A property agreement is a legally binding document that ensures both parties are protected in a real estate transaction. Missing key clauses could lead to costly disputes or legal complications. To make your property deal hassle-free, ensure these critical clauses are included:
1. Property Details
Start with the complete details of the property to eliminate confusion:
• Full address, area (in sq. ft.), and type (builder floor, flat, land, etc.).
• Location specifications like nearby landmarks or unique features.
This ensures clarity about the property being sold or purchased.
2. Buyer and Seller Information
Clearly identify both parties involved in the transaction:
• Names, contact information, and full addresses.
• Identity proof, such as PAN, Aadhaar, or passport.
This builds transparency and legal accountability.
3. Sale Price and Payment Terms
Define the financial aspects upfront to avoid misunderstandings:
• Total sale price of the property.
• Payment schedule, including advance payments, milestones, and final settlement.
• Accepted payment modes (cheques, bank transfers, etc.).
4. Possession Date
State when the buyer will receive ownership of the property:
• Mention a specific possession date.
• Account for potential delays with clear provisions.
5. Penalty Clause for Delays
Protect the buyer’s interest by specifying penalties if:
• The seller fails to hand over possession on time.
• The seller defaults on the agreement.
This motivates timely compliance.
6. Legal Approvals and Compliance
Confirm the property meets all legal requirements to avoid future complications:
• RERA registration (if applicable).
• Completion and occupancy certificates.
• Environmental and municipal clearances.
7. Property Ownership History
Add a clause confirming the seller has a clear title:
• Include past ownership details, if applicable.
• Ensure the property is free from disputes or encumbrances.
8. Refund Clause
Address refunds in case of delays or agreement termination:
• Mention terms for full or partial refunds.
• Define the process for resolving refund-related disputes.
9. Defect Liability Period
For under-construction properties, include a timeline for addressing construction defects:
• Cover structural issues, plumbing, or electrical defects.
• Mention the specific duration (e.g., 1 or 2 years).
10. Dispute Resolution Clause
Clearly define how disputes will be resolved:
• Opt for arbitration or mediation for quicker resolutions.
• Specify the jurisdiction for legal disputes.
11. Handover Process
Set conditions for handing over the property to the buyer:
• Ensure all promised amenities are completed.
• Confirm the seller clears all pending dues (e.g., utility bills, taxes).
12. Signatures and Witnesses
Finalize the agreement by including:
• Signatures of both parties with dates.
• Two neutral witnesses to validate the document.
Why These Clauses Are Non-Negotiable
These clauses ensure transparency, reduce the likelihood of disputes, and protect the interests of both buyers and sellers. Without them, you risk financial losses, delays, or legal complications.
Conclusion
A well-drafted property agreement is the cornerstone of any real estate transaction. By including these essential clauses, you safeguard your rights and ensure a smooth process.
Pro Tip: Always consult a legal expert to review your agreement before signing it. A small investment today can save you from major headaches tomorrow.
