Buying A House? 5 Clauses That You Must Add In Sale Agreement
Property transactions are high in value and a buyer has to tread cautiously because his hard-earned money would be at stake if anything goes wrong. Keeping that in mind, you should be careful while signing a property sale agreement.
Makaaniq lists five crucial clauses which you must incorporate in the sale agreement of your house to safeguard your interest.
This clause safeguards you against any damages or losses. Owing to the property boom, a large number of properties are entangled in litigations. Some of the most common reasons for legal disputes are
A. Property was transferred under influence/coercion/force.
B. Legal heirs of the seller claim their right on the property.
The indemnity clause an agreement to sell protects the buyer against any legal dispute which may arise. Don't fail to mention that in case of any legal dispute, the seller would compensate you for any loss at the prevailing market rate. This clause should be drafted carefully and should include all possible scenarios.
When a sale agreement is signed, the buyer pays some token amount to the seller. Generally, a line is added stating that if the buyer backs out from the deal, the entire token amount would be forfeited by the seller. It is advisable to add another line in this clause that in case the seller backs out, he will return the token amount along with an equivalent amount as penalty. It usually happens that the moment the seller gets a buyer who can pay him more, he cancels the previous deal. A penalty clause in the agreement would stop him from doing that.
Right to call off the deal
The buyer should also reserve the right to call off the deal under any of the given circumstances without being penalised financially:
- If the seller does not provide valid legal property documents to the buyer.
- If the buyer comes across any legal defect in the property before the sale deed is executed.
- If your home loan application gets rejected due to some reason.
- If the seller fails to provide documents at the time of execution of the sale deed.
- If the seller fails to provide vacant possession of the property at the time of execution of the sale deed.
The agreement should also outline that the seller will clear all the outstanding dues in respect of the property prior to the date of registration.
Transfer of deposits
The sale agreement should clearly mention that the scope of agreement should also include the transfer of all deposits paid by the seller for electricity connection, water connection, apartment owners' association, club house membership and gym membership. In the absence of this clause, the seller might demand extra money at the time of sale deed against all the deposits paid by him.
Also, it is advisable to hire a good property lawyer to draft the sale agreement and the sale deed.