5 Time Bombs in a Sale agreement which are ignored by you.
While reading a sale agreement we are so engrossed on checking on the possession date, property area, consideration amount and payment schedule that we happily ignore other clauses which could really bleed an unaware purchaser. Mentioned hereunder are 5 points which could prove to be a nasty shock for you if you were too hasty in signing on the dotted line.
1) Who pays your stamp duty? I’ll make a wild guess and say, YOU. If this is true, then shouldn’t the stamp duty challan bear your name as a duty payer? Yet major projects will register their firm/s name as stamp duty payer. In case you are wondering how could a name on a challan matter, let me inform you that in case of cancellation, only the duty payer is liable to receive stamp duty amount back from the government. If your name is not mentioned on the challan as a duty payer you are not eligible to apply for stamp duty refund. All those lakhs paid as taxes by you will be beyond your reach. You will have to request the builder/s to apply for the stamp duty refund procedure. Post cancellation a builder/developer isn’t particularly interested in your struggles, if they choose to apply for a refund, the amount will be transferred in their account by the government and then if they feel generous then the amount will be transferred to your account. This may take half a year or couple of years. Be aware, be careful that you find the clause which mentions how they will handle stamp duty refund. It is prudent not to leave the refund procedure in their hands and to Insist that your name be entered as a “Duty Payer” on the challan and not as the “Other party”. For more details about stamp duty refund procedure read “Can stamp duty be refunded”
2) Stamp duty refund also requires original documents, would you be able to point out the clause which states who will receive these documents in event of cancellation? Don’t worry 99% of the sale agreement/s don’t mention this at all, but what will you do if the builder/developer claims that they need it and will not be able to provide them to you after cancellation? Talk with the legal team of the builder/developer and make them understand they you will need the original document in event of cancellation. Insist that they put in writing that in event of cancellation the original copies shall be handed over to you for refund procedure.
3) Often in event of cancellation, the consideration amount paid by the purchaser will be reimbursed to the purchaser only after the builder/developer manages to sell that particular flat to another person. Your money gets locked with the builder until he finds another purchaser for your flat. Since when is it a purchaser’s responsibility to maintain the liquidity of the builder/developer? Ensure that you ask the builder/developer to change this particular clause in a way that you will receive your amount immediately post-cancellation.
4) In event of cancellation, the consideration amount paid by the purchaser will be reimbursed to the purchaser after a period of 12 months and no interest can be charged on the same. Do you even remember reading this clause? Your own money will be used by the builder/developer and will be paid after a whole year while you deal with your lack of liquidity. Change this clause to set a more agreeable time limit, eg: within 7 days from the day of registration of cancellation deed.
5) How much of the amount paid by you to the builders will you get back? Have you read carefully what manner of deductions are stated in your agreement. Are they clearly mentioned or there is some ambiguity involved therein? The last thing you need is the news that a large chunk of your amount has vanished and that you had agreed to that while signing the agreement. Read this clause carefully and question every ambiguity, ask your builder/developer to state the amount to be deducted out of the amount you have already paid. If that is not possible, ask him to state clearly percentage that would be deducted.
Purchasers should ideally have the sale agreement verified by a lawyer, more often than not they don’t. Either to save a few bucks or out of sheer laziness, they avoid to approach a lawyer and end up paying lakhs for their mistake. Is buying a property with your hard earned money a frivolous thing? Get your agreement/s checked from professionals and listen to their advice. Don’t take regretful decisions. Keep calm and lawyer up.
This article is brought to you by estampdutyrefund.com
