Cancellation of Agreement of Sale
I had executed a Sale of Agreement for purchase of open PLOT in hyderabad and paid advance of Rs.500,000 (Five lakhs) in 2 spells (Rs.50,000 a week before through cheque and Rs.4,50,000 cash on this day of agreement) and the remaining amount Rs.24,00,000 (Twenty four lakhs) to be paid on or before registration which is agreed to be within 40 days. Based on my legal enquiry I understood that document first owner had expired on 03-03-2015 and the property was registered to above Vendees by his wife and Daughter represented by Power of Attorney registered at Mumbai and validated in Hyderabad. However no legal heir document is produced nor any other valid document that claims the executers are only legal heirs for this property. They had attached only death certificate of owner. Every banker asking for legal heir document as mandatory for providing the loan despite I have eligibility. So I approached Vendee to provide me the legal heir copy. He said it is not possible to bring ( not sure why he says like that). Hence I asked him to cancel the agreement and return my advance amount of Rs.5,00,000 (Five lakhs) as he failed to provide necessary documents. He is playing cleverly with me, he says until the property is sold to some other party my money cannot be returned. However, since this is legally not valid document, it is impossible for any other party to come forward to purchase the property and my agreement becomes invalid in next 25 days from now. In this situation please advise what kind of action can I initiate to get my complete advance amount.? I have a legal opinion document given by advocate as well, which also says legal heir is required. Even today I am ready to go for registration upon producing the legal heir document, if not I should be returned my advance amount with expenditure incurred on property in the form of enquiry and interest lost on my amount. Please advise what is the approach I should adopt.
Asked 8 months ago in Property Law from Hyderabad, Telangana
1) you should send letter to seller that title to property is not clear and marketable
2) mention that you had approached bank for loan and bank has informed you of inability to disburse loan in absence of legal heir certificate
3) inform seller that inspite of repeated telephonic reminders he had failed to provide legal certifcate . hence you have no option but to cancel agreement and seek refund your advance money paid by you
4) if he fails to refund file suit to recover Rs 5 lakhs advance paid by you
1. The opportune time to conduct due diligence with respect to the marketability of the title is before and not subsequent to the execution of the agreement to sell. If there is no clause in the agreement to sell which mandates that the current owners i.e the daughter and widow of the original owner should obtain a legal heir certificate and deliver the same to you then they have the right to either forfeit the advance amount in terms of the agreement or sue you for specific performance to execute the sale deed.
2. You may issue a lawyer's notice for cancellation of agreement to sell to the sellers to seek refund of the advance amount, which will be governed by what is stated in the agreement itself.
You should issue a legal notice to the vendor demanding the legal heirship certificate of the deceased property owner. If he fails to produce the same you should inform that you are cancelling the sale agreement for his failure to produce the essential documents to prove the title hence he is required to return the advance amount with interest immediately or else he will be dragged to court for recovery process.
After that you can file a money recovery suit agaisnt him on the same grounds and also file a petition in the same suit requesting for attaching the property for security purpose before judgment
Sir, thank you all for your valuable advises. Appears to be I can initiate a legal action in the event of non producing the legal heirship certificate of diseased owner or if he doesn't accept to return my full advance amount. However, Based on Shri Ashish Davessar's advise clauses stated in the agreement will govern the action that I can initiate I believe. No specific clause is stated in agreement that Vendors to produce legal heir-ship certificate of diseased owner. However I can find one clause which seems to be most relevant in my case which states in the agreement that. "This agreement is subjected to the title of the property being approved by the purchasers after perusal of EC and his opinion shall be final". What is the impact of this clause, will I get justice in my favor ? or still does it considered to be forfeit if I cancel the agreement? Please be advised this agreement was prepared by real estate broker who felicitated this deal and he is relative of the Vendors.
Asked 8 months ago
1) as purchaser your decision that tithe is clear and marketable is final
2) seller cannot forfeit advance paid by you as tithe is not clear and marketable
The title to a property flows from the sale deed thereof. If the owner has died and the property has devolved through succession then the clause which you have extracted stands satisfied. The clause cannot be interpreted to mean that they have to produce legal heir certificate. It was wrong on your part to sign the agreement prepared by the agent.
However I can find one clause which seems to be most relevant in my case which states in the agreement that. "This agreement is subjected to the title of the property being approved by the purchasers after perusal of EC and his opinion shall be final". What is the impact of this clause, will I get justice in my favor ?
This is the one which will apply for the production of legal heirship certificate because until then the title of the property shall not confirmed upon the intestate death of the original title holder/owner.
or still does it considered to be forfeit if I cancel the agreement? Please be advised this agreement was prepared by real estate broker who felicitated this deal and he is relative of the Vendors.
You need not worry about any clause or anything, the rule or law in this regard is very clear, if you dont get justice, the court will provide you that. The vendor may be the relative of the real estate broker, that does not means that he will indulge into illegal activities.