Agreement To Sell & The 5 Important Clauses
An agreement to sell is at most times a written statement having terms and conditions related to sale and purchase of a property. It is advisable for the buyer to carefully study the content of the Agreement for Sale as it is a legally binding document.
Wide-ranging technical terms are presented in the Agreement to Sell / Agreement for Sale, they ought to be understood completely. Seeking advice from a legal expert is always a good idea in this context.
A verbal agreement to sell however convenient has proven to cause complex situations thanks to minimal or no evidence; a written agreement is foolproof though. The document upon acceptance with a signature transfers ownership from one party to another.
Important Clauses In A Sale Agreement
Every legal document consists of clauses that carry significant meaning. A clause can be a sentence, paragraph or a part of a document that identifies a situation that may arise in the future and directs a lawful course of action.
The buyer of a property is always at more risk than the seller. Having the following clauses in the Agreement to Sell is a must to ensure there is no issue in the future for all parties concerned.
1.Indemnity Clause
It is highly possible that a property may come under dispute for varied reasons. About 40 percent of the properties in Bangalore City are in a dispute, many of them spanning over a few decades. An indemnity clause secures the interests of the buyer, it must be drafted with diligent foresight to avoid any dispute in the future.
Indemnity clauses in an Agreement for Sale are designed to seek compensation from the seller should there be any losses or expenses in the future. All possible scenarios must be taken into account before drafting the indemnity clause.
2. Penalty Clause
Token amount is generally paid by the buyer to the seller to assure his interest in buying the property. Sometimes, the sale may not happen for a genuine reason or the seller might find a better deal and he may not return the token amount. To ensure the seller does not make a business out of such transactions a penalty clause is advised.
3. Transfer Of Memberships/Advances/Deposits
This clause prescribes the seller to pass on all privileges and conveniences that he may have had during his ownership. Deposits made by the seller for club memberships, electricity, gas, gym subscription are a few examples.
4. Right To Call Off The Deal
The right to refuse and call off the agreement helps the buyer or the seller to cancel the deal without any implication. Reasons to call off the deal may range from personal disputes and financial constraints to loan refusal.
5. Outstanding Dues
It helps to have this clause in the Agreement to Sell as it prevents the seller from passing his outstanding dues to the buyer. Taxes, electricity/sewage/water bills etc are covered in this clause.
Agreement to Sell – Legal Advice
As emphasized above, the agreement to sell while transferring an ownership safeguards a lot of potential problems. A few technical terms may confuse the most learned of parties. Hence, understanding the Sale Agreement by seeking expert advice, protects your best interests while solving any issues before they arrive.
