It is necessary to peruse terms of MOU to advice
2) it is not on your interest to accept nominal amount
3) exit clause ought to protect your interests
MoU from builder for redevelopment
My father's inherited property is currently going for redevelopment in Mumbai. Builder is offering an MoU with a relative/investor that he will pay a certain nominal amount (token amount)t and the rest in after DA is signed in two stages before IOD . He said DA to be signed after couple of months after MOU I feel this does not protect my interest. Is if safe to sign MOU with nominal token amount . Will exit clause /termination clause in MOU safe guard protect my interest in case there is delay from developer's side
Asked 3 years ago in Property Law
Religion: Hindu
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8 Answers
1. No risk is involved in signing such MOU receiving token amount.
2. Remaining consideration can be collected after execution of DA.
3. You can make time limit essential part of DA adding penal clause for liquidated damages on failure to adhere to time line.
Hello,
- If youfeel dissatisfied about having to sign the MoU by taking a nominal amount, the choice is yours still either to demand a bigger amountir reject the proposal.
- Definitely, the exit / termination clause should protect your interest provided it is well drafted a s time is made the essence of the contract.
- Get the MoU vetted by a lawyer to ensure that your interests are sufficiently covered as the builder would usually get the draft prepared with greater priority to protect his interests.
You can include the clause time as essential in the MOU and can insert clause which would clearly express penalty for the delay or exit if the limitation is crossed beyond tolerable limit.
You should ensure that your interests are protected both in the MOU and the DA.
It is advisable that you get the MOU vetted by a local lawyer and proceed only if recommended.
it all depends how the MOU is drafted
and i am curious to know why the DA would be signed in 2 stages?
your query gives very little information
it is required to be known who all have inherited the property from the late father
and what do you mean when you say 'relative/investor'
in most probabilities if the property is owned by the late father then the builder would requisition for an heirship certificate from the legal heirs or a Letter of Administration
considering that i assume that he wants to bind the party by a MoU for now
you will have to have the MOU vetted by a competent lawyer
mostly what happens in such matters is that the builder binds the party by a simple MOU and if the party wants to back out then he sues that party by filing a suit for specific performance of contract so that the party is somehow pressurized to succumb to the builder's demands
so tread with caution
- You can enter into the MOU with the builder after mentioning the exit & termination clauses of the ground of time limitation and penalty for delay.
- Further, you can mention that if there is delay due to fault of builder then the token amount will be confiscated. and even penalty can be charged .
Dear client there is no harm to sign the mou with token amount however you can include the clause which is beneficial for you in the mou itself.
Yes it's not the proper way
