Cancellation of sale agreement and refund the advance amount

Venkataramann Prabhakar (Querist) 08 July 2020 This query is : Resolved
Dear sir,

I have few problems with my very first property buying It’s a resale Apartment in Chennai

1. Sale agreement was written on Rs.20 stamp paper Is It valid And the duration was mentioned as one month earlier but due to Covid we have extended it for four months. I have paid the advance of 10 % of my loan amount 3,00,000 on 3/3/2020.

2. But still registration not happened when I was cross verified with bank HDFC I came to know there are some legal documents to be provided by the seller Ex like current outstanding balance, list of documents available in KVB, last 2 yrs EC, clarity in sale deal, ext..

3. During my investigation I came to know that the seller has kept his documents on his brother‘s name (Builder) for developing Builder’s business taken an OD or mortgage loan in KVB. “Builder was going for a settlement with KVB where his outstanding was 19 lakhs for which he gave a bribe for the banker 1.5 lakhs from my initial payment and got a settlement for 15 lakh, but still he failed to provide the original documents to hdfc since he couldn’t pay the amount “This Statement was revealed by the builder to us.

4. As per in the mother document the plan approval was stilt +2 but whereas the builder has constructed his office and a warehouse in the ground floor in a common UDS and renting it. he also modified the apartment which I was planning to buy and that was not updated in floor planning

5. Due to Covid there is a possibility of losing my job so I requested Builder to refund the advance amount as the sale agreement due date was completed and I may not pay my EMIs due to drop in my financial status. moreover We came to know there are multiple issues like water problems, drainage issues Car parking Issues and he has pets like birds and dog which has many medical issues which has already bits other house holders twice, added to this builder has a nature of dominating others in the apartment.

By seeing all these things we planned to quit the plan of buying this property, But now the builder is not agreeing to repay my advance amount and moreover he is very stubborn with us .

So please help me since I don’t have any background support from my aged parents and other relatives..

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Quick Summary

This discussion addresses a buyer's request to cancel a property sale agreement and receive a refund of their advance payment due to several issues with the seller and the property. The buyer encountered problems with the sale agreement's validity, the seller's failure to provide essential legal documents, discrepancies in property plans, and concerns about outstanding loans against the property. The advice suggests issuing a legal notice to the seller detailing these issues and demanding a refund, with potential escalation to a consumer forum or court if an amicable resolution isn't reached.

Dr J C Vashista (Expert) 09 July 2020
Issue legal notice for termination of agreement with full particulars/ reasons thereof and claim the money paid to the vendor .

Rajendra K Goyal (Expert) 09 July 2020
You said:
1. Sale agreement was written on Rs.20 stamp paper Is It valid And the duration was mentioned as one month earlier but due to Covid we have extended it for four months. I have paid the advance of 10 % of my loan amount 3,00,000 on 3/3/2020.

Reply:

1. It is doubtful that the Rs. 20/- paid Stamp fee is sufficient. After search following rate is noted for agreement to sell: (please confirm situation from local lawyer)
Stamp Duty: 4% of the loan amount, subject to a maximum of Rs.40,000.
Registration Fee: 1% of the loan amount, subject to a maximum of Rs.2,00,000.

It is not a properly stamped document. You must be having proper documentary evidence of your payment through banking channel and otherwise. Discuss with local lawyer and send notice for refund.

You said:
2. But still registration not happened when I was cross verified with bank HDFC I came to know there are some legal documents to be provided by the seller Ex like current outstanding balance, list of documents available in KVB, last 2 yrs EC, clarity in sale deal, ext..

Reply:

2. Bank would not sanction loan if there is discrepancy in the documents. You should take letter from Bank in writing regarding discrepancy in the documents and inform the seller / builder accordingly.

Rajendra K Goyal (Expert) 09 July 2020
You said:
3. During my investigation I came to know that the seller has kept his documents on his brother‘s name (Builder) for developing Builder’s business taken an OD or mortgage loan in KVB. “Builder was going for a settlement with KVB where his outstanding was 19 lakhs for which he gave a bribe for the banker 1.5 lakhs from my initial payment and got a settlement for 15 lakh, but still he failed to provide the original documents to hdfc since he couldn’t pay the amount “This Statement was revealed by the builder to us.

Reply:

3. Send legal notice that Bank loan is outstanding on the property it is not free from encumbrances. Try to gather all proofs regarding overdraft taken on the said property.

You said:
4. As per in the mother document the plan approval was stilt +2 but whereas the builder has constructed his office and a warehouse in the ground floor in a common UDS and renting it. he also modified the apartment which I was planning to buy and that was not updated in floor planning

Reply:

4. It the construction is not in accordance with the sanctioned plan, mention the fact in your notice. Whether completion and occupancy certificate has been given to the project, if not take up with the seller. You can mention in your legal notice that the property is not being used for which it was constructed / common area is being used commercially / building is being used commercially/ not constructed as per sanctioned plan.

Rajendra K Goyal (Expert) 09 July 2020
You said:
5. Due to Covid there is a possibility of losing my job so I requested Builder to refund the advance amount as the sale agreement due date was completed and I may not pay my EMIs due to drop in my financial status.

Reply:

5. Ground of losing job is not a ground for refund, should not quote / mention it.

You said:
moreover We came to know there are multiple issues like water problems, drainage issues Car parking Issues and he has pets like birds and dog which has many medical issues which has already bits other house holders twice, added to this builder has a nature of dominating others in the apartment.

Reply:

6. Mention all these facts in your legal notice.

Rajendra K Goyal (Expert) 09 July 2020
You said:
By seeing all these things we planned to quit the plan of buying this property, But now the builder is not agreeing to repay my advance amount and moreover he is very stubborn with us . So please help me since I don’t have any background support from my aged parents and other relatives..

Reply:

7. Normally builder would not agree to refund the token money paid. Send legal notice and may move to consumer forum / court for refund.

Guest (Expert) 09 July 2020
Instead of seeking Legal Remedies better sort out the issue amicably on saying please.

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