13 Things To Know About Agreement To Sell
An agreement to sell is an important document in property transactions. This is why all the terms and conditions included in the agreement of sale must be understood thoroughly by both parties and obeyed throughout the sale process.
- It is a contractual property agreement between the buyer and the seller to sell a particular property on particular terms and an agreed-upon price.
- It is not an actual sale but a written promise to carry out the contract at a future date.
- Registered under the Indian Contract Act, 1872, the contract is legally binding on both the parties.
- A roadmap on how property transaction will be completed, the sale agreement or agreement to sell is a precursor to the Sale Deed where actual transfer of property takes place.
- In the contract, usually two to three months' time is given to the buyer to arrange funds and carry out any other formalities before the actual transaction takes place.
- As the document has legal sanctity, both parties mutually agree to include certain clauses in the contract.
- These clauses can be related to penalty for not honouring the contract, right to call off the deal, terms and conditions pertaining to who will pay the outstanding dues, etc.
- The agreement clearly states the names of the buyer and the seller, the size of the property, its direction, carpet area, etc.
- The type of property is also listed in the contract, i.e. if it's a freehold, leasehold or mortgaged property. The terms and conditions in the case of the leasehold or mortgaged property are also spelled out.
- In the contract, the seller pledges to give the property free from all encumbrances, and the buyer promises to bear the cost of transfer of the property.
- The token money that is paid is also listed along with the manner in which the remaining payment is to be made.
- A dated document, the contract is signed by the parties in the presence of two witnesses.
- It is advisable to get the document made from a lawyer, who will understand your needs and concerns and draft the agreement accordingly.
Last Updated: Fri Aug 19 2016