Property Sale.

What are the Earnest Money, Advance and Security Deposit in the sale of an immovable property?

The law in general says that an amount paid under an agreement for sale of an immovable property is liable for forfeiture. Earnest Money, Advance and Security Deposit though have similarities, are basically different.
Earnest Money is the money paid by the purchaser under an agreement for sale to bind the seller in performing the contract. It is his guarantee for performance of the contract. When the transaction progresses, the earnest money becomes a part of the purchase money if it fails to click for purchaser's fault, it is forfeited to the seller.
Advance is the token amount paid by the purchaser to the seller expressing his intention to purchase the property. Though it is treated as part of the sale price, it cannot be treated as guarantee for completion of the contract and it cannot be forfeited if the purchaser fails to complete the sale. Security Deposit is the amount paid by the purchaser to the seller as guarantee for fulfilling the contract. If there is an agreement to the effect that amount deposited is only for guaranteeing due performance of the contract, it cannot be forfeited, unless the agreement contains a penalty clause for compensating the aggrieved party.
These words are often misused in some agreements. Many times we have found the usage of the word 'advance' for the word 'earnest money'. In such situations, the intention of the parties can be understood from the contents of the written agreements, the actions of the parties and the nature of the agreement.

In what ways the seller can deceive the buyer of an immoveable property?

There are many ways to cheat a purchaser. Some of them are detailed below.
a. The seller may have encroached upon some body else's property. He may create fake documents and try to sell the same.
b. The government or other public authority may have acquired the property. The seller will conceal this information from the buyer and collect the price. Later, the purchaser will have to shed tears when he is forced to part with the property in favour of the government or any other public authority.
c. The seller may be holding the property in joint name or jointly with some other person. He will sell the property without the knowledge of that person. Later on the joint owner will create problems, and the purchaser will have to spend the rest of the life in the corridors of various courts.
d. The seller may not have original title deeds of the property. In the absence of the original title deeds, the purchaser will find it difficult to get loan or mortgage the property when necessary. Some times, government authorities or courts may call for original title deeds during the process of litigation.
e. The seller may have entered into agreements with several purchasers and collected the advance amount from all the purchasers. He will then quietly and unworriedly watch as to who wins the game finally.
f. The dimension of the property may be actually smaller than what the seller has actually agreed to sell.
g. There may be hidden nuisances like under ground drainage, public bore well etc. in the property, which the seller wants to sell.
h. The property may have been attached in favour of some other person through a court order.
i. The seller may be selling an agricultural land and passing it off as a residential site.

What is Khata? How important it is to ownership of a property?

Katha is a certificate issued by the revenue officer of City Corporation in respect of the property and its owner as it registered in the books of the corporation. It is very important document because whenever a property is sold the purchaser ascertains the ownership of the property title by checking the records maintained by the department.

Before purchasing a property is it necessary to give a Public Notice in a newspaper?

While scrutinizing the documents of the property, an eminent advocate well versed in property matters, even though can trace ninety percent title sometimes may not be able to trace encumbrances like prior agreement, equitable mortgage, court litigation etc. with respect to the property. Therefore, to safeguard the interest of the purchaser, it is advisable to give a Public Notice in a leading local newspaper before purchasing the property. It is not binding on any claimant to answer to such notice. However, if any bonafide claimants are there, they will inform about their right, title and interest in the property with documentary proof. Also such notice will inform the public at large that the purchaser is a genuine buyer of the property.

When does a sale become void?

Payment of price is the essence of the transaction of sale. A sale is a transfer of property for a price paid or promised to be paid. If the promised price is not paid the sale becomes void.

About Us.

Welcome to
Property Affaire is technology driven One-Stop-Shop for Global Real Estate Investment Solutions. Property Boutique Showcases the Projects of Select Global Developers to HNI investors in India and NRI’s worldwide.

Our USP’s :
  • 100% Transparency
  • Professional Advise on Real Estate Investment in India & Abroad
  • Property Management Services

contact us.

Delhi +91 9310335608