Agreement For Sale From Prospective Of Rera
The object of the Real Estate (Regulation and Development) Act, 2016 and its rules is to resolve the disputes raised or to be raised in the future between buyers and sellers of residential, commercial or any other properties on which the act is applicable. But as per saying precaution is better than cure so before purchasing any property both buyer and seller shall execute an agreement for sale. An agreement for sale is an important document in any property transactions. The agreement of sale must be understood thoroughly by both parties and obeyed throughout the sale process.
- It is a contractual property agreement between the buyer and the seller to sell a particular property on particular terms and an agreed-upon price.
- It is not an actual sale or sale deed but just a written promise to carry out the contract at a future date.
- As per RERA if 10% or more amount of consideration of the property is paid by the buyer, the agreement for sale must be executed by and between both the parties.
- The agreement for sale should be registered with the sub-registrar office under section 17 of the Indian Registration Act.
- It contains a roadmap on how property transaction will be completed and this agreement for sell is a precursor to the Sale Deed where actual transfer of property takes place.
- As the document has legal sanctity, both parties mutually agree to include certain clauses in the contract.
- In the contract, the seller pledges to give the property free from all encumbrances, and the buyer promises to bear the cost of transfer of the property.
- A dated document, the contract is signed by the parties in the presence of two witnesses.
- Before applying for agreement for sale/booking any property the buyer should verify all legal documents of the land on which the property is constructed or to be constructed i.e. ownership documents, purchase deed/development agreement, village form 7 and12, copy of index and any other land revenue records, title search and clearance report/certificates issued by the advocate who is having the experience of not less than 10 years, copy of all types of plans, commencement letter/ approval for development from local authorities .
The agreement clearly states the following details:
- Complete details of buyer and seller which includes his name, father’s name, address, PAN number and in case of owner of the property is other than original owner than authority from the original owner by way of power of attorney
- Full bifurcation of the property into carpet area, balcony area, wash area etc. and in case of plotting scheme area of plot
- details of the property’s location and municipal, taluka (administrative division) or collector’s land record number
- Clause of total consideration, token money and Payment schedule (as per RERA)
- RERA registration number (if the same is applicable)
- Date of possession
- Clause of structural defect for at least 5 years warranty/guaranty
- List of amenities to be provided by the seller common for the scheme and any specific for such person.
- Clause on declaration of availability of FSI and its use (if any)
- Clauses related to penalty for not honoring the contract, right to call off the deal, terms and conditions pertaining to who will pay the outstanding dues, etc.d
- Increased variation cap in final carpet area (allowed up to 3%)
- Dispute resolution clause
- Cancellation of ultra virus (severability clause)
- It should contain whether the property is freehold, leasehold or mortgaged and in case of the leasehold or mortgaged property are also spelled out.
So it is advisable to get the document made from a lawyer, who will understand your needs and concerns and draft the agreement accordingly.
