Hi, I am selling my 2 bedroom flat in Kolkata. The Sale Agreement is being made and according to it, the buyer will be paying me in 3-4 installments all through Cheque, and the last cheque he will give on the day when Deed of conveyance is signed and I am supposed to give possession Only after I receive full payment in my bank account. There is also a clause in the Sale Agreement that the agreement will be terminated if buyer does not makes full payment within 30 days from execution of deed of conveyance. I mainly want to know if this is the usual norm in a resale property? My only concern is lets say the last cheque that the buyer gives me at the time of sigining of the sale deed, bounces..so will I be protected? I would have signed the Sale deed by then even though the Possession is with me. Will the Agreement protect me in this case or I must Sign the Deed of Conveyance Only after I receive the Full amount in my Bank account? If this is the norm I want to go with it since then the buyer may get worried(if I stick to full payment demand). Please advise. Thanks Deepak
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1) it is always better to insist on full payment be made at time of execution of sale deed by demand draft
2) you can deliver vacant possession on full payment being made and sale deed executed.
3) you should not execute sale deed if buyer is going to make balance payment 30 days after execution of conveyance deed
4) get agreement vetted by local lawyer
you can execute sale deed in part payment of sale amount, bur it is not mandatory. if you execute sale deed and he does not pay remaining amount within stipulated time period then you have to file a suit for cancellation of sale deed so it is better to receive full amount at or before the execution of sale deed.
Ok so from what I could make up from your answer, I should either sign the Sale Deed only after full payment is received in my bank account or if the last payment he makes on day of Sale Deed is through Demand draft and not cheque, right?(As demand draft not likely to bounce unlike a chque).
for avoiding future litigation and also for the securing of rights of both person you can execute an agreement of sale in absence of witness and without stamp [ muaabd-a-vay ] with condition that final sale will be executed on the payment of full consideration.
1) you should insist on demand draft only
2) also verify that demand draft is genuine or not
You can ask for the buyer to make the payment by way of a NEFT or RTGS Transfer and this can be done on the day of registration itself, the transaction reference number can be quoted in the sale deed which will be evidence enough of payment having been made and duly acknowledged by you through your bank account.
this will save exorbitant D.D charges as well.
think about this option as well.
This is quite usual. If the final cheque bounces then you will have the remedy of filing a criminal case for cheque bounce apart from a suit for recovery with compensation against him. To be on a safer side, a clause may also be added in the agreement that provides for conveyance to be made after the last cheque is encashed. Alternatively, the last installment should be made through a demand draft.
You should not be concerned about the buyer's worries. You should be concerned with your own problem of receiving the full amount before you are executing the deed of conveyance. Please be informed that the deed of conveyance is nothing but the execution of registered sale deed and the handing over of physical possession is different subject.
Once you have executed the registered sale deed in his favor you have no rights to hold the property, instead the clause should be that if the cheque for the final payment or any payment, bonces back from the bank without payment then the sale deed is liable to be cancelled arbitrarily by the vendor for the said reason. This would enable to you to safe and secure about the transaction as well as the sale consideration amount you are due from the buyer.
Ok so from what I could make up from your answer, I should either sign the Sale Deed only after full payment is received in my bank account or if the last payment he makes on day of Sale Deed is through Demand draft and not cheque, right?(As demand draft not likely to bounce unlike a chque).
This can be the best option to avoid problems in this regard including safety for your money and your property.
1. You can sign the deed of conveyance while collecting the last cheque to deposit the same to your Bank immediately,
2. You should register the said deed of conveyance only after the last cheque amount is credited to your account,
3. Alternatively, you can execute the deed of conveyance after the amount is credited to your account.
1. Please note that just signing the deed of conveyance does not transfer the title of the flat to the buyer, the registration of the said deed of conveyance does,
2. So, you can sign the said deed of conveyance but refuse to register the said deed until the said cheque amount is credited to your Bank account.