IMPORTANCE OF AGREEMENT TO SELL
Today, we're diving into the world of real estate and talking about two essential documents the sale deed and the Agreement to sale.
Imagine you've found your dream house. The agreement to sale is like a promise to buy it. It outlines the key terms of the sale, like the agreed-upon price, the completion date, and any contingencies.
THE AGREEMENT TO SELL
An agreement to sale is a preliminary contract outlining the key terms of a sale between a buyer and seller. It is an Important legal document which establishes the intention of the parties to buy or sell the property and agreeing on terms of the contract. It's an essential tool that helps prevent misunderstandings and disputes by clearly defining the expectations and responsibilities of each party involved. It is an important document that establishes the intent of the parties to buy and sell the property and the terms of the sale, including the purchase price, payment schedule, possession date, and other important conditions.
IS THE AGREEMENT TO SELL A VALID LEGAL DOCUMENT AND IS IT LEGALLY BINDING
It is essential for buyers and sellers to understand the legal implications of an agreement of sale and to ensure that all terms and conditions are clearly defined and agreed upon before signing the contract. That is why An agreement to sell is usually executed before the actual sale deed or conveyance deed is signed, as it allows both parties to negotiate and finalize the terms of the sale.
The Agreement must be entered freely without any pressure or fear and without any undue influence or coercion. The misrepresentation of property must not be the case. When both parties sign the document it becomes legally binding for both of them to fulfill all the obligations mentioned In the agreement. Breaching them can result in legal consequences if either of the parties doesn’t follow the terms the other party may seek legal remedies, such as specific performance, damages, or the cancellation of the contract
Both parties must understand the legal implications of the contract and the terms of the agreement which are to be performed.
PURCHASE PRICE AND PAYMENT TERMS
The purchase price is very important in the agreement to sell when an immovable property is being purchased or sold. The agreement should clearly state the purchase price of the property. Including deposit and Down payment is made. This Agreement to sell should clearly define the payment schedules and payment terms (Bank loan and details)
All the payments that are made to the party In any form (Cash, cheque, Digital payment, Demand Draft) should be mentioned in the agreement to sell and cheques and Demand drafts are considered to be the safest possible option for the payment which is advisable and beneficial for both the parties.
In payment terms, the closing date is also very Crucial when the buyer party has to complete the all payments of the seller and should also specify any contingencies before the transaction Is completed.
When the Bank payments are involved the property is mortgaged to finance that purchase In that case the contingencies are on the buyer to obtain all the required financing approvals before the agreement of sale.
INSPECTIONS AND DISCLOSURES
The seller should disclose all the information about the property and the buyer should do all inspections prior to finalizing the transaction and signing the contract
The buyer has right to ask for the inspection report of the property which can be a title clearance of the property or no dues certificate regarding the property. In land dealings it is important to specify that who is going to pay the inspection fees.
The seller should also disclose every defect in the property. Any faults or repairs which are in the property should be disclosed. Or any major problem in the documents or there is no violation of the legal rights of individuals. If that in case the Seven days notice is given in the newspaper that the property is being sold and if any individual has any stake in the property can seek his/her right on the property within the time if no notice is received in the span of those seven days then the property can be sold, then parties can agree to sell.
STAMP DUTY ON AGREEMENT TO SALE
As mentioned in section 17 of the Registration Act 1908, All the transactions that involve the sale of immovable property for a value exceeding Rupees 100 (Rupees one hundred only).
the sale should be registered and It is effective. Different states have different stamp Acts according to which the percentage changes.
The buyer is liable to pay the stamp duty whenever an immovable property is transferred. The amount of stamp depends on the state in which the property is situated as well as the value of the property. It is important to note that the amount of stamp duty payable on an Agreement to Sell is generally lower than the stamp duty payable on a sale deed. This is because an “Agreement to Sell” is only a preliminary contract and does not transfer property ownership.
Along with the stamping the Agreement is to be signed by both the partiesand it is registered is attested by the Notary Agreement to sell is a compulsorily registrable document along with one witness of both parties if any dispute arises.
DEFAULT AND REMEDIES
The agreement to sell also address what will happen of any of party defaults on the Agreement if buyer fails to make the payment the seller is entitled to keep deposit or advance as security or not or what legal actions can be taken against the buyer for the completion of the transaction . In the case of a loan, how much delay should be tolerated and late by late when all the payments will be cleared?
On the other side if the seller fails to provide a clear title to the property means there might be legal issues or claims by other parties on the property it can complicate the purchase or any important fact that is not disclosed at the time the buyer can ask for the refund of any token or amount that has been paid in favor of the seller regarding this property.
CONCLUSION
In conclusion, a property sale agreement is a vital legal document that helps to protect both the buyer’s and the seller’s interests during a real estate transaction. It outlines the terms and conditions of the sale, including the price, payment terms, closing date, and any contingencies that must be met before the sale can be completed. Sale and Agreement to sell, as effectively expressed, appears to be under a similar nonexclusive name yet at the same time it is to be treated under various classifications. Along these lines so as to set up a deal there must be an understanding communicated or inferred relating to the idea of items and satisfaction of the condition would result in going off the title in the very products contracted to be sold. These two ideas of offer and consent to deal is itself a powerful idea.
It doesn’t limit itself to the Indian Contract Act of 1872 and the Sale of Goods Act, 1930. However, it also extends to the Transfer of Property Act 1882 and the Motor Vehicles Act 1988. Anyway to comprise a substantial agreement to sell under this Act, there must be consistent and persuading proof regarding understanding between the able competent parties, the cost for the products, and the passing of the properties of the products. Consequently without the genuine exchange of possession of the merchandise, by the seller to the buyer, there can be no deal by any stretch of the imagination
A well-drafted land sale agreement can provide both parties peace of mind and help ensure a smooth and successful real estate transaction. Whether you’re buying or selling a property, taking the time to create a comprehensive and legally sound purchase and sale agreement can make all the difference in protecting your investment and achieving your goals.