• Buyer has failed to complete sale agreement within stipulated time

We had made a sale agreement on 03 Dec 2020 for sale of my house. Time period was mentioned as 3 months to complete the sale deed.Buyer paid advance money 10 lakhs. He has failed to keep the time due to some problems. Time was the essence of the agreement.
I had acquired another property,but could not pay in time. Hence I had to sell all my other assets at a low price to pay for the new property to avoiy any litigation. Besides I have undergone lot of mental stress. No penalty clause was mentioned in sale agreement.But I wish to deduct certain percentage as damage caused to me. Kindly advise
Colonel S B Nag
Asked 10 months ago in Property Law
Religion: Hindu

4 answers received in 1 hour.

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10 Answers

It is necessary to peruse terms of agreement for sale to advice 

 

2) you can forfeit advance payment received by you if there is forfeiture clause in agreement 

 

3) if there is no such clause you have to refund advance payment received by you 

Ajay Sethi
Advocate, Mumbai
85547 Answers
5730 Consultations

5.0 on 5.0

You can deduct certain percentage only if agreement for sale contains such a clause 

Ajay Sethi
Advocate, Mumbai
85547 Answers
5730 Consultations

5.0 on 5.0

1. Send a legal notice to the buyer to conclude the contract as the 3 month's time has elapsed.

2. It's not clear in your narration as to, whether the agreement of sale is registered or not?. 

3. If the buyer, in reply to the legal notice received, comes out with cancellation of agreement of sale, then refund his advance amount only after deducting the penalty amount. Buyer can't take you for granted. Perhaps this buyer is a reseller and wanted you to commit for the sale of your property and he would have sold it to a third-party after keeping sufficient profit margin, without registering the property on his name.

Shashidhar S. Sastry
Advocate, Bangalore
3950 Answers
237 Consultations

5.0 on 5.0

If there is no clause on deduction for cancellation of sale agreement,  you can not do so. Its good this agreement is mutually cancelled.  Had he refused to cancel it nor agreed to buy the property immediately then you would have been stuck for many years. 

Devajyoti Barman
Advocate, Kolkata
22515 Answers
373 Consultations

5.0 on 5.0

Hello,

  1. You can write to the buyer that as time is the essence of the Agreement and as he has failed to do fulfill his part of the contract, the entire amount paid in advance remains forfeited and so refuse a refund.
  2. Alternately, you can reduce whatever percentage that goes to cover your loss and state the reasons for the deduction in your letter to the buyer. 

S J Mathew
Advocate, Mumbai
3356 Answers
166 Consultations

5.0 on 5.0

Even in the absence of any penalty clause of default, you are entitled of deduct the expenses incurred by you due to failure by buyer to get the sale deed registered in time. Calculate expenses suffered directly and indirectly and transfer the balance if any. You need not have to go anywhere, if at all the buyer intends he will go the court, the same can be defended by engaging Advocate  by you.

Ravi Shinde
Advocate, Hyderabad
1654 Answers
21 Consultations

5.0 on 5.0

If the buyer did not or was not ready to perform his part of contract to pay the balance of sale consideration amount and get the property registered, since the time was essence of contract, you may issue a legal notice stating that since he failed to perform his part of contract the sale agreement stands cancelled and you may inform him that he may collect the advance amount.

You cannot deduct any amount at your convenience which may be considered as an offence under criminal law, however you may deduct a minor amount towards administrative costs while returning the advance amount.

If the agreement was done by a registered document then you may have to execute a cancellation deed jointly with the buyer.

 

T Kalaiselvan
Advocate, Vellore
75676 Answers
1313 Consultations

5.0 on 5.0

You cannot take law into your hand.

On what basis you think that you can deduct some percentage of amount from the advance paid by him?

Being a senior citizen do not get into unnecessary troubles by indulging in any such illegal acts. 

T Kalaiselvan
Advocate, Vellore
75676 Answers
1313 Consultations

5.0 on 5.0

- Legally , both the parties are bond with the clauses mentioned in the sale agreement . 

- Hence, as the buyer failed to comply the same and further execute sale deed in his favour after paying balance amount of consideration within the specified time , then legally you can cancel the sale agreement after issuing a legal notice to him. 

- Further, you can claim damages from him as well. 

- You should send him legal notice for cancellation of agreement , and to deduct the amount from his advance paid amount. 

Mohammed Shahzad
Advocate, Delhi
8791 Answers
94 Consultations

5.0 on 5.0

Dear Sir/Maam 

In cases of breach of agreement for sale the damages that can be claimed by the aggrieved party depends first on the clause that are in the agreement. If there are no such clause in respect of penalty for breach or non fulfillment of conditions in the contract by the buyer, you will have to file suit for damages in respect of breach of contract.

Thank you

Anik Miu
Advocate, Bangalore
3311 Answers
34 Consultations

4.9 on 5.0

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