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Ram (SE)     23 August 2013

Sale agreement cheating

Hi all,

1.This is a general question to the lawyer community of property law,Generally when an individual want to buy a plot from a layout,the developer of the layout wwho has the "General Power Attorney from the land owners demands that 30% of the land cost excluding the registration charges has to be paid at the time of sale agreement.

2.Now one of my relative has trusted this developer and paid the 30% amount by a cheque and the cheque is cleared to the developer's account,But after 30 days also there is no sale agreement done.

3.This is the general scenario across the real estate business customers dont have any hold.There is high possibility that he might sell the same plot with another agreement to some other customer.

4.Now my question is how to avoid this situation.There is possibility that the customer should ask the developer to do the sale agreement and then give the check,suppose if the customer defaults and if the cheque bounces can the developer cancel the sale agreement ? 

5.What is the minimum time that is required to prepare a sale agreement for a developer ?

6.How to ensure that the developer doesn't execute another sale agreement for the same plot number and sell it to another customer for a higher price ?

 



 10 Replies

Kolla Gangadhar (Practicing Advocate since 1986)     23 August 2013

Buyers must be Beware. Your friend paid 30% advance to buy plot from Power of Attorney Holder of  owner of land   issued cheque  and after one month Agreement of sale is not executed by G.p.A.   30% of sale consideration is credited to his account. You issue legal notice to G.P.A. to execute  Agreement of Sale 7 days from receipt of legal notice. G.P.A. fails to execute you file criminal complaint against him under section 420 I.P.C. At the time of issuing cheque or cash as advance/part of Sale consideration Agreement of Sale is not executed by G.P.A./owner you on white paper must write contents that cheque for rupees paid as advance/part of sale consideration etc., after cheque is credited to his account, Agreement of Sale will be executed and Revenue stamps should affixed on that signature of G.P.A./owner must be obtained,  2 witnesses signature must also to be obtained so that it will be treated as valid document for filing case or for recovery of advance/part of sale consideration paid.

Advocate Sastry (Advocate)     23 August 2013

Well advised by Adv. Gangadhar.

C.V.Kansara (member)     23 August 2013

I am in full agreement with Mr. Gangadhar

Ram (SE)     28 August 2013

How about paying the full cash and getting the sale agreement right away in the hand ? or How about DD ?

Advocate Sastry (Advocate)     28 August 2013

Better to give DD or Banks Pay Order

Ram (SE)     29 August 2013

Can someone answer this question please ?

How to ensure that the developer doesn't execute another sale agreement for the same plot number and sell it to another customer for a higher price ?

Also the developer might have sold the particular plot no in a layout by getting a full payment from a customer(not Availing a loan),How to ensure that the same plot which is already sold with full payment is not sold to me ?

Is there any khatha(karnataka) for individual plots in a layout so that we can verify ? 

Advocate Sastry (Advocate)     29 August 2013

Please contact local advocate for further guidance... Make detailed enquiries about reliability and capabilities of the developer.... You can enquire about  ventures developed by him earlier...

T. Kalaiselvan, Advocate (Advocate)     19 October 2013

These days any Sale agreement towards purchase of property are to be mandatorily registered before the concerned Registrar, that way an encumbrance is automatically created over the property intended to be purchased, hence obtain an Encumbrance Certificate and verify the adverse encumbrance before proceeding with the sale agreement/purchase of the property.  It is the only way to ensure that the property has not been entered upon a sale agreement/sale already with somebody else.

1 Like

Bharathy (Technology Consultant)     21 October 2013

Hello sir,

I have few queries.

Our apartment is a Joint Development Agreement between builder and land owner.

The flat that we have booked comes under Land Owner's share of flats.

We have paid the Advance amount of 20% of flat cost. The Sale Agreement is made between us and land owner. Builder represents the land owner as both of them have signed a General Power of Attorney.

The bank did not give 80% of the loan amount because we already had some open home loan.

Based on our eligibility, the bank agreed to give only 60% of flat cost. So balance 20% we have to pay.

Now my questions are:

1. The builder says that to get the sale deed registered I need to pay the balance 20% now.

    Only then the sale deed will be executed. Only then the Bank will disburse the loan.

    He says the bank wants us to pay our part (40%) fully before it can release the loan(60%). Is this true?

2. Can I register the sale agreement(contract only) and ask the bank to release the loan? Are you talking about sale deed when you referred to registering the sale agreement?

3. The builder has not yet completed the construction. Is the land owner eligible to sell the flat before construction is over?

4. For people who purchased the flats directly from the builder, both sale agreement and construction agreement were made between the purchaser and builder. But in my case, there was one single sale cum construction agreement. Builder (represents land owner - GPA) says, that's what happens when we purchase the flat from land owner. Is this true?

5. Is there any REAL benefit in registering the sale agreement (Contract between parties)?

6. When I asked for both Sale and Construction Agreements, my loan agent told me that I need to pay extra amount in taxes if that is the case. But the cost of Unidivided share of land + flat cost is accounted for in the sale cum construction agreement that they have provided. I am not sure how there will be more taxes if I go for separate sale and construction agreement?

Please clarify.

Thanks in advance.

Bharathy

 

 

 

Kolla V. Raman (Founder Chairman of Global Lgal Services)     23 October 2013

You have  to get sale agreement registered so that you will get stamp duty paid on it  will be adjusted at the time of registration of Sale deed, it is mandatory to register Agreement of Sale.



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