Hi, My flat in Hyderabad has been let out to a tenant via an unregistered lease agreement of 11 month. I and the tenant have agreed that I will sell the flat to the tenant. But I want to register the sale deed after October 2023 to make it long term capital gain. We would not like to get the agreement to sell registered to avoid travelling, stamp duty, etc. In this context could you please confirm the following: - Is the unregistered agreement to sell enforceable? - How easy is it to enforce the recovery of the remaining proceeds as debt, as I have written in the contract. - Are there any practical or legal complications that I ought to be aware of as the tenant is in possession of the flat and I am a bit concerned about Section 53A in The Transfer of Property Act. The key part of the agreement is as below. CONSIDERATION FOR SALE - The SELLER has agreed to sell THE FLAT for a total sale consideration of Rs. 19,500,000/- (One crore ninety-five lakh only) to the BUYER and the BUYER has agreed to buy THE FLAT for the same amount. - The SELLER has received an amount of INR 500,000/- (Five lakh only) as EARNEST MONEY via online funds transfer to account number XXX of Mr. YYY maintained at HDFC Bank, Old Madras Road at Bangalore IFSC code HDFC0002047. - The BUYER has agreed to pay the remaining consideration of INR 19,000,000 (One crore ninety lakh only) before the time of the sale and registration of the property. - The balance amount of INR 19,000,000 (One crore ninety lakh only) shall be paid, as full and final payment, by the BUYER to the SELLER on or before 14 November 2023. The payment shall be made in equal amounts payable separately to each of the two members constituting the SELLER. The payment shall be made via account payee demand drafts or online bank transfer. TIMING AND EXECUTION OF SALE - That the sale of the FLAT shall be executed via a registered sale deed at any time of the BUYER’s choice after 13 October 2023 but before 31 December 2023 and after the payment of full consideration for THE FLAT. - The SELLER shall be bound to sign and execute all the relevant documents/ transfer papers pertaining to the sale of THE FLAT after receiving the balance amount and after 13 October 2023. CONSEQUENCES OF DEFAULT - In case the SELLER fails to get the transfer executed in favour of the BUYER, the BUYER shall have the right to seek appropriate legal remedies to force the BUYER to execute the transfer, in-line with this agreement. - In case, the BUYER fails to transfer the remaining consideration of INR 19,000,000 (one crore ninety lakh) on or before 14 November 2023, the SELLER will be entitled to recover the amount as debt along with 2% per month interest, compounded monthly. The two members constituting the BUYER shall be jointly and severally liable for the debt. After the recovery of the remaining consideration with interest, the SELLER will be obliged to execute the sale agreement in favour of the BUYER. <END>
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1) if you are selling flat for Rs one crore and ninety lakhs earnest money of Rs 5 lakhs is pittance
2) further period of 18 months for making payment is not in your interest .in addition buyer is in possession of flat
3) better option is to sell the property next year around august 2023 and give him 3 months time maximum to pay balance amount
4) un registered agreement for sale is enforceable
5) you can file suit for specific performance to recover balance amount
Yes he van seek appropriate remedies and cost under specific relief act
The unregistered sale agreement is not enforceable.
Don't give possession of property before executing the sale deed.
For executing the sale deed the buyer should pay the entire balance of sale consideration amount.
The buyer shall bear the stamp duty charges and other incidentals.
- An unregistered agreement is not enforceable for the transfer of property
- However it can be used for the recovery of the amount mentioned therein.
- The tenant cannot used that unregistered agreement for filing the performance suit before the court if he is in possession of the property .
- Since, it is a sale agreement , then it cannot be used as Debt recovery , hence if he not pay the remaining amount within the specified period as mentioned in the agreement , then you can forfeit the amount , and can file an eviction suit before the court. after terminating the agreement for getting evicted him from the tenanted portion.
1. Unregistered agreement to sell can't be legally enforceable.
2. To recover the agreed amount from the buyer, you have to file for specific performance in the jurisdictional Court.
3. There should have been a clause in the agreement to sell, that the buyer shall not invoke Section 53A of T.P. Act to his advantage.
Dear client,
Firstly, an unregistered agreement to sell is enforceable under Indian law. However, it is always advisable to register the sale agreement as it offers greater legal protection to both parties.
In case the buyer defaults on payment, you can enforce the recovery of the remaining proceeds as debt through a civil suit. As per the agreement, the buyer will be liable to pay interest at a rate of 2% per month, compounded monthly, in case of default.
Regarding Section 53A of the Transfer of Property Act, it provides protection to the buyer who has already taken possession of the property based on an unregistered agreement for sale. However, in your case, the buyer is already in possession of the property through an unregistered lease agreement, not an agreement to sell. Hence, Section 53A may not be applicable.
However, it is important to note that any agreement to sell or lease should be executed on a duly stamped paper as per the stamp duty rates applicable in the state where the property is located. Non-payment of stamp duty can lead to legal complications.
It is advisable to consult with a qualified lawyer in India to review your specific agreement and provide legal guidance on any practical or legal complications that you should be aware of.
