• Validity of sale agreement

I have entered a sale agreement with the purchaser for the sale of my house located in chennai. The purchaser is an govt. employee and he has registered the sale agreement on Feb 2018 to avail housing loan from his department .
In the sale agreement there is a clause mentioning that "The Parties doth hereby covenant that the purchase shall be completed within Four months from the date of this agreement and also further hereby convenant that the time is the essence of this agreement".He has given me one lakh advance and promised to pay the remaining amount at the time of registration.From my side there is no pending, but the purchaser is delaying the balance payment saying that the govt loan approval process still incomplete.

I would like to know,
1. Whether sale agreement is still valid or its valid upto six months from the date of registration.
2.Should I issue a legal notice to purchaser either to pay the remaining amount immediately or cancel the sale agreement
3.There is no penalty clause mentioned in the agreement. Shall I increase the price of sale consideration if the purchaser asks some more time.
Could you kindly clarify.
Asked 4 years ago in Property Law
Religion: Hindu

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19 Answers

1. Is the 4 months time expired already?

2. Do you wish to grant any extension to purchaser to enable him to arrange his loan?

3. If not then you can cancel the contract by a written notice

4. You can return the token money after deducting 10%. This is what is generally agreed if not much time has elapsed and is also reasonable

5. If you want the buyer to fulfill his obligation then you can issue him a legal notice to complete the transaction within notice period stated in legal notice failing you shall forfeit the token money and terminate the contract

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

1) issue legal notice to purchaser to pay balance amount as under agreement it was mentioned that balance payment was to be made within 4 months

2) it is necessary to peruse agreement to advice further

3) you can extend agreement with mutual consent on mutually agreed terms

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

Firslty, Sir, at the time of making the sell agreement everything should be there in the form of the clauses which may benefit both the parties.

Secondly, if no clause is there to keep the money paid with you if not paid further then also you can’t do that, if no clause is there to increase the price of balance not paid on time then also you can’t do that.

Thirdly, but, yes you make an additional sell agreement which may extend the time period to some more months and put all those clauses now in it.

Fourhtly, rest if no response from him then you may give him a legal notice and cancel the agreement, and may sell to anyone else in near future.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

1. Since the specific period for performance of the agreement was mentioned in the agreement the agreement now is not valid.

2. Yes issue a legal notice to purchaser demanding the amount in a week or cancelling the agreement stands cancelled.

3. Yes if he can ask more time grant same with a supplementary agreement asking raised price and mentioning specific time in supplementary agreement.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Q.1.Whether sale agreement is still valid or its valid upto six months from the date of registration.

Ans: Validity as agreed by you both parties is within four months from the date of agreement which has already expired. However, it can further be extended mutually.

Q.2.Should I issue a legal notice to purchaser either to pay the remaining amount immediately or cancel the sale agreement.

Ans: You can issue legal notice to the purchaser to pay the remaining amount or cancel the sale agreement. Had the following clause been added, you would have faced no problem:

"In case purchaser failed to pay balance amount within 4 months from the date of agreement, the payment of 1 lakh will be forfeited".

Q.3.There is no penalty clause mentioned in the agreement. Shall I increase the price of sale consideration if the purchaser asks some more time.

Ans.: Yes, you can. However, kindly see the genuineness of the purchaser. Go to the bank from where the purchaser is taking the loan, enquire whether he has applied for the loan or not and how much time it would take to release the loan. If possible, you can go alongwith the purchaser also. But it it seems that he is unnecessarily dragging the matter, issue legal notice and cancel the sale agreement.

I hope this would suffice the purpose.

Could you kindly clarify.

Dalip Singh
Advocate, New Delhi
1039 Answers
36 Consultations

5.0 on 5.0

Dear Client,

Time being main essence of agreement and by efflux of time, agreement is already expired unless not agreed by parties to continue.

Notice shall be of two demands - Agreement expired due to non adherence of condition in time.

or - Demand remaining amount which shall amounts to continuation of agreement

upto extended time.

You can raise on the condition that extended time will given on increase amount and if not agreed, deal over.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. It is not been specifically mentioned in the said agreement that the agreement will be cancelled after four months though it has been mentioned that it will be completed with in four months. If you wish, you can consider the agreement as cancelled since the time period of the purchase clause has not been complied by the purchaser.

2. You can issue a letter to the purchaser asking him to complete the purchase within next one month failing which the agreement will be considered as cancelled.

3. Since there is no penalty or forfeiture clause mentioned in the said agreement, you can not forfeit the advance amount paid by the purchaser or any part thereof. You can return him the said advance amount by cancelling the agreement as per your legal notice and thereafter register another agreement afresh duly increasing the price of the property, subject to his consent.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1.Agreement is valid, untill you terminate the same for nonpayment of balance sale consideration. 2. Issue a legal notice to pay the balance sale consideration and inform him that If he failed to pay the balance sale consideration the sale agreement will automatically stands cancel. When the time is essance of contract he should pay the balance sale consideration within the time frame as mentioned in the agreement. If he failed to pay you can unilaterally cancel the sale agreement by way of cancellation deed. 3. Yes you can.

