Mumbai: All you need to know about Sale Agreement!

Agreement for Sale is the central document governing the sale of property. It contains the agreed upon terms & conditions between seller and buyer for the sale of property and is legally binding on both the parties. The buyer is referred to as the purchaser and the developer is referred to as the promoters in the agreement. It also specifies the date by which the transaction will be completed.In simple terms, an agreement for sale is a road map how the property transaction will be completed. The Maharashtra Ownership Flats (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act, 1963(‘the MOFA’) has been enacted to regulate the promotion, construction, sale, management and transfer of flats sold on an ownership basis within the State of Maharashtra. The MOFA is an important piece of legislation as it lays down the responsibilities of real estate developers / builders in respect to flats sold by them and conversely the rights of flat purchasers within the State. Based on the analysis of an agreement of sale for a mid-level apartment in Mumbai, following is a brief account of the rights and duties of the purchaser as well as the promoters. Purchaser’s Rights Right to inspect legal documents relating to title The agreement states that the purchaser demanded from the promoters and the promoters have given inspection to the flat purchaser of all the documents of title relating to the said land, the exemption order passed by the Government and other authorities and plans, designs and specifications prepared by the promoters Architects and of such other documents as are specified under the Maharashtra Ownership Flats (Regulations and Promotions of Construction, Sale, Management and Transfer) Act, 1963. The purchaser has a right to inspect the copy of Property Register Cards and extract of Village Forms VI or VII-XII and all other revenue records showing the title of owners/promoters to the said land, on which the building containing the flat/shop agreed to be purchased by the FLAT purchaser from the promoters. He can also inspect the copy of marketable title certificates and revenue records furnished by the advocate. Right to claim refund If the promoters fail or neglect to permit the purchaser to occupy the said flat on account of reasons beyond their control and of their agents as per the provisions of section 8 of Maharashtra Ownership Flats Act, by the aforesaid date or the dates prescribed in section 8 of the said Act, then the promoters shall be liable on demand to refund to the purchaser the amounts already received by them in respect of the flat without any interest provided that by mutual consent it is agreed that dispute, whether stipulations specified in Section 8 have been satisfied or not will be referred to an Arbitrator to be appointed by the promoters. Till the entire amount is refunded by the promoters to the purchaser he shall, subject to prior encumbrances if any, have a charge, on only the particular flat/shop in dispute and not on the entire Buildings/Land and Property. Right to exclusive use of space It is also understood and agreed by and between the parties that the terrace space in front of or adjacent to the terrace flats in the said building if any, or other premises on ground or on other floor all the open spaces for different uses on the specific consent of the promoters to the purchaser shall belong exclusively to the respective purchaser and such space is intended for the exclusive use of the respective purchaser. The said space shall not be enclosed by the Flat purchaser till the permission in writing is obtained by the promoters as the case may be. Purchaser’s Duties Duty to pay timely installments According to the agreement any communication either orally or in writing by the promoters to and/or inspection of the property by the purchaser about the completion of a particular stage of construction is sufficient and within 7 days of such notice, the purchaser shall pay to the promoters the requisite installment of the Purchase Price. The installments payable by the purchaser shall be paid on the due date without any delay or default as time in respect of the installments payable by the purchaser under these presents is of the essence of the contract. If the purchaser makes delay or defaults in making payment of any of the amounts payable under this and interest as they deem fit or shall be entitled to terminate and/or put an end to this Agreement and the promoters shall refund the amounts paid by the purchaser without interest to the purchaser . On termination the purchaser shall have no right, title, interest, claim, demand or dispute of any nature whatsoever either against the promoters. They shall be entitled to deal with them and dispose off the said premises to any other person/s as they desire without any further or other consent of the purchaser. Duty to pay administration charges Upon termination of the the promoters shall be at liberty to charge administration charged to the flat purchaser and such charges shall be deducted from the amount of the Flat purchaser lying with the promoter and the promoter shall refund to the purchaser the net amount thus payable out of the installments of Sale Price of this Flat. The promoters shall not be liable to pay to the purchaser any interest on the amount refunded. Duty to pay local taxes and municipal charges Commencing a week after oral and/or written notice is given by the promoters to the purchaser that the flat is ready for use and occupation, the purchaser shall be liable to bear and pay the proportionate share (i.e. in proportion to the floor area of the flat) of outgoings in respect of the said land and building/s namely local taxes, non-agricultural assessment, betterment charges or such other charges levied by the concerned local authority and/or Government including Brihanmumbai Municipal Corporation. Other charges such as water charges, water through tankers charges, insurance, common lights, all types of repairs, and salaries of clerks, gardener, chowkidars, sweepers and all other expenses necessary and incidental to the Management and Maintenance of the said land building will be paid by the purchaser to the promoter. Duty to pay for installation of electric meters According to the agreement, electric meters of each flat required to be transferred in the names of individuals of such premises shall be done by the flat purchaser at his/her cost for which purpose the promoters shall merely sign the content letter. Duty to bear legal costs The flat purchaser shall pay all legal costs, charges and expenses