Any kind of property sale agreement requires the document that should cover all salient features to avoid getting into any ambiguity in future. The Agreement for sale is the first step that brings the seller and the buyer under binding conditions whether it is purchase of a land for construction of home or a purchase of an apartment from the builder. The document needs to be scrutinized minutely before signing. It may not be possible for a buyer to appoint a lawyer at this initial stage, especially when the deal is not big enough to add legal expense. An agreement for sale lays out terms for all future course of action and responsibilities on either side.An Agreement of sale is considered as a legal document in case of any dispute if the document is registered although there is no mention in the court of law that a sale agreement has to be a written one. A sale agreement is simply a statement that the seller is willing to sell and the buyer is willing to buy on their acceptable terms which may be written or unwritten as used to happen in earlier days in villages in presence of village elders! In practice many builders convince the buyers that an agreement of sale need not be registered as it will attract stamp duty on the value of the property as per the circle rate. But buyers must remember that an unregistered Sale agreement will not hold well in the court of law in case of dispute. The IPC has many provisions to protect buyers though the seller can also contest. The Section 55(1)(f) in The Transfer of Property Act, 1882 elaborate regarding the obligation on both parties. The Consumer Protection Act, 1986 is the Act which seeks to provide for better protection of the interests of consumer. The Real Estate Regulation and Development (Act, 2016 (RERA). This Act governs development, marketing and sale of real estate projects to protect the interest of consumers in the real estate sector
The basic framework of a Sale Agreement
A sale agreement must clearly mention the complete detail of the seller/s and the buyer/s supported with address proof, photo identity, and reference to the title deed of the property in official records with registrar’s office. The agreement should carry the description of the property with a certified building plan and floor plan. In case of land purchase the agreement needs to see if the property is freehold and other relevant papers and documents in record. The legal aspect of the property can be checked by appointing a lawyer to verify the document from the government records accessible against small fees by appointing a lawyer. The clauses in a sale agreement are important because they outline everything that will go into making this a successful transaction, which is completely legally correct.
‘Property Sale Agreement’ comes under Indian Contract Act, 1872, the Regulation Act, 1908, and transfer of Property Act. There have been several amendments made to make these Act more explicit.
An Agreement for Sale has to include the following clauses:
Payment Terms: The Agreement must very clearly mention the negotiated price of the property along with detail schedule of payments. Normally for a project under construction, the payment is scheduled on the basis of stages of construction. While buying a ready flat the payment terms are specified as per the mutual consent and normally payments are completed on or before taking possession of the flat. It is better to seek legal assistance while signing the Sale Agreement to avoid any dispute in future. A reputed builder will have their legal cell to assist a buyer.
Property Title: Bank or any financial Institution shall only provide financial assistance (Loan) if the title of the property is clear. A property must not be under any lien or mortgage. The sale agreement must clearly mention about the obligation of the seller to legally transfer the title of the property in the name of the buyer immediately upon completion of making full payment for the property in the local registrar office.
Stamp Duty: The rate is fixed by the relevant authority and revalued time to time depending upon market price. The Circle rate also varies from location to location. The stamp duty is a state matter and varies from state to state. Under society act the stamp duty is different from the stamp duty charged for a property which is not under cooperative society act. A cooperative housing society requires minimum ten members upper limit is not specified.
Sale Deed: It is a final document transfer complete right of property specified fully in Agreement of Sale from the seller to the buyer under the seal of the respective registrar office under the jurisdiction of the state. When there is a large number of sale deed are to be executed under one premise, Government Registrar may set up bench in the premise following all proceedings. This facility can be availed by paying a defined charge in the Registrar’s office.
KW Group's Anthem.