Selva Perumal
Advocate, Chennai
329 Answers
36 Consultations

4.9 on 5.0

1. The duration of the sale agreement is not controlled by law, it is decided by the parties only. Since your sale agreement mandates that sale deed has to be executed within 4 months it is sacrosanct, albeit the duration can mutually be extended by the parties.

2. If he does not come forward with the balance amount for the execution of the sale deed within 4 months then you can serve a lawyer's notice on him to cancel the agreement and forfeit the advance paid to him. A suit for specific performance of the contract can be filed to seek a decree from the civil court against him to perform his part of the contract or pay the agreed sale consideration.

3. If you decide to increase the sale consideration then a fresh agreement will have to be written.

Ashish Davessar
Advocate, Jaipur
30761 Answers
971 Consultations

5.0 on 5.0

1. The validity of the sale agreement according to the clause you have quoted is only four months from the date thereof. Mere registration does not extend its validity.

2. If both of you are desirous of concluding the agreement fruitfully, you may mutually extend the validity for further period or execute a new agreement. Otherwise, you may proceed to issue a legal notice to the other party.

3. It all depends on mutual agreement.

Swaminathan Neelakantan
Advocate, Coimbatore
1920 Answers
20 Consultations

4.9 on 5.0

1. Sale agreement has lapsed after 4 months.

2. You should serve a legal notice to the buyer either for specific performance or can cancel the sale agreement altogether as the buyer has failed to fulfill his part of the agreement.

3. Yes. As a supplementary agreement to sell would be executed, the Covenant for increase of sale consideration price can be inserted if it is mutually agreed between both the parties.

Siddharth Jain
Advocate, New Delhi
5928 Answers
101 Consultations

5.0 on 5.0

This is my response to you:

1. Whether sale agreement is still valid or its valid upto six months from the date of registration.

Answer: Sale Agreement is valid, but if 4 months time is given then execute and register the agreement within 4 months. Otherwise it would make the contract void. Also after execution of the papers the property has to be registered within 4 months;

2.Should I issue a legal notice to purchaser either to pay the remaining amount immediately or cancel the sale agreement

Answer: Yes issue a legal notice asking the purchaser to honour the agreement and complete the process in the 4 months period;

3.There is no penalty clause mentioned in the agreement. Shall I increase the price of sale consideration if the purchaser asks some more time.

Answer: If you have agreed to certain terms and it is written in the agreement, you cannot raise the amount. Just ask him to hurry it up and arrange for funds immediately.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

1. Generally the sale agreement is valid for three years from the date of its execution.

However it becomes your duty to cancel the sale agreement if he has not honored the agreement conditions to get the sale deed registered after payment of balance of sale consideration amount within four months., because there is a mention that time is essence of contract. You can send a notice by registered post to the purchaser intimating your decision to cancel the Sale agreement as he failed to perform his part of contract.

2. You may read the above for this.

3. That may not be fair on your part as well as it may not be legally valid when he decides to approach court on this.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

Notice is sufficient.

Agreement will expire.

NO,

no

Litigation can be filed but no encumbrance.

Not required,

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. Both have to execute the registered cancellation deed in the office of the sub-registrar.

2. You can approach court with a suit for declaring the agreement as cancelled for the reasons you rely upon.

Without a registered cancellation deed the encumbrance on the property cannot be removed hence dont try any other option other than the proper legal provision in this regard.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

Sending legal notice to cancel unregistered agreement is sufficient as payment has not been made within stipulated period

2) you are at liberty to sell property to third party

3) no need to show legal notice to new purchaser

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

1. This is the reason why termination/cancellation of agreement clause is required to be included in the agreement for sale for non compliance of its terms.

2. Even if you ask him to register a cancellation of sale agreement, he will not oblige you for sure.

3. So, you shall have to send him the said legal notice to the said purchaser asking him to complete the purchase within next one month making the full payment as agreed by him, failing which the agreement will be considered as cancelled.

4. The purchaser will have no further right to purchase the said property as per the said agreement for sale after the time period of 4 months mentioned in the said agreement for sale is over.

5. The copy of said legal notice and also the proof of its having been received by the addressee ( delivery report of speed post collected from the net) shall be treated as the proof of your having cancelled the said agreement for sale.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1. No cancellation deed is necessary.

2. If there be no response, you are at liberty to find a new buyer.

3. The previous party has no such legal right.

4. No, it will not.

5. No, not at all.

Swaminathan Neelakantan
Advocate, Coimbatore
1920 Answers
20 Consultations

4.9 on 5.0

1. legal notice alone is not sufficient. cancellation deed must be executed and registered

2. you will have to file a suit for specific performance of contract against the puchaser

3. purchaser has to prove that he was always ready and willing to fulfill his part of the obligations under the agreement - which he will fail as he defaulted

4. yes till the time a cancellation deed with present purchaser is not made, your title will not be clear

5. yes your property will be encumbered due to the first sale

6. you can show the legal notice but the new purchaser will require you to settle the first purchaser and execute cancellation deed with first purchaser cancelling the first agreement for sale

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

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