LAW MADE EASY!
HOW TO DRAFT A SALE AGREEMENT?
A Sale Agreement is a very common deed that one executes in transactions pertaining to immovable properties. In this article, let us see, the major ingredients of a normal sale agreement.
a) A sale agreement should contain the name, father's name, age and address of the seller and purchaser.
b) It shall also contain the date of the agreement as well as the place where the agreement is executed.
c) A brief description of the property which is the subject matter of the sale shall be given in the body of the agreement and the detailed description of the same shall be given in a separate schedule which is at the last portion of the sale agreement. As a normal convention, the property which is the subject matter of a sale agreement is referred in the agreement as schedule property.
d) The sale agreement shall contain a clause, to the effect that the seller has offered the property for sale, to the purchaser and the purchaser has agreed to purchase the property from the seller.
e) There shall be a mention ofthe total sale consideration amount, as well as the amount which is paid at the time of entering into the agreement.
f) The period of the agreement shall be clearly spelt out in the agreement. It is the duty of the purchaser to pay the balance sale amount before the date of registration and get the property registered in his name.
g) The purchaser will have a right to appoint a nominee on his behalf for the purpose of registering the property.
h) It is ideal to give a brief description of the history of the property.
i) Normally, a penalty clause is provided in the sale agreement with an intention to derive commitment and seriousness from the parties to the agreement.
j) If there is any outstanding loan over the schedule property, the details of the same shall be mentioned in the sale agreement and the manner in which the seller shall clear the said loan has to be mentioned in the sale agreement.
k) If there are any other documents to be procured by the seller or any things to be done from the side of the seller before the date of registration, then the same shall find a place in the agreement.
l) Normally, all the expenses towards the drafting of the sale agreement, sale deed, stamp duty, registration charges etc shall be borne by the purchaser.
m) The possession of the property shall be handed over to the purchaser on the day of the registration. If the possession is handed over at the time of sale agreement, then the stamp duty on the sale agreement will considerably vary.
n) The original documents are normally handed over by the seller to the purchaser at the time of registration.
o) The sale agreement shall be signed by both the seller and purchaser and the same shall be witnessed by two witnesses.
p) Only advocates and registered deed writers are authorized to draft a sale agreement.
There is a trend world over, in particular among companies and corporate not to drag disputes into long drawn courtroom battles. There comes the significance of Arbitration, Mediation, Conciliation and such alternate disputes resolution mechanisms. Here is the added advantage of savings in time as well as the cost of proceedings. Moreover the parties settle the matter in a win- win spirit.
The Arbitration and Conciliation Act, 1996 governs the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards in India. Further it governs the law relating to conciliation. This act has taken into account the UNCITRAL Model Law on International Commercial Arbitration adopted by UN in 1985 and the UNCITRAL Conciliatory Rules (1980).
As per the Arbitration and Conciliation Act, 1996, an arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or it may be a separate agreement. Further an arbitration agreement shall be in writing.
If either of the disputing parties approaches a Court for adjudication of the dispute, in spite of the presence of an arbitration agreement, then the Court has the power to refer the parties to arbitration. The parties to an arbitration proceeding are entitled to approach the jurisdictional court for urgent and interim measures of protection.
The parties are free to determine the number of arbitrators; however the same shall not be an even number. The arbitrator may be a person of any nationality. If there is any justifiable doubt as to the independence or impartiality of an arbitrator, then, he shall not become an arbitrator.
The arbitrational tribunal is also entitled to pass interim measures of protection or to order a party to provide appropriate security. In arbitration proceeding, the parties shall be treated with equality and each party shall be given full opportunity to present his case.
Parties are free to fix the place of arbitration. If there is a disagreement between the parties regarding the place of arbitration, the same shall be decided by the arbitrational tribunal. The proceedings can be conducted in any language as determined by the parties.
Reverse Mortgage for Senior Citizens
With the average life span of Indians on the rise and the mortality rate coming down drastically along with the advancement of modern medicine, the number of senior citizens in the population is on rise. Coupled with this, the disintegration of social fabric, the disappearance of joint family system and the fast pace of modern life, have left many senior citizens economically and socially vulnerable during the fag end of their lives.
With the idea to provide some social security measure to senior citizens, the Finance Minister formally introduced the concept of Reverse Mortgage in India in the last Union Budget. National Housing Bank has issued certain guidelines in this regard. Many banks like State Bank of India have already introduced this concept.
As per the scheme, the senior citizens who own a house can mortgage their property to a banker. The banker will make periodic payments (say monthly) to the borrower, during his life time. The borrower need not repay the loan amount during his life time. After the borrower's death, the house property is sold and the loan amount together with the interest
accumulated is recovered by the bank. If the heirs of the borrower can repay the loan together with interest thereon, then they can release the mortgage and inherit the house property.
The scheme is available for senior citizens who are above 60 years of age. Married couples can jointly borrow under this scheme. The borrower shall use the property mortgaged as permanent primary residence. The amount of loan that the senior citizens can avail depends on factors like market value of the property, age of the borrower, rate of interest etc.
The loan amount may be periodic (monthly, ½ yearly) or it can be one lump-sum payment. Normally periodic payments are made for monthly maintenance of senior citizens, while lump-sum payments are made for special purposes like medical expenses, home improvement etc. The maximum period of loan is 15 years. Commercial properties are not eligible under this scheme.
