• Tenant buying rented house

Case Scenario: A tenant approaches his landlord to buy the same rented property. They agree and proceed for the same. As they have a relationship of almost 5 years, landlord requests to transfer token amount before he shares photocopies of the property documents for verification and bank loan purpose, before any MoU is signed. There’s no property consultant involved. The tenant has the rented property as his present and permanent address in all government documents (as per the leave and license agreement that permits the tenant to use the address for all communications and documents including passport etc.)
Queries: 
1.	Is it okay to transfer token amount before checking property papers, signing any MoU etc.
2.	In the absence of a property consultant, who should lead the paperwork? MoU, Sales Deed, Search Report, Appointment in Registrar’s Office, Stamp Duty Payment and Society related work etc.? 
3.	Can tenant use the rented address in the sales deed as his residential address? This is the same he’s buying 
4.	Anything else that this deal must take into the consideration
Asked 1 month ago in Property Law from Mumbai, Maharashtra
Religion: Hindu

No, agreement to sell is must along with non encumbrance certificate - document verification.

Any local advocate will do all this or can approach for the same and if you will applying for bank loan than search r will prepare by bank advocate.

Not as permanent residence address but temporary address. 

Non encumbrance check is must.

 

Yogendra Singh Rajawat
Advocate, Jaipur
13088 Answers
15 Consultations

4.6 on 5.0

1.	Is it okay to transfer token amount before checking property papers, signing any MoU etc.
Preferably no. The parties can enter into a MOU. Under that MOU the buyer can pay a token on the seller providing him photocopy of title documents for his due diligence. If the buyer is satisfied with the seller's title then the deal can go through. If not then the buyer can inform the seller about his dissatisfaction on seller's title as communicated to buyer by his bank and thereupon the buyer can notify about the same to seller by a notice and the seller should then return the token without any interest to the buyer.

2. In the absence of a property consultant, who should lead the paperwork? MoU, Sales Deed, Search Report, Appointment in Registrar’s Office, Stamp Duty Payment and Society related work etc.?
legal due diligence can be done by a good competent lawyer whereas search can be done through a registration clerk

3. Can tenant use the rented address in the sales deed as his residential address? This is the same he’s buying
no problem. Mere using of owner's address in ID documents would not enlarge the licensee's title to that of an owner

4. Anything else that this deal must take into the consideration
if the parties are reasonable and practical, then nothing else is required. Always keep an open and business minded approach.

Yusuf Rampurawala
Advocate, Mumbai
4448 Answers
25 Consultations

5.0 on 5.0

Verifying the property documents is very much essential before transferring or paying the token advance. It is advisable that after through verification and getting title scrutinized on the purchase transaction must be initiated. 

 There must be some proof to the buyer that the amount so transferred is towards the token advance or part sale consideration property under the occupation of the buyer as a tenant.  Token advance or part sale consideration amount must be paid under an agreement of sale prepared on non judicial stamp paper.    At least a receipt must be obtained in the event of entering sale agreement is not possible.

You can approach an advocate for getting property documents verification documents and document writer for getting sale deed registered and its related works.  

 

yes the tenant can use the rented address in sale deed as his address. In fact it is advantage to the buyer as the buyer is preoccupied the property and already the buyer is in possession of the property   

 

Ensure Clear title of the property. Verify the layout, approved plan from concerned municipal authorities. Encumbrance on property must be search and note that what the transactions took place with regard to the property. insist for payment of up to date property tax etc.,  

 

Lakshmi Kanth
Advocate, Hyderabad
435 Answers
15 Consultations

4.7 on 5.0

Sign MOU then make token payment 

 

2) let landlord do the paper work 

 

3) mention some other address as his residential address 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

1. See you can take signature of land lord on  agreement before transferring any amount wherein condition can be mentioned it title is not clear the owner shall refund amount along interest .

2. See the buyer can engage.an advocate or consultant to complete the task.

3. If same address is there in his proof then he can mention same.

4. See amount should be transferred through bank and after proper agreement.

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

after executing MOU make token payment and mention terms and conditions. 

tenant can mention his same address. 

