You can forfeit earnest money as per terms of MOU
2) purchaser can approach court fir refund of Rs 11 lakhs but terms of contract are sacrosanct
3) Buyer cannot claim rights on flat as no agreement has been signed
Cancellation of flat by the purchaser & refund to be taken from buyer
I have to make mou for sale of my flat in mumbai with the buyer . In mou the clause is 11 lakhs to be paid by the purchaser before the execution of mou by way of token & non -refundable earnest money . Another clause of mou is the purchaser fails to make payments within time period specified in mou the contract stand ipso -facto terminated and whatever monies that have been paid by the purchasers to the seller / vendor till date of termination shall be refunded to the purchasers without any interest after adjusting a sum of rupees 11 lakhs as administrative expenses & losses by the seller in cancellation of the deal by the purchaser .the deal will be completed till janaury 2020 . Question is Can i forfeit 11 lakhs as mentioned in mou if buyer do not commit & make payments as per mou terms . Can buyer approach court that seller cannot forfeit 11 lakhs even though agreed by buyer & signed by him . what will be my status for refund of deposit Till date i have not taken any amount from buyer . Only mails & whatsapp are exchanged about terms & price of flat so if i am not interested in selling the flat can buyer claim right that deal has happened on various mails , whatsapp exchanged between us as till date no deposit has been received from buyer and no receipt has been issued or any payment confirmation has been given by us nor mou has been signed by both . Kindly guide about cancellation by buyer & whether we can forfeit amount as per mou . Can buyer claim right on flat as mou has not been signed & no token amount has been received by us .
Asked 6 years ago in Property Law
Religion: Hindu
10 Answers
If buyer failed to honor the agreement terms within given time, you are entitle to forfeit earnest money, Don`t allow him extension.
Buyer not paid 11 lacs before execution of MOU, already under default, by citing this, can cancel the deal or do not give consent to delay of earnest money, keep stress on it as continuous default.
For not paying 11 lacs before execution of MOU,can cancel now.
Or if 11 lacs paid and than buyer failed to make payment on given time than by giving notice can cancel the deal and forfeit booking amount.
1. Forfeiture by seller of the token amount and as agreed in the MOU will bind the buyer. He cannot then turn around and say that seller has no right to forfeit the token in the event the MOU is terminated due to default by buyer in completing the contract within the stipulated period agreed between the parties
2. the mails and whatsapps messages without payment of any token by buyer to seller, cannot be construed as binding contract so as to bind the seller. All these are only negotiations and cannot take the shape of a concluded contract
Dear Sir,
Tokens are always refundable as per market practices. Its the earnest money which is non refundable in case the buyer backs out and has signed the agreement to sell already.
If there is nonlegal document signed i.e no agreement to sell is done in any format which does not carry a revenue stamp or is not in stamp n paper, then you can request your token amount back. I hope that was in cheque or accounted cash for which you took a reciept from broker/seller.
You can forfeit any amount on cancellation as shall be agreed upon by MOU.
There shall be clear intention of the buyer to buy and acceptance by you to the offer for some consideration then only buyer can claim his right to buy but no right to property.
Further note that if cancellation charges are so high not backed by any ground loss or damages so as to make way to earn clear profit out of the charges, court may take a review of the facts as to normal practice in the respective field, on a complaint by any aggrieved person, and cancel modify the relevant clauses as may deem fit in order to discourage unfair trade practices.
Any party can back out from the same but it does not mean that token money paid under MOU is not safe. If seller back out then he has to refund the advance and penalty (if any). Though it is not legally binding but since in property transaction there is an exchange of money therefore MOU is binding on both the parties.
You can forfeit it if the same is mentioned in a registered mou. He may approach court if the said amount forfeited found to be exhotibant compared to the loss you suffered by cancellation of the said deal
See you can deduct amount as agreed for damages and as per agreement. Also he can approach the court he us at liberty to do same.
See if no confirmation and agreement buyer cannot claim same as agreement.
The conditions to forfeit the token or advance amount ion full will not be legally valid condition.
If the buyer approaches court then the court will term the conditions as one sided and illegal as well as invalid and may pass an order to refund the same in full .
If no advance has been paid till date then the so called orally accepted MOU can be revoked
Dear
You are bound to return the advance taken fro. Buyer in any case where the deal is cancelled as it is a well set rule by supreme court that no one is allowed to claim money of other person in case of cancellation of deal.
Buyer cannot claim any right in flat until the MoU has been signed by both buyer and seller.
