• Pros and cons of giving possession after sale agreement and before deed of conveyance

I have a flat in a housing society that I would like to sell. I have found a buyer willing to purchase within a month. We agreed on the sale price. I stay in USA and due to the current COVID situation, I am not willing to return to India immediately to complete the sale process. I have a copy of the registered sale agreement when I purchased the property from the builder several years back, here in my possession in USA. However, the original deed of conveyance is kept in a bank locker back in India. The buyer is requesting me to give him possession after completing a sale agreement when he will pay me an earnest money (3% of sale price). After this, he would move in. Then we will complete the final title transfer after I return to India within 6 to 12 months. I can give someone else back in India, the Power of Attorney to execute the sale agreement on my behalf. The buyer is not interested to enter into a Leave & License Agreement for 11 months until I am able to return to India to complete the sale.

Question: What are my risks / disadvantages if I do as the buyer has requested to give him possession after completing a sale agreement with an earnest money considering the final sale including title transfer will be completed several months later?
Asked 3 years ago in Property Law
Religion: Hindu

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7 Answers

Under no circumstances should you deliver possession before execution of registered sale deed and receipt of full consideration 


if you deliver possession only on receipt of earnest money there is no guarantee that buyer will pay you balance amount 


litigation in India is long drawn and expensive proposition 

Ajay Sethi
Advocate, Mumbai
94700 Answers
7528 Consultations

5.0 on 5.0

It is not advisable to handover possession of the property before the registered sale deed is executed in favor of buyer after receiving the entire sale consideration.

The buyer cannot force you with his proposal.

It would be difficult for you to eject the buyer in future if he is not paying the balance of sale consideration amount and you may have to run between courts with the property dispute for years to solve this problem. 

Please be aware that the sale agreement is different to that of the sale  deed.

Also it is not advisable to let out the property on a leave and license agreement a too to the buyer because he may take advantage over the situation and may not vacate the premise and may not even be willing to pay the balance of sale consideration amount.

You may again have to drag him to court of law and face the  stretched court proceedings for years by the time you will get relieved from this dispute.

Since you are not available in India, this will also be an advantageous situation to the buyer.

In any case the buyer is paying a paltry amount i.e., only 3% of the consideration amount now and he may  pay the balance after one year or so, hence better do not run a risk of selling the property in haste without receiving the entire sale consideration amount.



T Kalaiselvan
Advocate, Vellore
84896 Answers
2192 Consultations

5.0 on 5.0

Risky proposition.

Without sale deed dont handover possession. 



High Court of Madras 

Rajaganapathy Ganesan
Advocate, Chennai
2132 Answers
8 Consultations

4.9 on 5.0

1. You can give Power of Attorney in favour of person in India whom you can be entrusted upon. You can execute it there & get the same apostille from Indian Embassy.

2. It is advisable to stay in loop and accept NEFT transfers against purchase consideration into your account. 

3. If the buyer agrees to buy your property & can't wait until you return then for securing your rights into the property and your security into the sale consideration of it, it is advisable for you to ask for 10% of earnest money deposit and 40% of sale consideration paid to you in advance before taking possession. Also be very specific on terms of rest of 50% of the sale consideration by the time you return to India, so that once you are back you can execute the sale deed. 

4. Make sure that such an agreement to sell is registered document with sub registrar of the vicinity where the property is located. This will help you to make such document enforceable if in any case the purchaser fails to pay you the rest of the sale consideration. 

5. Make sure two important clauses are incorporated into the agreement to sell:

One, that the purchaser agrees to evacuate the property within a month from the date he fails to pay the arrears of sale consideration and the vendor may refund the sale consideration paid earlier after deducting registration and clerical cost incurred borne by him. 

Second, that it shall be sole prerogative of the vendor to sell the scheduled property to any third party if the purchaser fails to fructify obligations mentioned in this agreement to sell for consecutively three months/three installments. 


This perhaps suffices your requirements in query mentioned above

Pooja Ashar
Advocate, Ahmedabad
232 Answers
4 Consultations

5.0 on 5.0

not advisable

possession must be given only on receipt of full sale consideration

please refuse the buyer

Yusuf Rampurawala
Advocate, Mumbai
7510 Answers
79 Consultations

5.0 on 5.0

1. I think we have spoken in this regard over phone.


2. The only risk is that your buyer might refuse or neglect to pay you the entire sale consideration after taking possession of your said flat and in that case you shall be left with no alternative other than filing an eviction suit or application  for recovery of Possession which will take years to be disposed of.


3. Your position stands very vulnerable since your buyer knows that it will not be possible for you to filer and contest a case since you stay abroad.


4. You can very well hand over possession of the said flat to your said buyer, if he pays you the entire amount of the sale consideration.

Krishna Kishore Ganguly
Advocate, Kolkata
27219 Answers
726 Consultations

5.0 on 5.0


i am giving you simple and safe way to execute the deed:

- give a power of attorney to someone who can be trusted. but before that finalize all the terms with your buyer.

- prepare general power of attorney and get attested in your country and then send it to your attorney along with original documents.

- enter into sale agreement with the buyer (not required to be registered).

- inform your attorney about the sale agreement and send copy to him.

- the attorney will get the sale deed executed in his name. 


now money part:

take whatever amount he pays on sale agreement and mention it in the agreement. then clarify that take whole amount before giving possession. it is important to take complete amount before giving possession and for his satisfaction you can go to the place with keys and a possession letter. take money and give keys and possession letter. once this is done then get the sale deed executed.

cautioning you not to give possession before taking complete payment.

good luck

Advocate, New Delhi
384 Answers

4.9 on 5.0

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