Is MoU essential in a real estate deal?
A purchaser, say XYZ LLP has agreed to buy our (family owned) residential plot. They have given us an interest letter (on their letterhead) stating that they will complete the transaction within 45 days from Public notice. We have replied to their interest letter accepting their offer price and timeline stated (on plain paper). Now, the purchaser is insisting on signing an MoU before publishing the Public notice. The purchaser has provided the MoU draft wherein the purchaser is/are one of the director(s) of the said LLP and another individual i.e. they are buying the plot in the name of two individuals (no mention of XYZ LLP in draft). Also, the draft contain terms and conditions which are pro-purchaser without mentioning any timeline and/or payment schedule. Though, the purchaser has agreed for us 'sellers' to mention terms and conditions which we want or suit us to make it balanced. Purchaser has also agreed to give us a cheque as earnest money. We have also agreed that full payment will be made prior to execution of conveyance deed. Hence, We want to know:
1. Which other terms & conditions we can mention apart from timeline and payment schedule to safeguard us 'sellers' from any claim, litigation from the purchaser in future?
2. Is an MoU legally binding after signing it? e.g. if we don't encash the cheque (earnest money) would the MoU be legally binding. So, If we want to cancel the deal we can just return the cheque as is?
3. The purchaser has also asked to get MoU notarized upon signing. Would that have any adverse implications for us (the sellers)?
4. We are insisting on issuing Public Notice and Purchaser is insisting on MoU, how can we resolve this issue?
5. Is it essential to sign an MoU in such a scenario?
Asked 8 months ago in Property Law
Thank you for your response(s). Any comment on this:
The purchaser(s) has provided the MoU draft wherein the purchaser(s) are one of the director(s) of XYZ LLP and another individual i.e. they are buying the plot in the name of two individuals (no mention of XYZ LLP in draft) ??? Whereas, Interest letter is given on XYZ LLP letterhead, signed by Director (one of the purchasers).
Asked 8 months ago