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Raghav Arora   28 July 2025

Can an agreement to sell be made with another party while an agreement to sell is pending with anr?

So a client wants to buy a prop and she is buying it from a broker who is in the process of buying the same from the original owner. 
The broker has executed an ATS with the original owner but registry is pending. 

The client wants to seal this deal soon. Is it safe to get an ATS executed before the broker gets registry done and concludes the deal with the original owner?

 

Or will it be valid and we can go for the ATS and later go for regy when he has perfected his title?



 9 Replies

T. Kalaiselvan, Advocate (Advocate)     28 July 2025

If the land owner has already entered into an agreement to sell his property with the broker then it would be pertinent that the buyer should ensure that the owner cancels the agreement with the broker and then enter into an agreement or a registered sale deed iteslf directly with the buyer subseqeuntly. 

Raghav Arora   28 July 2025

A little misunderstanding here Selvan Sir. 

Basically, broker made an ATS with the 1st owner to buy his prop. 
His registry is due in a month. 

Now we came in touch with him and he showed this property to us saying that it is his own property (Since he has almost completed the process of buying it). 

Now we want to conclude this deal and make sure we can buy the property. 

So if we sign an ATS with the broker with specific clause that he will sell it to us once the deal between him and the original buyer is concluded, will it be okay?

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     28 July 2025

Signing an Agreement to Sell (ATS) with the broker with a specific clause that he will sell the property to you once the deal between him and the original buyer is concluded can be a viable option.

However, consider the following¹: - *Nature of ATS*: An ATS is a contract that promises to transfer the property in the future. It doesn't create any rights on the property for the buyer. -

 *Priority of Agreements*: If the broker has already signed an ATS with the original owner, your ATS will be secondary to the existing agreement. -

*Risk of Default*: If the broker fails to complete the purchase from the original owner, your ATS may become unenforceable. -

 *Specific Performance*: In case of breach of contract, you may have to seek specific performance through the courts, which can be time-consuming and uncertain.

To protect your interests: - *Include a clear clause*: Specify that the ATS is contingent upon the broker completing the purchase from the original owner. -

*Define obligations*: Clearly outline the broker's obligations and responsibilities. -

 *Specify consequences*: Include provisions for damages or compensation in case of breach of contract. -

*Registration*: Consider registering the ATS to provide a public record of the agreement.

 It's advisable to consult a lawyer to draft and review the ATS, ensuring it meets your needs and protects your interests.

kavksatyanarayana (subregistrar/supdt.(retired))     28 July 2025

It is better to obtain the sale deed directly from the owner.  Otherwise, it may lead to legal complications.

Raghav Arora   28 July 2025

Got it Sir. 

Also, there is a claue in the ATS between Original seller and the broker who is buying the property from him, which says that the buyer may get the execution in his name or his nominee, once he pays the consideration under the agreement to the original buyer. 

In this case, can I ask him to let the property come directly to my client as a nominee of the broker?

T. Kalaiselvan, Advocate (Advocate)     29 July 2025

A sale deed can be executed in favor of the agreement holder or their representative, as per the terms outlined in the sale agreement. The sale agreement typically specifies the conditions under which the final sale deed will be executed, including the party (or their representative) to whom the property will be transferred.  Therefore if the broker is ready to request the sale deed to be registered on your name after you pay the sale consideration amount to the broker, the land owner can directly execute the registered sale in your favor. If the agreement allows for the sale deed to be executed in favor of the agreement holder's representative, this means that the property can be transferred to a person or entity authorized by the agreement holder

Raghav Arora   29 July 2025

Lovely. So in this case Sir, how should the payment be made? 
Should I pay all of it to the broker or will it go to the original owner and after that the original owner and the broler and share it as they want? 

Or should I pay it to the broker and out of that, he keeps his margin and gives the rest to the original? 

Why I ask this is because it is prudent in my thinking that the money should go to the person from whom I buy the property and not to any other account, lest it should be open to being challenged later on. Am I thinking right here? 

Also, what should I definitely definitely keep in the clause to make sure I am keeping my client super safe. 

T. Kalaiselvan, Advocate (Advocate)     29 July 2025

You being the buyer of the property, hence it becomes your duty to pay the sale consideration amount either to the vendor or to the person he auorises or as per the conditions of  any tripartite agreement  among the trio i.e.,  the vendor, broker and you.

It is advisable that you better enter into tripartite agreement with proper terms and conditions.

P. Venu (Advocate)     29 July 2025

Whatever the procedure chosen, the broker cannot, as per the extant norms. execute conveyance in his capacity as the agent of the original owner.


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