What are the key components of an agreement to sell?

Paying Token Money Safely

1. 1. 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.
   2. Use a Digital Escrow Account: Minimize fraud risks by protecting both parties in the registration of agreement to sell.
   3. 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"

1. 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.
2. Indemnity Clause: Protect against misrepresentation by holding the seller accountable for false information about the property's title or condition.
3. Property Description: Clearly define the property’s boundaries, dimensions, and conditions as outlined in the simple sale agreement.
4. Price and Payment Terms: Specify the total purchase price, token money, payment schedule, and down payment details.
5. Possession Date: Define the possession date and consequences of delays in the property sale agreement.
6. Exclusivity Clause: Ensure the property cannot be sold to a third party while the agreement is active.
7. Right to Withdraw: Allow the buyer to withdraw without penalties if obligations aren’t met.
8. Property Tax and Dues: Clarify responsibility for property taxes, maintenance charges, and other dues before finalizing the sale agreement with NRI.
9. Legal and Tax Liabilities: Allocate responsibilities for registration, stamp duty, and other legal/tax liabilities.
10. Force Majeure Clause: Protect both parties from unforeseen circumstances impacting the agreement.
11. Builder’s Warranty (for Under-Construction Properties): Specify timelines and quality terms in the property purchase agreement.
12. Penalties for Breach: Clearly define penalties for any breach by either party.

Also Read: Review of Agreement to sell