Dear Sir,
My answers are as follows:
On pursuing, he is not ready to amend agreement to sale but agrees to provide block details on company letterhead. In legal terms, Will it be okay?
Ans:It will be ok if he agrees to incorporate the same in the Sale Deed in future.
Further, UDS (Undivided share of land) is also not mentioned in agreement to sale. Is it necessarily required to be incorporated?
Ans:It will be ok if he agrees to incorporate the same in the Sale Deed in future.
PLEASE CHECK WITH YOUR BANKER IF THE PRESENT CLAUSES ARE SUFFICIENT THEN BE SILENT. THE USUAL CLAUSES REQUIRED ARE AS FOLLOWS:
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Clauses
There are several inclusions or what are called clauses in the sale agreement. It will describe the property, include contact details of the seller and the buyer, the negotiated price will be mentioned and also how this payment is being disbursed. The time frame for the payment will be included. There will also be a provision for the payment of stamp duty and for the account of the property title.
The clauses in a sale agreement are important because they outline everything that will go into making this a successful transaction, which is completely legally sound. The contract will tell you if the payment is to be made in cash, in part or an agreement for it to be paid partially in the future has been agreed on.
Some of the clauses will cover municipal taxes that are due by the person buying, as well as maintenance charges and in the case of an apartment being purchased payment towards the building society.
The legal basis
In India, the ‘Property Sale Agreement’ comes under the Indian Contract Act,1872, the Registration Act,1908, and the Transfer of Property Act. This is applicable no matter who the seller is — friend, family, acquaintance or complete stranger. A written agreement should be entered into in order to legally establish the authenticity of the property’s ownership. All of the deeds that you receive will have to be verified by an experienced and established property lawyer.
Should you be buying an apartment from a realty company then cross-check with the Registrar of Companies on the property being of freehold nature. The apartment should be completely free of any obligations monetarily and should not be mortgaged. It cannot be reiterated enough on the importance of having the documents looked into by a property lawyer.
Here is what should be included in your sale agreement
Payment terms: The onus is on both the buyer and seller to come to a mutual agreement on the price of the property and all other expenses that go towards the transfer of property. This has to be included and has to be agreed on by both the buyer and seller.
The time for the disbursement of the payment should also be included right up to the last instalment. The document will need to be scrutinised by lawyers from both sides and then signed by both parties.
Transferring of property title: For a loan to be sanctioned, the property title is important.
This should be transferred to the buyer when the seller has got in hand the amount agreed on. The transfer is the last step in the whole process of buying the property. The property will have to be registered in the buyer’s name by the seller at the local registrar office.
Stamp duty: These rates are fixed by the relevant authorities and can vary with each State. The onus is on the buyer to ensure that the property has been registered in his name at the rate that the government has sanctioned for the transferring of the property.
Sale deed: This follows the agreement of sale and is an understanding between the seller and the buyer. Its contents need to be scrutinised by experts multiple times before you actually sign on it.
With the right kind of legal help to support you, there is no reason to fear the complexities of the agreement of sale. It is something that you can easily surmount.
1. Earnest money
When a deal is struck, the buyer pays a token amount to the seller and agrees to pay the balance within a specified period. If he fails to make the balance payment within the time frame agreed upon, he foregoes the earnest money given to the seller
This agreement precedes a sale deed and protects the interest of all parties.
An agreement to sell always precedes the execution of a sale deed in a property sale transaction. This is a very important document in the process of acquisition of property. A well-drafted agreement to sell can help you avoid many issues that may come up at a later stage. This agreement contains the terms and conditions subject to which a property is being sold.
An agreement to sell is signed and executed by both the seller and buyer on a non-judicial stamp paper. It is a legal document. It needs to be signed by the parties involved or their duly authorised agents, and has to be witnessed as well. In case of a breach in the terms and conditions, it can be produced in a court of law.
An agreement to sell is the base document on which the conveyance deed is drafted. Usually, an agreement to sell is in writing. This is mainly an agreement entered into between parties to sell and purchase a property, and the attendant conditions to it. The document captures the understanding reached between the parties, which is binding on both, and is intended to protect the interests of both parties. It spells out the terms and conditions under which a seller is intending to sell a property, and the terms and conditions under which the buyer is intending to purchase it.
There is no statutory format for this agreement. These are some points that should be included in the agreement:
- Names of the parties involved in the sale and purchase transaction
- Residential addresses of all the parties
- Date and place of execution of the agreement
- Competence of the parties to enter into an agreement
- Competence of the seller to sell and transfer the property
- Rights and liabilities of the parties
- Details of how the seller acquired title to the property chain of prior ownerships and transfers of the property starting from the first ownership of the piece of land and then the subsequent constructions
- Exact location and description of the property
- Details of the property being transferred
- Details of builder of the property
- Details of other parts of the property. For example, other floors in case of a builder property (in case of a three storey house, how the other floors have been transferred out of the original property. A brief description may be given)
- Agreed sale amount
- Mode and time of payment
- Timelines for various acts and the responsibilities
- Mode of production and inspection of title deeds In case of an under-construction property, the stages of construction and the time limit for completion of construction
- Time limit for completion of the transaction
- Conditions and obligations to be complied with
- Details of who is bearing the cost of transfer
- Penalty and forfeiture clauses in case of default by either of the parties
- Conditions for delivery of possession
- Names, signatures and addresses of witnesses
Once this agreement is well drafted, the drafting of the sale deed becomes only a formality because it is merely an extension of the agreement to sell with some minor changes.
Ashish Gupta, Times Property, The Times of India, Bangalore