• Change of Buyer in agreement for sale before sale deed is executed

Seller A and Buyer B entered into Agreement for sale in July 2016 which is duly stamped, executed and registered. The buyer paid 20% advance amount.
Soon the buyer realized that there was a common lien on the flat along with another property. The seller agreed to get the flat cleared until which balance payment was held by the Buyer. Seller has now got the property cleared of the lien and demanded the balance payment as per agreement.
However, Buyer B now wants to back out of the deal and another buyer C is ready to take the property. 
All three parties mutually agree on the arrangement.

Questions:
a) Is it possible to enter into a tripartite addendum agreement between Seller A, old Buyer B and new Buyer C for Buyer B to back out and get the advance payment back and Buyer C to pay directly to Seller A and sale deed to be executed between Seller A and buyer C? 
b) Will the stamp duty need to be paid again? The property is registered in Mumbai. Its been 2 years since the original agreement but that terms are not fulfilled.
Asked 4 years ago in Property Law
Religion: Hindu

3 answers received in 30 minutes.

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7 Answers

1. A cancellation agreement has to be executed firstly between seller and Buyer B. Since the agreement to sell has been registered the cancellation agreement too should be registered.

2. Thereafter, a fresh agreement is to be executed between seller and Buyer C.

Ashish Davessar
Advocate, Jaipur
30761 Answers
971 Consultations

5.0 on 5.0

Tripartite agreement can be executed between the 3 parties

2) better option is to cancel agreement between A and B

3) then sale deed can be executed between A and C

4) stamp duty has to be paid again

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

1. yes that can be done

2. C can pay B the advance B paid to A. C can also pay balance money to A. All this can be recorded in the triparty agreement

3. as stamp duty is paid on the full sale consideration, there is no need to pay any additional stamp duty by C

4. The triparty agreement can be registered. In that it can be recorded that on C paying the consideration for purchase of property, the original registered agreement between A and B would stand cancelled and B will not claim any right in the flat against A or C

Yusuf Rampurawala
Advocate, Mumbai
6876 Answers
79 Consultations

5.0 on 5.0

a) Is it possible to enter into a tripartite addendum agreement between Seller A, old Buyer B and new Buyer C for Buyer B to back out and get the advance payment back and Buyer C to pay directly to Seller A and sale deed to be executed between Seller A and buyer C?

Answer: Yes enter into a tripartite agreement;

b) Will the stamp duty need to be paid again? The property is registered in Mumbai. Its been 2 years since the original agreement but that terms are not fulfilled.

Answer: Yes since you are drafting a new agreement the stamp duty will have to be paid. Or in the alternate you can add a supplementary agreement in addition to the original agreement.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

1. Yes the new buyer seller and the old buyer can enter into a agreement and the old buyer can be the confirming party and can receive it's balance amount the agreement can be registered and same will override the previous agreement. In the agreement it can he mentioned about the payment as new buyer can pay share of old buyer and balance amount to seller. And seller can agree same

2. Yes the stamp.duty need to be paid for agreement as well while making a sell deed for the sale deed.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

a) In the tripartite agreement it may be agreed to sell the property by the seller directly to the new buyer provided the the new buyer pays the amount paid by the old buyer and the sale agreement between A and B is duly cancelled.

b) For fresh execution of registered sale deed between A and C, the necessary stamp duty has to be paid along with the registration charges.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

Hi,

The said agreement will be a fresh agreement and stamp duty will be required to be paid.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

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