• Reselling the under construction phase flat

We have bought a flat in bangalore 2years back and the construction of flat has been started recently but now we wanted to sell our flat in under construction phase only. The builder is saying that we have to go for cancellation first if we have to resale our flat. we have already paid 10Lakhs to the builder and we have got our loan also sanctioned from the bank and the bank has released 5lakhs till now and we have paid EMI for 2months till date. The information we have from builder is he will pay that 5Lakhs amount to the bank within one or two months once we process for cancellation and when he gets new purchaser who is ready to buy our flat then he will return back our 10Lakhs payment.
1.so now we wanted to know since we want to resale the flat whether we are getting a share of profit from the builder or not? 
2.The builder is charging 30000Rs/- as cancellation charges which is not written in the sale agreement at all and we will also losing the interest that we have paid till now. Should we accept this and pay the cancellation charges or do we have any other option?
3.since we will get our amount of 10Lakhs only after builder gets a new purchaser we want to return the originals at that time only not just after cancellation as we will be losing the original documents as well as our money if we return the originals immediate after cancellation before the builder gets a new purchaser.
4.Should there be any agreement between builder and us for this process of reselling the flat?
Asked 3 years ago in Property Law from Bangalore, Karnataka
Religion: Hindu
 1) has sale deed been registered by the builder in your favour? 

2) you would need the bank consent if you want to resell the flat . 

3) dont rely upon builder promises . in many cases builders fail to refund money and poor buyers have to move consumer forum to obtain refund 

4) only if builder mentions a time period of say 3 months wherein he will refund Rs 10 lakhs should you cancel the agreement . 

5) if you cancel agreement builder can recover cancellation charges as specified in the agreement only . if agreement is silent builder cannot seek to recover any amount from flat purchaser 

6) before you cancel the agreement insist that builder give in writing period when refund would be given and not when builder finds new purchaser . there are hardly any sales in reality market and all builders are stuck with inventory of un sold flats . further if builder fails to refund money within 3 months builder should pay interest at 18%pa for period of delay 

6) builder wont pay you the share of profits if prices of flats have increased 
Ajay Sethi
Advocate, Mumbai
46639 Answers
2758 Consultations

5.0 on 5.0

1)if the builder is unable to furnish OC then you have remedy of moving consumer forum against the builder to direct him to furnish OC from municipal corporation 

2) unless builder is willing to give in writing period within which money would be refunded dont cancel the agreement 

3) under your agreement builder can terminate agreement if you fail to pay installment s  and forfeit amount paid by purchaser . under such circumstances Rs 30,00 is reasonable amount being charged by builder 
Ajay Sethi
Advocate, Mumbai
46639 Answers
2758 Consultations

5.0 on 5.0

1. If you have merely made an agreement with the builder it cannot be said that you have purchased it. Unless the sale deed is registered the legal relationship flows out only from the agreement. You have merely booked the flat and not purchased it.

2. Since you have not yet purchased it the sale has to be preceded by cancellation of the allotment made in your favour. The cancellation has to take place only within the four corners of the cancellation clause, if any, incorporated in the agreement. If the clause provides for cancellation charges the builder is entitled to charge it.

3. The clause extracted by you is not applicable to the scenario in hand as it deals with unilateral cancellation by the vendor in the event the purchaser defaults in the payment of installments.
Ashish Davessar
Advocate, Jaipur
23092 Answers
639 Consultations

5.0 on 5.0

all sale agreements will have a clause which empowers the purchaser/s to assign their right in favour of a third party, you're agreement must also have this clause.
In addition if you exercise this right, you will have to pay the builder a transfer fee @ Rs.5/- sq ft., which is negligible, thereafter you execute an assignment deed with the new purchaser, despite funding by the bank this procedure is widely accepted and followed.
so provide me with the scanned copies of both the sale and construction agreements to understand the situation.
Kiran N. Murthy
Advocate, Bangalore
1010 Answers
91 Consultations

5.0 on 5.0

The condition what you have mentioned is about the default in paying the instalment towards the purchase of the property as per the conditions of the sale agreement. 
Whether the sale agreement is registered?
If the flat construction is not completed how do you think you will get OC without completion?
First place you cannot sell the flat which is not in existence now and also it is not belonging to you legally.  Until a registered sale deed is executed in your favor you do not own the property neither the tile is conferred on you legally.  Mere sale agreement will not confer title.  The bank will grant loan on the basis of the documentary proof including registered sale agreement, however if you do not purchase the property subsequently or cancel the sale agreement, the bank will initiate necessary action legally to recover the amount as per the terms and conditions and rules meant for the purpose. 
The builder's assurances about returning the sale consideration amount cannot be taken for granted until the same is reduced to writing with more conditions suiting to each other's convenience. 
You must consult and take proper opinion from a local lawyer before entering into any such MOU with the builder for cancellation of the sale agreement or alternately you may wait for the construction of the flat, get possession as well as sale deed registered on your name, then you re sell it as per your convenience and free will.  
T Kalaiselvan
Advocate, Vellore
36754 Answers
403 Consultations

5.0 on 5.0

You become trouble if you will cancel the agreement for purchase the flat.How can you bought a flat before 2 years , it is not constructed at that time. Actually you had entered in to an agreement between  builder for purchasing a Falt. If you withdrawn the willingness to purchasing of flat,  you have to loose money and face for litigation to builder if they are not properly refund the amount which you already transferred to their account . Also the bank will start their recovery process if you  .Most probably the builder is not share the profit. Better you will sell the flat after occupation  and creation of sale deed.
Ajay N S
Advocate, Ernakulam
2815 Answers
47 Consultations

5.0 on 5.0

Ask a Lawyer

Get legal answers from top-rated lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer