There is no problem if you are entering and signing amanai in this regard after getting 10% of the advance you have to make m a u in such a way that all the payments should be realise bill before the date of registration and please remember to register this m o u who were the register after payment of registration stamp the builder will have the opportunity to adjust stamp duty at the time of registration of the property so the cost of stamp duty paid now will be adjusted in the registration of property
MOU for our property for sale
I have my mothers property and we want to sell it. We got an offer from a builder who has requesting us to sign a MOU initially that will have a registry date of the property. What he has mentioned that the Registry date will be alloted by corporation 3 months from the MOU sign date. He is willing to pay 10% of the property cost and the rest in 3 instalments within the next 3 months. On registry date he is saying that all payments will be cleared. He will actually sale this property to a group company and will also build their project and for us he is the buyer. Although he is promising that the amount will be paid within the tenure of payment terms as agreed I am thinking of what clause should be there for payment failure. The obvious clause should be agreement cancellation but I want to know the other clauses. Also, I want an advise whether we should go for a MOU Moreover he is willing to put walling on our property after the advance and want to take hold of the land before the project starts by paying 10%. I would request some ideas / advice regarding this.
Asked 4 years ago in Property Law
Religion: Hindu
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13 Answers
Hi, Can you please explain the below lines properly? please remember to register this m o u who were the register after payment of registration stamp the builder will have the opportunity to adjust stamp duty at the time of registration of the property so the cost of stamp duty paid now will be adjusted in the registration of property
Asked 4 years ago
Please register the memorandum of understanding with the register after payment of the stamp duty required in this case that will give you the edge in case of any dispute and registered memorandum of understanding will have problem in executing in case of any dispute so it is always good in your favour to get the agreement registered and please remember that the stamp duty required in this case is to be paid by the builder
1) get MOU vetted by lawyer
2) don’t deliver possession until full payment is made
3) if builder fails to pay instalments MOU should stand cancelled
It is advisable to register MOU
2) stamp duty paid for registration can be adjusted at time of execution of sale deed
See firstly give possession and walling permission after complete payment and registration is done.
Secondly instead of MOU enter into registered agreement to sale and mention prospective dates and timeline of all the payments.
Thirdly get same drafted by a lawyer and add clause of forfeit of advance and cancellation of sale in case of payments on time are not made.
See MOU or agreement to sale has to be registered before the sub-registrar office by paying registration and stamp duty.
1. Under no circumstances part with the physical possession of the property unless at least 90% of payment is made.
2. So either put clause on this or do not hand over the property.
3. Make a clause of termination of contract if within the stipulated time the payments is not made.
4. the MOU need not be registered and even it is registered then the buyer alone should bear the cost.
You can go with the deal but don't give him possession till all the funds are cleared
Possession shall be deliver only after execution of sale deed and complete payment. Don`t permit to enter before payment and sale deed else your land will get into dispute and encroachment.
Don`t include this - Registry date will be alloted by corporation.
Just - complete payment shall be made within three months and sale will execute, 10% advance, If buyer fails to honor the terms of agreement, further extension shall be at the discretion of seller (with/without increase in sale price) and in writing or cancellation of ATS and forfeiture of advance.
Total stamp duty payable for sale deed if 6%. 3% for ATS which will adjust with sale deed stamp duty.
Buyer will pay stamp duty.
The best option is to register the sale deed on or after the full payment.
You can make provision for part payment with strict schedule and penalty for delay in payment.
Make provision for cancellation in clear terms.
Put indemnity clauses for cancellation by the buyer.
Do not give possession until it is registered.
It is better to draft the agreement by any professional expert in this field.
Dear
MoU with cancellation clause is very good and if you want to take more precautions then you can add a clause related to delayed payment and refund of advance paid by builder to you by adding clause that you will not be liable to pay any interest on the advance or Installements paid to you if buyer default the payment which results in cancellation of agreement.
Instead of entering into a MOU, you may better enter into a sale agreement and get it registered.
You may make it clear that the possession of the property cannot be delivered till the final payment is made and the registered sale deed is executed in his favor.
If he is not agreeing for this, then you may better refuse to accept the offer, he may come with the best offer for now but in case of failure and also since the property would be in his possession, you will not be able to recover the balance sale consideration amount nor the property from his posssession without approaching court of law, and it may take more than 5 years to get the court matter settled or disposed in your favor.
Take proper precautions before making a hurried decision on this.
Whether MOU or the sale agreement entered into, can be by a registered document only, in any case while getting the sale deed registered at a later date, the stamp duty paid now can be adjusted in the stamp duty for the registration of the sale deed to be done at a later date.