What are the key components of an agreement to sell?
Paying Token Money Safely
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- Pay via Cheque, Bank Transfer, or Online Methods: Always use a traceable payment method to create a paper trail, such as a property sale agreement receipt.
- Use a Digital Escrow Account: Minimize fraud risks by protecting both parties in the registration of agreement to sell.
- Limit the Token Amount: Keep the token money low, as it might be non-refundable if the property purchase agreement is cancelled.
Key Clauses in the "Agreement to Sell"
- Earnest Money Clause: Ensure the sale agreement with NRI or others has a clear clause for refunding token/earnest money if the sale fails through no fault of the buyer.
- Indemnity Clause: Protect against misrepresentation by holding the seller accountable for false information about the property's title or condition.
- Property Description: Clearly define the property’s boundaries, dimensions, and conditions as outlined in the simple sale agreement.
- Price and Payment Terms: Specify the total purchase price, token money, payment schedule, and down payment details.
- Possession Date: Define the possession date and consequences of delays in the property sale agreement.
- Exclusivity Clause: Ensure the property cannot be sold to a third party while the agreement is active.
- Right to Withdraw: Allow the buyer to withdraw without penalties if obligations aren’t met.
- Property Tax and Dues: Clarify responsibility for property taxes, maintenance charges, and other dues before finalizing the sale agreement with NRI.
- Legal and Tax Liabilities: Allocate responsibilities for registration, stamp duty, and other legal/tax liabilities.
- Force Majeure Clause: Protect both parties from unforeseen circumstances impacting the agreement.
- Builder’s Warranty (for Under-Construction Properties): Specify timelines and quality terms in the property purchase agreement.
- Penalties for Breach: Clearly define penalties for any breach by either party.
Also Read: Review of Agreement to sell