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Gopi Krishna B   04 December 2016

Breach of sale agreement by buyer reasoning demonetization

I am from Chennai, Tamil Nadu

I agreed selling my 13 year old property for 33Lacs to a buyer and registered the sale agreement document on September 15 with buyer complying to register the Sale deed in 2 months. He has paid an advance of 2 Lacs and said the rest amount he'll pay via cheque (bank home loan) and cash.

I requested him to extend the sale agreement dates for his convenience as bank loans sometime gets delayed in process, but he assured having close relationship with the bank manager and have it registered on time.

Since by mid November the property will be sold, I got shifted from that house to a rented house on 1st week of November and informed the buyer about this. One week after Nov 8 news of demonetization (time for end of sale agreement), he called me saying his bank loan is rejected and he's going to apply in another bank where he could get the amount sanctioned in 15 days. My home is mortgaged to SBI which has a balance on my home loan, so as the agreement was breached already i asked him to pay the monthly EMI i am paying to bank for the next month which he agreed upon until the sale deed registration.

I had a meeting with him today where he said his home loan is sanctioned for 22 lacs and the remaining 9 lacs which he was to pay by cash he cannot due to demonetization. I asked him to pay by cheque but he's afraid of coming under Income tax radar. Now he wants to cancel the sale agreement + wants his 2L advance back.

From the conversation, his stress was more on cancelling the sale agreement some how and less being the IT scrutiny for his rest 9 Lacs amount to be paid from account. I feel he has dropped the idea of buying my home and is making the demonization reason/excuse. May be since the real estate price drops he would have changed his mind going for a new house for same price rather buying my 13 yr old one.

And I have spent most of the advance amount he has given during my relocation in expenses like rental advance (1 lac), relocation expenses (30k), etc. in the scenario i need to return.

 

I needed your expert advise here as;

1. From the forum on this site, I've seen we can send legal notice to buyer to have the sale deed registration within 15 days else his advance amount can be forfieted and i can sell this property to some one else - but there wasn't a demonetization scenario then.

2. Sale of this property is an urgent need for me + i can't give him his advance amount immediately (can take 6 months). I can go through this legally as point 1, but wanted to consider solutions if any that can be amicably solved.

Thanks in advance.



Learning

 1 Replies

saravanan s (legal advisor)     04 December 2016

If he doesn't agree to point no 2 then you have to proceed as per point no 1

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