• Can we buy Property for which agreement registered and cancelled?

We have identified a property to buy - through Mediator. Seller[Mom and 3 daughters] informed us that, before few months another person[introduced by same mediator] has put agreement on that property,[ that he is willing to buy it and need some 3 months time]. Both the parties registered the agreement also. But since the buyer is not able to honor the agreement, they cancelled the registration. Now my question is 
1. Seller told us if we see EC, we can get clear picture that the agreement is cancelled. Is it true that if EC is clear and stating that agreement registration is cancelled, then the property has clear title?
2. All this is orally conveyed to us, how can we verify this information ?
3. If we decide to buy this property, will we face some issues in future by the earlier party who has put agreement and withdrawn?

We wanted to buy a property without any complications and clear deeds/titles. So please let us know even if there is a slightest risk in this case.
Asked 2 years ago in Property Law from Chennai, Tamil Nadu
Religion: Hindu
1) it is necessary to peruse agreement for sale  entered into between sellers and the original purchasers 

2) if agreement has been cancelled with consent you can purchase the property 

3) take search in sub registrar office and verify factual position 

4) issue public notice before you purchase the property 

5) if original buyer has not consented to cancellations he may move court and seek stay of sale of property 
Ajay Sethi
Advocate, Mumbai
45617 Answers
2680 Consultations

5.0 on 5.0

1. The cancellation deed should also be a registered deed as the original agreement was registered. So if the cancellation deed has been registered then the earlier buyer cannot claim any right to the property.

2. The above being said, a comprehensive title search should be conducted in the office of the sub-registrar through a lawyer to ensure that the title is free and marketable.

Ashish Davessar
Advocate, Jaipur
22977 Answers
634 Consultations

5.0 on 5.0

1.  A registered sale agreement can be cancelled by a registered cancellation deed, both the entries will reflect in the EC. 
You must probe the reasons that why the previous buyer decided to cancel the sale agreement and also whether the vendors have marketable title to the properties.
Get a legal opinion from a local lawyer to be doubly sure about teh genuineness of the property under sale.

2.  You have to get the photocopies of all the relevant documents concerned with this property and also obtain EC from registrar's office, produce it before an advocate for his legal opinion, confirm its genuineness before purchase, if the vendors do not or reuse to part with the documents then dont go ahead, insist on production of copies or else drop the idea for the safety of your investment. 

3.  The previous buyer has no right once the sale agreement was cancelled by a cancellation deed, he cannot trouble or harass the new buyer.

Always take a legal opinion from a local experienced lawyer.
T Kalaiselvan
Advocate, Vellore
35807 Answers
390 Consultations

5.0 on 5.0

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