A Purchase or Sale Agreement is a legally binding document signed by two parties: the person or entity who wants to sell a piece of property and the buyer who wants to purchase the property. It states the terms and conditions of the sale that both parties have agreed upon and makes sure both parties involved maintain their commitment to the sale.
The purchase agreement includes:
A Purchase Agreement consists of the following items. It is critical to thoroughly study the agreement to ensure that all terms and conditions addressed are written and detailed. Whenever there are any issues, contact with the vendor before signing the contract.
- In-depth property description
- Proposal to buy or a contract for selling the property in future.
- Disclaimer The property is free of legal obstructions.
- The worth of the property, in addition to the payment details
- Property delivery methods
- If the titles are in place, execute the selling deed and register the property.
- Payment refund due to incorrect titles
- Promise of delivery of the original documents after the full payment
- Action to take if the seller fails to complete the deal.
- Loss of advance payment in the case where the buyer fails to finish the deal
- Transferring tax-related papers
THE MANDATORY CLAUSES IN A PURCHASE AGREEMENTS
Right to Abort the Transaction
As a homebuyer, this provision is critical since it allows you to cancel the contract under specific conditions without being penalised financially. Some of the instances include:
If the proofs given by the seller are legally invalid.
Prior to signing the selling document, a legal flaw is discovered in the property.
The bank has denied your loan request owing to a legal/statutory problem in the property/property documentation.
At the time the sale deed is executed, the seller is unable to submit the original paperwork.
The Penalty Clause
A Purchase Agreement often states that if a buyer changes his or her mind about the transaction, the seller will lose the token money. To safeguard your interests, it is vital to note that if the seller does not proceed with the transaction, he or she will return the token amount paid by the buyer, as well as an equivalent amount as a penalty. Adding such language in the purchase contract makes sure the contractor isn’t selfish and sells the home to someone who offers a greater price.
The clause of indemnity
This provision is intended to safeguard the homebuyer in the event that the property is transferred under coercion/influence or effect, or if the seller’s legal descendants file a claim on the property. The reimbursement provision should state unambiguously that the purchaser is protected if there is a legal dispute or flaw in the property, and that the seller would reimburse the buyer for any losses suffered at the current market rate.
Unpaid dues
This paragraph should explicitly declare that the seller will settle any outstanding dues on the property, including electricity and water expenses, property tax, RWA charges, and so on, and will not seek payment for these costs from the buyer during the deed’s execution.
Force majeure
This provision states that if a natural disaster occurs, such as an earthquake, tsunami, or flood, neither the seller nor the buyer can compel one another to finish the deal.
While the Purchase Agreement is such an essential agreement. Hire a skilled lawyer to draft and sign the provisions, as well as thoroughly examine its terms, before signing on to the contract.
