Agreement to sale validity
Querist :
Anonymous
(Querist) 04 May 2011
This query is : Resolved
An agreement to sale (ATS) was executed in Tamil Nadu by six legal heirs of the property (Located in Chennai) on a stamp paper of Rs. 20, purchased by our father on 18th May 2010, after six years of his death with two prospective buyers. Our mother died before my father died.
A Token amount was given to all the legal heirs and it was stated in the ATS. It was further stated that the purchaser has to pay the balance amount in equal share to all the vendors and get it registered with in 90 days from the date the last vendor signing the ATS as the vendors are signing the ATS on the different date due to the fact some of them are residing out side the state of Tamil Nadu but with in India. The last vendor signed the ATS on 12-06-2010. Accordingly the performance should have taken place on 12-09-2010.
On the due date in spite of various assurance given by the buyers the sale could not be done even today ie 04-05-2011. Buyers are giving lame excuses and trying to delay the issue. Recently they had told that instead of sale deed they prefer to go on power of Attorney basis to avoid stamp duty etc., followed by sale deed and to show less amount of sale consideration. From this it is clear they are the genuine buyers instead brokers looking for a hike in the price and to sell later.
Since the forfeiture clause was not mentioned , they had not come forward to take back the advance money. On our enquiry, they insisted that they are interested in purchase and as per the law of land (TN) the ATS is valid for three years though for specific 90 days is mentioned. Neither he is allowing for a new buyers to come.
Shall be grateful if the clarification is provided on the following quarries which is roaming in my mind.
1. Is the ATS is still valid even after the expiry of 90 days.
2. Under which Law the indirect assumption of validity of three years of ATS is applicable as conveyed by the buyer.
3. Can they prevent the new buyers and create problem at the time of registration
4. Are we bound to return the Advance money though the forfeiture clause is not there. We are interested for the specific performance even today as per the ATS. Can we take legal action against the buyers on specific performance.
5. Since they are not demanding the advance money how to pay them. Is it to thro court or any other alternative is available.
R.Ramachandran
(Expert) 04 May 2011
If all the vendors are united and agreeable, then on behalf of all of them, engage a single lawyer. Give a lawyer's notice calling upon the buyers to honour the agreement and to pay the entire amount within .... such and such period, else it will be deemed that they are not ready and willing to purchase the property. If they do not come forward and pay the balance payment and get the sale deed executed by ..... date, then you would not be bound by the ATS and you would be free to enter into any fresh sale agreement with a fresh buyer.
After this notice, if the buyers do not come forward then you can proceed afresh. In the meanwhile, after receiving your legal notice, they may approach the court and may obtain order against you restraining you from entering into any fresh agreement, which you have to fight.
Querist :
Anonymous
(Querist) 04 May 2011
Dear Mr. Ramachandran
Thanks for the reply.
It is a catch 22 situation. Your first para is encouraging. How ever in the second sentence of second para, it appears we are at the mercy of the buyer. What is the purpose of doing an action as suggested in para 1, if finality can not be reached or expected. In that situation can we not approach the court for the specific performance of the buyer. IT should take a shorter time and in the court either he will say that he is interested to conclude the deal in such in such time or if he is silent/ignoring our petition, can we get ex-parte judgement invalidating the ATS and permitting us to go for fresh sales.
What will happen in some of the vendors reluctant to go to court or approaching separately? Can I sell my share (1/6th) to the new buyer (if he is interested) and get out this situation without making any partition. Or Can I make a family settlement of my undivided portion to my son (not to two daughters) who is in abroad.
Shall be grateful if you could provide some more information on the above points. I really thank you for responding my quarry.
R.Ramachandran
(Expert) 04 May 2011
Dear Anonymous,
As a lawyer, I approach the issues professionally and not emotionally. I have a detached attachment to the issues. Hence, I put things in proper perspective - disregarding the likes and dislikes of the querist. I try to forewarn the querist about the possible moves of the opponent. Thus, while saying what you could do in a given situation, I also apprised you about the counter attack which you may have to face. If my saying so is wrong, then I am a great SINNER.
Having said that, let me tell you, that without cancelling the ATS, you will not be able to sell your share to any fresh buyer, nor will you be able to do any settlement of the property in favour of your son(s)/daughter(s).
The entire agreement to sell being in a single piece (meaning thereby that the entire property as a whole is being sold - not any person's individual share alone) it is expected that you vendors must act in an unison manner. Otherwise, if some one is ready to give some more time to the buyer and if one or two is not willing to give that much time, it will only complicate the matters. It will not be conducive for achieving your purpose.
Yes, you can straight away approach the court for specific performance. In that case, you cannot simultaneously ask for cancellation of the ATS.
That is why I suggested that you should send a legal notice asking the buyer to abide by the terms and conditions of the contract - to make payment immediately and to get the sale deed executed. In case he fails, then you people can approach the Court for cancellation of the ATS. Then it will be his turn to ask for specific performance, whereupon depending upon the situation either you can ask the court to give the time frame within which he has to make the full payment, or oppose the buyer's plea for specific performance since he did not reply even to your legal notice. He was not ready and willing to perform his contract etc. etc.
ALL SAID AND DONE, a lawyer can only suggest, he cannot compel anybody to act in a particular manner. IT IS FOR THE PARTY TO TAKE THE ULTIMATE DECISION AND TO MOVE FORWARD.
All the bests.
Querist :
Anonymous
(Querist) 05 May 2011
Dear Mr. Ramachandran
Thanks and appreciate your professional approach as against emotional.
I respect your comments and observations.
Legally, by entering into this type of ATS, though 90 days or so time is mentioned for executing the sale indirectly I am binding with the buyer for 3 years.It is indigestible. Is there any legal language which we can incorporate in future which will make the ATS time barred after the expiry of the period mentioned therein.
Regards
