An agreement to sell is a vital document that comes before the execution of the sale deed. It has legal validity, while clearly mentioning the intention of the property seller to sell the same and the intention of the buyer to buy the same.
The transaction is concluded based on the pre-fixed terms and conditions of the parties. The sale process commences with buyers researching and short-listing properties and the sellers agreeing to sell the same. Once the parties decide to enter the transaction, they establish the terms and conditions of the same. Upon the conclusion of the discussions, the agreement to sell or sale agreement is executed.
Some key points that you should know
• The agreement states that the seller agrees to transfer his/her property to the buyer, subject to specific covenants and conditions in the near future.
• It is not the final sale, but the intention (written) to carry out the transaction later on.
• The contract talks about the terms under which the property title will be legally transferred.
• The guiding law here is the Transfer of Property Act, 1882. Section 54 also defines the agreement to sell as A contract for the sale of immovable property stating that the sale of the concerned property will take place as per the terms mutually agreed upon by both parties.
• There is also the legal clarification by this Act that an agreement to sell does not establish the charge/interest on the property.
• If the seller (signatory) does not go ahead with the procedure, the buyer may seek clarification based on the Specific Relief Act (1963) provisions. The seller may also seek the same from the buyer regarding the contract.
• To be legally valid, the agreement should be registered in the office of the sub-registrar of assurances. Buyers have to pay stamp duty for this purpose.
• The contract usually mentions a 2-3-month window for the buyer to gather the funds to buy the property.
Hence, the agreement to sell is an important legal document that comes just before the sale deed. You should know about these core points in order to take an informed decision while executing the same