Mohammed Mujeeb
Advocate, Hyderabad
10125 Answers
3 Consultations

4.5 on 5.0

1 it's better to check all property papers token once given is not returned. 

2. You yourself or through a lawyer. 

3. He can use with permission of landlord. 

4. Check all the documents

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

1.  The documentation scrutiny and verification and drafting of further Deed/s must be done ONLY thru a experienced Property Lawyer.

2.  Address of Seller & Buyer cannot be same, unless and until the Buyer is a blood relative of the seller.

 

Hemant Agarwal
Advocate, Mumbai
2403 Answers
14 Consultations

5.0 on 5.0

Registering Agreement of Sale

Yogendra Singh Rajawat
Advocate, Jaipur
13088 Answers
15 Consultations

4.6 on 5.0

You must seek inspection of original documents before making token payment 

 

2) get agreement vetted by lawyer 

 

3) you can issue public notice in newspapers before purchasing tenanted property 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

1 before token for approval. 

2. All the things verify before token cause many times token is not returned

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

1. There is nothing wrong in paying a token amount but always obtain a receipt stating that this is a token amount for this purpose.

2. You can approach a lawyer in the local who has expertise in the property dealings  and property laws.

3. He can very well use the same since that is his address now.

4. Obtain a proper legal opinion from a local lawyer before proceeding.

 

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

You are mentioning about the process of the sale deed  which can be taken care of while your vendor shall be executing the registered sale deed in your favor.

Before that you may consult a local lawyer who will be able to give a legal opinion and his recommendations.

The lawyer will guide on all such further issues as well.

 

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

Take title search before entering into agreement and giving the token amount, yes original documents should be checked before signing agreement along with all chain documents.

After MOU is done you can give agreement and other document for bank loan approval. 

After all checking agreement can be done and balance payment can be made before the sale deed. 

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

1. No it is not advised to transfer token money without signing any document of proof like agreement of sale between the parties.

2. You can appoint a lawyer who is expert in property matter for drafting of documents.

3. Yes tenant can mention the address as rented accommodation. 

4. The process you have mentioned is perfectly fine. You can proceed with this process. 

Mohit Kapoor
Advocate, Rohtak
3442 Answers
1 Consultation

5.0 on 5.0

It does not make difference whose name comes first 

 

all 3 would be co owners and have equal share in property 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

WHY TO MAKE THINGS SO COMPLICATED

JUST DESCRIBE THE RELATIONS OF THE PURCHASER PARTIES IN THE RECITAL PORTION OF THE AGREEMENT/SALE DEED

THIS WILL TAKE CARE OF YOUR MIL'S CONCERN REGARDING TRANSFER/SUCCESSION

Yusuf Rampurawala
Advocate, Mumbai
4448 Answers
25 Consultations

5.0 on 5.0

See there is no difference the name can be written in any order first second or third , it doesn't affect the ownership in anyway. 

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

Mostly the name of first owner come first so it depends on your agreement with your family members

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

See in MOU condition can be incorporated that if any mistake in title of the property or if title is not clear then the seller shall indemnify you and pay the token amount back along the interest.

See if seller is ready to wait , wait till the time search report comes and his final draft for MOU comes.

 

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

I find some foul play here. Don't do anything hastily as it can create problems. Study the mou properly and then decide

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

It appears to be an attempt to delay MOU 

 

2) don’t give any token money without MOU being signed 

3) then take search report 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

Your mother in law is affected by some whims hence she is trying to play this gimmick.

However there is no legal infirmity in enforcing such funny ideas  of mentioning the names with the description as desired by your mother in law, if you dont have any objection to this then you may proceed with the fancy though of your mother in law.

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

If you suspect any foul play either by the seller or the lawyer involved or anywhere, then you may always put the process on hold because after all it is a  huge investment which should not disappoint you in any manner.

In my opinion, why dont you wait for the title search results because till it is confirmed  the seller's clear and marketable title cannot be ascertained.