including professional costs of the Attorney/ Advocates of the promoters in connection with formation of the said Society, or as the case may be, Limited Company, preparing its rules, regulations and bye-laws and also for the cost of preparing and engrossing this agreement or preparing and engrossing this agreement in duplicate and the conveyance Duty to bear increase in taxes and charges To bear and pay increase in local taxes, water charges, insurance, and such other levies, if any, also for improving infrastructure which is imposed by the concerned local authority and/or Government and/or other public authority, on account of change of user of the Flat by the Flat purchaser Viz. use for any purpose of local authority. Duty to follow rules of Society The flat purchaser shall observe and perform all the rules and regulations which the Society or the Limited Company may adopt from its inception and the additions, alterations or amendments thereof that may be made from time to time for protection and maintenance of the said building and the flats therein and for the observances and performance of the building rules, regulations and bye-laws for the same being of the concerned local authority and of Government and other Public bodies. The flat purchaser shall also observe and perform all the stipulations and conditions regarding the occupation and use of the flat in the building and shall pay and contribute regularly and punctually from the date of occupation certificate and or receiving the possession of the flat whichever is earlier towards the taxes, expenses or other outgoings in accordance with the terms of this Agreement. Duty to get agreement registered The Flat purchaser shall lodge this Agreement at the proper registration office for registration well in advance of the time limit prescribed by the Registration Act and the promoters and or their representative upon receiving the details thereof will attend such office and admit execution thereof. All stamp duty and registration charges, payable in respect of this transaction shall be paid by the Flat purchaser alone and the promoters shall not be liable or responsible for the same. Promoters Rights Right to open spaces and other areas The flat purchaser shall have no claim save and except respect of the flat hereby agreed to be sold to him and all open spaces, parking spaces, lobbies, staircases, terrace, recreation spaces etc. will remain the property of the promoters until the said land and building is transferred to the Society/Limited Company Right to enforce terms of agreement Any delay, tolerance or indulgence shown by the promoter in enforcing the terms of this Agreement or any forbearance or giving of time to the flat purchaser by the promoters shall not be construed as a waiver on Part of the promoters of any breach or non-compliance of any of the terms and conditions of this Agreement nor shall the same in any manner prejudice the rights of the promoters. Right to authority over unsold flats In the event of the Co-operative Society or Limited Company being registered before the sale and disposal by the promoters of all the flats/shops and premises in the said building the Power and authority of such Society or Limited Company so formed of the purchasers herein and other purchaser of the flats shall be subject to the overall powers of the promoters in the matters concerning buildings construction and completion thereof and all facilities pertaining to the same and in particular the promoters shall have absolute authority and control as regards the unsold flats/shops/open and closed garages and the disposal thereof, the Co-operative Housing Society formed of the purchasers shall not charge any transfer charge or donations to the promoters or the prospective buyers after the Society is formed and the promoters or prospective buyers shall not require any consent from the Society so formed. It is also agreed that the promoters shall not pay any type of outgoings to the formed Society in respect of unsold flats, shops, stilts and garages. It is also agreed that any flat/shop/stilt/garage or other constructed portion not specifically sold to the purchaser till or after the registration of the Society shall remain the unsold property of the promoters till such sale. It is also agreed that the promoters shall also transfer any flat/shop/garage/stilted portions to the new purchasers before the handing over of the maintenance of the building or the handing over Registration of Society whichever is later at their discretion. Right to construct in phases The promoters shall always have the right to construct the building in more than one phase and obtain the occupation certificate from BMC in respect of such completed portion of the building and the purchaser hereby consents to the same. The promoters shall also be at liberty to transfer the flat/shop/stilt/garage after the formation of the society. Right to construct extra storeys The promoters have informed the purchasers that the rules/regulations for TDR(Transfer of Development Rights) are framed and on its sanction the promoters shall increase the storeys of the proposed building by making substantial changes in the staircases, lifts etc., of the building and by creating a porch between proposed building and other various buildings proposed to be developed by the promoters on the adjoining plots by physically touching the proposed building and by amalgamating/DE amalgamating other properties of the promoters and their prospective concerns with the property described in the Schedule hereunder written. Promoter’s Duties Duty to follow local laws The promoters agree to observe, perform and comply with all terms, conditions, stipulations and restrictions, if any, which may have been imposed by the concerned local authority at the time of sanctioning the said plans or thereafter and shall before handing over possession of the Flat to the purchasers obtain from the concerned local authority occupation and/or Completion certificate in respect of the flat. Duty to follow permissible FSI The promoters declare that the residual FSI( floor space index) is one available for the construction of building. Duty to sell at agreed price The promoters have offered this flat to the purchaser at the rate determined by the prospective member of the proposed Co-op. Housing Society to be formed by the flat purchaser and the flat purchaser has requested upon amenities approved between the Parties hereto and therefore as per agreed terms between parties hereto the price of the flat is fixed as mentioned therein.

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