Cancellation of Sale Agreement
I entered into a sale agreement on 7th Aug 2016 for sale of independent house in Hyderabad. A token advance of rs 1 lakh was paid by cheque which was never encashed. The agreement was made on a Rs 100 stamp paper and not registered.
The house was bequethed to me by my father through his notarized Will. The property was mutated in my favour by GHMC on the basis of this will in 2014
The agreement had specific clause saying agreement is time bound and expires on 30th sept 2016 if the sale deed is not executed by that date for any reason what so ever.
The Agreement also had a clause that I would hand over vacant possession of the property at the time of registration of sale deed.
The tenant in the property made a claim for buying the property at the same rate. I had advised them to sort out amongst themselves. The matter was not resolved and the agreement holder did not execute the sale deed or offer to pay the balance amount at any time.
On 26th Sept the Tenant sent a lawyers notice saying that I had not complied with the documents and not provided clearance from my siblings ( My only brother is dead and this is mentioned in the will ) and that The notice states that the time limitation in the sale agreement is now become inoperative, The notice also referred to having a tenant in the property. That I should confirm my readiness to execute the sale deed and that i should not enter into agreements with any third party.
I responded to the notice on 29th sept by speed post delivered on 30th sept AM and by e mail to the lawyer on 29th, saying that I was always willing to hand over possession on the date of registration. however the buyer had never come with proof of funds needed to complete the registration or shown me the draft sale deed. Further I stated that the documents were all available with him from even before signing the agreement and the request for additional documents such as sibling clearance was never made by the buyer either verbally or in writing.
I had sent a termination notice on 1st October and returned the unencashed cheque by speed post.
The agreement holder subsequently said verbally that he was not pressing for execution of the sale deed and returned his copy of the sale deed to me. saying verbally that I am free to sell the property
Now my tenant says he is willing to buy but he is asking that the previous agreement be cancelled through a deed of cancellation since a lawyesr notice was sent. Is this essential in view of ?
1. My having both copies of the previous sale agreement with me
2. The previous sale agreement was not registered or notarized.
3. The agreement holder had sent a legal notice
Asked in Property Law from Hyderabad, Telangana
1) deed of cancellation Should be executed as purchaser had sent you legal notice
2) it is true that you have never encashed the advance cheque
3) that sale agrrement is not notarised or regd
4) purchaser had returned his agreement copy
5) inorder to play safe better execute deed of cancellation
1. The agreement to sale was unregistered, which you had unilaterally cancelled through your notice. If you now tell the previous prospective buyer to come and execute a cancellation deed he will not do so.
2. The cancellation deed is not required as the agreement was not registered.
The demand by the tenant who has offered to buy this property is illegal and not justified legally.
The previous sale agreement was an unregistered document hence it is not enforceable in law and also the legal notice has no value since it was replied properly and the consensus was arrived between the vendor and the buyer accordingly the unregistered sale agreeent was cancelled.
You can inform the tenant that legally there is no issue and if he still insists on such meaningless issues, he may drop the idea of buying it and you may look for a better buyer ignoring his proposal.
The tenant in question and his wife are lawyers practising in High court in Hyderabad. She is also a close relative ( Rakhi sister ) whom i have known form her childhood and is the daughter of my father's closest friend who was also a lawyer and is no more. They had both purchased the property out of one plot with our house behind and the other house in front.
My father had let out the downstairs portion of the house to this lady and her husband for use as their office when we moved to an apartment for our convenience in 2002. As mentioned earlier, the property came to me through my father's will which was witnessed by both these lawyers.
I decided to sell the property in September 2015 and offered it to them first out of courtesy and closeness of relationship. At that time they expressed inability to buy and did not object to my making a sale to others. I struck a deal in Dec 2015 and informed the tenants that I was entering into an agreement for sale. at that point they said they were prepared to buy the property at the price I had agreed to the other buyer. I persuaded the other prospective buyer to back off and he reluctantly agreed. It was agreed that the sale would be registered in April. because of close family relationship I did not insist on any advance or a sale agreement and nothing was documented.
In April when the time came for registration, at the last moment the tenant backed out saying he was not able to organise funds and that I could sell the property to outsiders and that he would vacate the house by 1st August 2016. The old buyer came forward once again to buy the property. We agreed in principle but no agreement was signed or advance taken. In the meanwhile I was following up with the tenants about their status on vacating the property. The lady said they were moving into the ground floor portion of their residence which is in the front plot. The GF portion belongs to her sister who lives in the US and they said they had made an agreement to buy that portion out. In the last week of July, she even showed me the vacant and cleaned out house where they were to move out. To my specific question, she also told me that I could go ahead with documentation for sale . After this I signed the agreement mentioned in my earlier question with the buyer. On signing the agreement, the Tenant once again, put a hurdle and said that he would buy the property himself and that he had objection to my selling to the proposed buyer as he runs hostels for girl students. After this i had told both the prospective parties to settle between themselves as to who would buy. since the settlement could not be reached, the agreement timed out because of a specific time bar in the agreement. The Agreement holder was considerate and without further ado, let his notice lapse and returned his copy of the agreement. He is even willing to sign a cancellation deed.
Now, the tenant is showing little interest to buy the property as he is enjoying a 1200 sft office for a paltry Rs 5000 per month in the centre of Hyderabad. The upstairs portion which is unoccupied is in my custody. The GF portion was built in 1961 and the upstairs in 1981
I seek guidance on what I should do to force him to either complete the sale transaction or vacate the property so that i can sell it to genuine buyers.
Asked 6 months ago
1) tenant is not interested in purchasing your property
2) dilatory tactics are being adopted to frustrate any sale of property
3) issue notice ti tenant to vacate the premise
4) if he refuses files eviction suit
5) then sell the property
The tenant is not a genuine person and his intentions may be to grab the property with low cost or even without it by putting pressures on you in the form of said hurdles.
You can very clearly issue a notice asking him to vacate the premises since you re planning to dispose the property and also can mention that since he failed on three attempts to buy the property though he indicated his willingness to buy, it will not be possible to accommodate his request for extending anymore time to facilitate him to buy the same.
You can issue notice to vacate with on week's time and initiate legal action to evict him by due process of law.