Selling

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Selling

 

Q : What is a Sale?

 

Ans: Sale is a transfer of ownership in exchange for a price paid or promised or part paid and part promised.

 

Q : What is an immovable property?

 

Ans: Immovable property can be defined as including land benefits, out of land (interests in land) and things attached to the earth or permanently fastened to anything attached to the earth.

 

Q: Is it mandatory to have a written Sale Agreement?

 

Ans: Although, law doesn’t orders to have such a written agreement, but, practically, it is advisable to enter into a written contract. This ensures that both the contracting parties perform their part of obligations. Moreover, oral agreements cannot be proved in court.

 

Q: Is it necessary to get the Sale Agreement registered?

 

Ans: Yes, it is mandatory to get the agreement registered. If, in any case, it is not registered, as required by law, then the title is not legally passed on to the transferee and the deal is not considered to be a Sale.

 

Q: What is a Contract of Sale? What constitutes the contents of contract of sale?

 

Ans: A contract for the sale of immovable property is a contract laying down that the "Sale" of such property shall take place on the terms settled between the parties in the said contract.

 

It includes the following clauses:

 

  1. Property description.
  2. Personal contact details of the signatory parties: seller and buyer.
  3. Negotiated price
  4. Manner and type of payment.
  5. Description of the title of the transacting property.
  6. Stipulated time period within which the transaction has to be completed.
  7. Provisions of the payment of the stamp duty.
  8. Registration and execution of the sale deed.

 

Q: Does the contract transfers any charge of ownership of property?

 

Ans: No, it does not transfer the ownership of the property, but gives a sort of obligation with respect to the ownership of property.

 

Q. What is the importance of a Sale Agreement?

 

Ans: A sale agreement outlines the terms and conditions under which sale is completed. In case, there is no written agreement, the deal is governed by "Transfer of Property Act".

 

Q: What is price?

 

Ans. Price, meaning money, is an important ingredient for all transactions of sale. The transfer is not regarded a "Sale" in the absence of price or the consideration. It can be paid in cash or be partly paid and partly promised to be paid in future.

 

Q: What is a latent defect in property?

 

Ans. A latent defect is a defect which cannot be discovered by the buyer with ordinary diligence.

 

Q: Which all acts govern the sale of property?

 

Ans. The following acts govern the sale of property:

 

  1. Indian Contract Act, 1872 - It governs who all are competent to enter the contract of sale of property.
  2. Registration Act, 1908 - It provides for the registration of instrument of sale during sale of property.
  3. Transfer of Property Act- It defines the rights and duties of buyers and sellers before and after the sale.

 

Q: What if a sale of property is not registered with the concerned authorities?

 

Ans. Then in that case, the title of the property is not considered to be transferred and the transaction is considered to be a illegal sale of property.

 

Q: What precautions shall be taken before purchasing any property?

 

Ans - Ascertain the owners; verify title deeds, link documents, encumbrances, and court attachments etc. under the advice of a Lawyer.

 

Q: What does the term 'Freehold Property' mean?

 

Ans. When ownership rights for a piece of property are given to the purchaser for a price that property is referred to as Freehold Property.

 

Q: Before purchasing property owned by a company, what aspects should be considered?

 

Ans. Before purchasing property from a company, it is necessary to verify with the Registrar of Companies that the property is not mortgaged or is not being used as a security against a loan; otherwise it is not considered a freehold property.

 

Q: How can the authenticity of some documents can be verified while entering into any sale purchase transaction?

 

Ans. The authenticity of the documents brought into use can be rechecked by availing legal services of an advocate.

 

Q: Does the agreement for sale have to be registered?

 

Ans. The agreement for sale between the Seller and purchaser has to be registered as required by the law of the land. One must register within four months from the date of execution of the Agreement at the office of the Sub-Registrar appointed by the State Government, under the relevant Registration act.

 

Q: What is Valuation?

 

Ans. A valuation process is undertaken to ascertain the fair market value of a property. A scientific valuation goes beyond the parameters of the demand and supply forces that dominate the real estate market. Other factors that form vital inputs for a scientific valuation would be maintenance, quality of construction, location, the infrastructure of the area, the nature of the property, - whether freehold (or leasehold, if leasehold then the period of lease etc. in case of flats). A valuator would normally adopt two or three different techniques separately to determine the property value and then compare the results to arrive at the correct value.

 

Q: What constitutes conclusion of the sale?

 

Ans: The transfer of a property is coupled when you have an ‘agreement of sale’ coupled with actual possession. Generally, in all cases the entire amount is paid simultaneously with handing over of physical possession. If you give possession after having entered a sale agreement, you would be liable to be taxed even if you have not received the full consideration.

 

Q. Legal Checklist for selling property

 

Ans. The checklist for selling property is as follows:

 

  1. Finalizing the terms and conditions of the deed
  2. Providing the duration for compliance of various terms and conditions mentioned in the contract;
  3. Procuring the consent, permission, sanction, no objection certificate of:
  4. The society if applicable
  5. the income tax authority if applicable
  6. the Urban Land Ceiling authorities if applicable
  7. the Municipality if applicable
  8. any other authority, if applicable
  9. Getting it stamped by paying applicable stamp duty
  10. Not handing over the title deeds and possession until the payment of consideration.
  11. Engrossing the Deed
  12. Registering the Deed