Having faith and trust is different to that of the practical issues that may crop up at a later stage due to which you may have to unnecessarily strain and lose your peace. 

 

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

It's risky I will not advice you to enter into the said transaction

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

Ask seller to get index 2 corrected as area of property is less than claimed by seller 

 

title is defective 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

If there is defect in area then it can make area dispute in the property. 

If such indemnity clause of refund is there then you can go ahead with MOU

 

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

Rectification of index 2 is necessary as area of property is incorrectly mentioned 

 

Take printout of correcrion in Index 2 application form from igrmaharashtra website ,fill that form attach xerox copy of INDEX 2 and all the copy of sales deed
2. Higjlight the mistake in xerox copy
3. Submit to sub registrar office It will take one month
4.Sub registrar will send this copy to Joint registrar and after approval from joint registrar feeezed index2 copy will get unlocked for correction

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

Already advised

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

See index 2 can be rectified by making application to the subregistrar office further if the deed is correct then based on same index can be corrected.

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

Wait for bank search report 

 

if index 2 cannot be rectified don’t purchase the property 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

I find many reasons you should not go for the said deal it will get you in defective title

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

From the search report it was found that ther is some defect in the title to the property i.e., with respect to the extent of the property, therefore it is not advisable to proceed without clarifying the details about it. 

You may discuss at length with your advocate before proceeding.

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

Your mother in law is right in her opinion that this issue needs to be rectified that too by the seller himself and not through your lawyer.

Let the seller rectify the defect because he knows the problem of his property, hence it is his responsibility to sell the proeprty with clear and marketable title with all the records perfectly matching to fhe other in the link documents as well as the government revenue records.

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

Since your lawyer has categorically stated that this error cannot be rectified for the reasons specified therein, it may not be advisable to proceed with the purchase of this property.

The lawyer's report after confirmation with the authorities concerned  may be clarified with a second opinion through some other lawyer in the local, if recommended you may go ahead or you may think of dropping the plan to buy this property.

You may discuss with yor family members and take a wise decision at the right time.

 

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

Yes it's a good ground as the said facts are concealed from you before the said deal. He needs to legally return your money. 

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

Since your conditions to cancel the sale agreement is very clear and tenable in law, you may go ahead with your decision to cancel the agreement and ask for full refund of the advance amount.

It is not necessary for you to buy the property having defects in title itself.

You can always get a better property to purchase in the near future.

 

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

it would be good ground to back out of deal and claim refund of token money paid by you 

 

take the plea that title is not clear and marketable and such you want refund of money paid by you 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

See in case once document is registered and there is error in Index- 2 same can be rectified to the extent of the document. i.e. as per what is written in document same can be entered. Further if the limitation period is crossed they cannot file a suit now. Though you can deny in case there is difference in area and defect inn proper title of property.

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

Yes it will a ground to cancel the deal and seek refund of your amount from the seller. 


Yes it will a ground to cancel the deal and seek refund of your amount from the seller. 

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

if lawyer say not possible to rectify index 2 cancel the deal and seek refund of your money paid by you if nay 

Ajay Sethi
Advocate, Mumbai
66757 Answers
4037 Consultations

5.0 on 5.0

Ask her to being rectified Index, and give title clearance of the property from seller side. 

In case they respond that it is no big deal call off the sale.

Shubham Jhajharia
Advocate, Ahmedabad
19206 Answers
75 Consultations

5.0 on 5.0

I don't seem that aforesaid illegalities can be cured to rectification deeds. If not then proceed as we decided above. 

Prashant Nayak
Advocate, Mumbai
12732 Answers
22 Consultations

4.6 on 5.0

In case the lawyer is suggesting some steps which you may feel not appropriate or legally valid then you can very well seek a second opinion about this from your own lawyer too.

You can produce the copies of all the relevant papers before the lawyer from whom you may propose to seek second opinion and proceed only if recommended

 

 

T Kalaiselvan
Advocate, Vellore
56549 Answers
695 Consultations

5.0 on 5.0

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