX, out of which the seller has acknowledged the receipt of a sum of Rs..XXX as advance amount in the following manner:-.

 (details of advance money are then given) 

Clause No 2.	The Buyer will also pay other part payment of Rs..XXX to the seller on or before DDMMYYYY

Clause No 3.	That the balance sale consideration of Rs..XXX will be paid by the buyer to the seller on or before DDMMYYYY. 

Clause No 8.	If buyer commits breach of the agreement, the seller shall be entitled to forfeit the entire earnest money paid by the buyer to the seller; and the seller will be at liberty to resell the property to any person. If the seller commits breach of agreement, he shall be liable to refund the double of earnest money received by him. 

Clause No 9. That in case any of the party hereto infringes any of the terms and conditions of this agreement, then the other party will be entitled to get this transaction enforced through the court of Law by specific performance of the contract at the cost of the party who has defaulted

Note : Advance amount mentioned in clause 1 is exactly 10% of total sale consideration while part payment mentioned at Clause 2 is approx 40% of total sale consideration. 

Specific Queries are as follows:-

1. Verbal discussions were held with buyer 10 days before the scheduled date of part payment and he had sought some more time and desires to club it with final payment. Is any notice in writing required to be given to him at this juncture; or for that matter after lapse of date of part payment in case he fails to make part payment ? (though informal communication through sms has already been made to his dealer to ask his client to pay as per scheduled dates. Moreover my client does not wish to give formal notice at this juncture)

2.	In case buyer fails to make the final payment, can advance amount paid by buyer be forfeited without any notice in view of clause 8 of agreement. Is the word 'advance amount' used in clause 1 has the same connotation as earnest money used in clause No 8. It is to note that advance amount mentioned in clause 1 was the initial 10% amount received at the time of entering into the agreement. 

3. Is any notice or intimation required to be given to the buyer or any legal steps be taken to forfeit the advance amount?

4. Alternatively Can my client sue buyer for specific performance in view of clause 9. If yes, how much time does it take to get the decision of the court - Long Drawn or straightforward?
Asked 4 years ago in Property Law
Religion: Hindu

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15 Answers

Q.Verbal discussions were held with buyer 10 days before the scheduled date of part payment and he had sought some more time and desires to club it with final payment. Is any notice in writing required to be given to him at this juncture; or for that matter after lapse of date of part payment in case he fails to make part payment ? (though informal communication through sms has already been made to his dealer to ask his client to pay as per scheduled dates. Moreover my client does not wish to give formal notice at this juncture)

Ans. It does not matter in case he clubs it with final payment. The sale deed will be executed and registered on making full payment and in case he fails to make the full payment before execution and registration of sale deed i.e. on due date, the amount of bayana money i.e. 10% will be forfeited.

2. In case buyer fails to make the final payment, can advance amount paid by buyer be forfeited without any notice in view of clause 8 of agreement. Is the word 'advance amount' used in clause 1 has the same connotation as earnest money used in clause No 8. It is to note that advance amount mentioned in clause 1 was the initial 10% amount received at the time of entering into the agreement.

Ans. Only bayana amount i.e. 10% will be forefeited.

3. Is any notice or intimation required to be given to the buyer or any legal steps be taken to forfeit the advance amount?

Ans. No notice is required to be given to the buyer. It is understood that he failed to make the full payment on due date. However, you have to get marked your presence in the office of Sub Registrar concerned that you visited the office of SR on the date of due, buyer did not turn up to get the sale deed registered and executed.

4. Alternatively Can my client sue buyer for specific performance in view of clause 9. If yes, how much time does it take to get the decision of the court - Long Drawn or straightforward?

Ans. Both clause 8 and 9 are contradictory. Once the 10% amount of advance is forfeited what remains to file suit for specific performance.

Dalip Singh
Advocate, New Delhi
1040 Answers
36 Consultations

5.0 on 5.0

1) send an email to purchaser to make payment on due dates

2) advance money can be forfeited in case purchaser fails to make final payment

3) . Advisable to issue notice to purchaser before forfeiture

4) suit fir specific performance can be filed but suit would take 15 years to be disposed of

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

1. Since clause say a thing and the buyer want to club the payment with final payment. On this note, a written agreement between the buyer and seller is required so that no problem arises later on.

2. A notice may be given with some tine as grace period. If after getting the Notice and time period, the buyer is not able to pay or reply to solve the problem then as per clause of agreement step can be taken.

3. A notice with seeking reply within a reasonable time can be given.

4. The seller can ask (in writing) the buyer to perform his duty. If still he fails then legal strp can be taken.

Moumita Mitra
Advocate, Kolkata
366 Answers
1 Consultation

4.0 on 5.0

No need of notice, an email or SMS will do. Yes generally a email or telephonic communication can be dropped and is ideal before forfeiting the money.

Yes he can be prosecuted for specific performance. The court time limit is discretionary and cannot be standard.

Prashant Nayak
Advocate, Mumbai
27275 Answers
88 Consultations

4.4 on 5.0

1. Kindly reach out with a written communication for payment through reminder as letter or email . Send a letter writing that kind reminder that your peyament in lieu of our agreement is due on so and so date kindly adhere the date.

2. Under the agreement as the clauses read 10 % amount can be forfeited.

3. Yes issue a legal notice to buyer on failure to pay on date giving further time of 15 days to pay complete amount.

4. Yes buyer can take steps for specific performance of agreement though the suit take time nearly 5-8 years to settle or more depending on Court.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Hi, if he intends to club the part payment with the final one , then there is nothing required to get Panick and issue legal notices, he has already paid 10 percent of amount which will be forfeited as per agreement,, However on the date of sale deed if he request for further extension in time , it is advisable to mark your attendance at the registerar office and issue a legal notice for the same

Hemant Chaudhary
Advocate, Gurgaon
4619 Answers
67 Consultations

4.9 on 5.0

1. A communication needs to be done with the purchaser for making the payment on the due date. it can be either through email or through the notice whichever mode can be selected.

2. advance amount paid by the buyer can be forfeited if the purchaser faults in making the payment. however it is still advisable to give a reminder to the buyer for making the payment within a prescribed period of time for compliance before finally forfeiting the amount.

3. yes, it is advisable to issue notice or intimate the buyer before the final forfeiture of the advance amount.

4. yes a suit for specific performance can be filed. though it should be disposed off within a year or so however looking at the scenario and the pace at which the courts are functioning, it may take 3-5 years or more even for final disposal.

Shaveta Sanghi
Advocate, Chandigarh
914 Answers
111 Consultations

5.0 on 5.0

First of all the unregistered sale agreement is invalid in the eyes of law and cannot be enforced in the court of law.

This can be considered as a receipt for the amount paid if you file a money recovery suit.

Hence whether you give a formal notice or not, the clauses, when you are taking up legally,cannot be enforced or maintainable in law.

However for the purpose of records, you can issue a legal notice to perform the contract of his side while expressing your ready and willingness to perform your part of contract.

The clause No. 8 or 9 are not tenable in law. How can you say that you will not return the money to the buyer when you or he is not able to proceed with the proposed purchase when there is no registered sale agreement/contract entered between you both.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

Dear Cleint,

Specific performance of unregistered is admissible as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by registered instrument.

Request for extension of time should in written to avoid any flow from actual terms of contact and also for record/proof.

Advance noitce is not mandatory, if not mentioned in the agreement but depends on wiliness of party, whether it wants performance of contract or forfeiture on violation.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

If you and your wife hold the flat as joint tenants, then on the demise of either of you, your share in the flat would automatically devolve upon the other.

2) sale deed can mention name the two owners as joint tenants. Then if one person dies, the other person will automatically become the full owner of the property.

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

When two or more people own property like a home, either as joint tenants or tenants in common, each individual owns a share (or interest) of the entire property. This means that specific areas of the property are not owned by any one individual, but rather shared as a whole. While joint tenants with survivorship are similar to tenants in common in many ways, particularly the right of possession with respect to the property.

One of the main differences between the two types of shared ownership is what happens to the property when one of the owners dies. When a property is owned by joint tenants with survivorship, the interest of a deceased owner automatically gets transferred to the remaining surviving owners. But tenants in common have no rights of survivorship. Unless the deceased individual's will specifies that his or her interest in the property is to be divided among the surviving owners, a deceased tenant in common's interest belongs to his or her estate.

Therefore while preparing the deed, there should be a specific mention about this in the recital.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

Yes this possible, the sell deed is just a contract under indian contract act. So you can draft a recital in the sale deed that right of cowner as complete in case. Of death. Right of survivorship can be added.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

In Joint Tenancy, its valid.

NO such clause required, just purchased property under joint tenancy and not in joint ownership.

right of survivorship prevails in joint tenancy.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

The same clause that the rights title and interest in the property will pass on the surviving joint tenant or his legal heir if any after his death in the date of the death of other joint owner.

Prashant Nayak
Advocate, Mumbai
27275 Answers
88 Consultations

4.4 on 5.0

Dear Sir,

My answers are as follows:

1. Verbal discussions were held with buyer 10 days before the scheduled date of part payment and he had sought some more time and desires to club it with final payment. Is any notice in writing required to be given to him at this juncture; or for that matter after lapse of date of part payment in case he fails to make part payment ? (though informal communication through sms has already been made to his dealer to ask his client to pay as per scheduled dates. Moreover my client does not wish to give formal notice at this juncture)

Ans: Without issuing a mandatory notice as provided under specific relief act you cannot file a suit for specific performance or payment of balance amount.

2. In case buyer fails to make the final payment, can advance amount paid by buyer be forfeited without any notice in view of clause 8 of agreement. Is the word 'advance amount' used in clause 1 has the same connotation as earnest money used in clause No 8. It is to note that advance amount mentioned in clause 1 was the initial 10% amount received at the time of entering into the agreement.

Ans: Usually the courts allow your client to forfeit the entire advance if it is reasonable say less than 10% of the total consideration amount.

3. Is any notice or intimation required to be given to the buyer or any legal steps be taken to forfeit the advance amount?

Ans: It is better to issue such notice so that you have a defense if buyer files a suit for specific performance with alternative relief of return off advance amount.

4. Alternatively Can my client sue buyer for specific performance in view of clause 9. If yes, how much time does it take to get the decision of the court - Long Drawn or straightforward?

Ans: You can but it will be very difficult to recover entire sale amount and it will take 2-3 years to get judgment.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

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