The senior citizens are also given a "right of rescission", ie, they can cancel the scheme availed within 3 business days of finalizing the scheme. In such cases, the entire loan amount will have to be paid by the senior citizens within this 3 days period.
The loan amount will became due and payable when the last surviving borrower dies or intends to sell the home or when the borrower permanently moves out of the home. The borrower has the right to prepay the loan at any time during the loan tenor, which shall not carry any penalty or charge.
JOINT DVPT OF PROPERTIES
Joint development of property is a type of development venture wherein one person who has land, ties up with another person who has money to invest, to promote a project. Normally the land owner provides the land for development and has a passive role. The execution of the project and the investment is normally taken care of by the builder.
A Joint Development Agreement is signed between the parties to develop the project. The Joint Development Agreement should have the following essential features.
a) Description of the parties to the agreement
b) Description of the property which is being developed. Separate description of land and the building to be erected must be found.
c) The time period for completion.
d) The security deposit usually given by the builder to the landowner. This may be refundable or non refundable after the term of the agreement.
e) The ratio in which the land and building is to be shared between the owner and the builder. This is very important as there are chances that towards the completion of the project disputes creep up between the landowner and the developer.
f) Normally, possession of the land is given to the builder to effect the development work. The land owner shall not object for the workers, engineers, etc of the builder entering the land and undertaking the construction work.
g) The landowner shall give the necessary permission to the builder to interact on his behalf with various Governmental and non-Governmental authorities so as to obtain the necessary permission, licenses etc. Normally a registered GPA is simultaneously entered into at the time of entering into a Joint Development Agreement. The GPA is given by the landowner to the developer giving various powers to the developer to attain the various objectives of the Agreement.
h) Sometimes a separate sharing agreement is entered into between the landowner and the developer which clearly speaks about the shares of the respective parties after the completion of the project. However, instead of a separate agreement, sharing of the constructed portion can be made as a part of the Joint Development Agreement itself.
i) Both the landowner and the developer should have a clear idea about the approximate market value of the constructed portion and the land after the completion of the project. Moreover, the builder should also take into account the monitory investment made by him as well as the quantum of efforts, put in by him in developing the project. Both the parties should also get a reasonable profit by selling their respective shares at the end of the project. These factors should be kept in mind by the landowner and the developer at the time of deciding their shares in the completed projects.
j) It is ideal to include an arbitration clause to settle the disputes between the parties that may crop up during the period as well as after the completion of the project. Success of a Joint Development Agreement ultimately lies in the careful drafting of a Joint Development Agreement which prevents disputes and ill will between the parties.
WHO IS A NON RESIDENT INDIAN?
A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case expect where during that year, the control and management of its affairs is situated wholly outside India.
A company is said to be a resident in India in any previous year if-it is an Indian company or
during that year, the control and management of its affairs is situated wholly in India.
A person is said to be "not ordinarily resident" in India in any previous year
i) if such a person is an individual who has been a non resident in India in 9 out of 10 previous years preceding that year or
ii) An individual who has during the seven previous years been in India for a period of 729 days or less.
An individual, being a citizen of India or a person of Indian origin who is not a resident is a non-resident Indian. We have seen the definition of resident earlier.
A person is deemed to be of Indian Origin (PIO) if he or either of his parents or any of his grand parents was born in undivided India.
Every criminal case registered in a police station, will be treated as a state case and in the ordinary course, it will be the government which will take up the case on behalf of the complainant. The public prosecutors conduct such criminal cases in the courts on behalf of the Government and the Complainant.
For every high court there will be a Public prosecutor as well as Additional Public Prosecutors who will be appointed by the Central Government as well as the state Government to conduct their cases. For every district, the state Government shall appoint a Public prosecutor as well as Additional public prosecutors. Only an advocate with a practice of a minimum of seven years can be appointed as a Public prosecutor.
In sensational criminal cases, the State Government may appoint an advocate as a Special public Prosecutor. The said person shall have a minimum practice of 10 years as an advocate.
The State Government shall appoint in every district, one or more Assistant Public Prosecutors for conducting prosecutions in the Courts of Magistrates.
HOW TO DRAFT A LEASE AGREEMENT?
Normally only advocates and licensed deed writers are permitted to draft deeds. However on many occasions general public draft common deeds relying on the models they have. A lease agreement or a rental agreement is a very common document used by the public. In many cases the real estate agents themselves take upon the role of a deed writer. However, let us see the essential requirements of a lease agreement.
The person who lets out a premise for lease is known as Lessor. The person who takes the premises for his use is known as the Lessee. The premise which is the subject matter of the lease is the Leased premise.
A lease agreement shall contain the time period of the lease. A lease agreement for a period of more than 1 year need to be registered in the state of Karnataka. Hence the usual practice is to go for a lease of 11 months and then renew the same for further periods. The lease agreement shall be properly stamped.
The lease agreement shall mention the rent reserved for the premises as well as the date of payment of the same. Similarly it shall contain the details of the security deposit paid. Normally the security deposit shall not bear any interest.
There should be a proper description of the premises leased. Further the responsibility of payments of electricity bills, water bills, telephone bills etc, is on the Lessee. However, it is the duty of the Lessor to pay the land and building taxes.
The mode of termination of the lease shall be clearly spelt out in the lease agreement. Similarly there should be a provision for the issuance of notices to each party.
The terms Lessor and Lessee shall be deemed to include their successors, executors, legal representatives and permitted assigns. In the schedule, the leased premises should be described properly including the municipal number, the area and floor of the leased premises.
It shall contain the mention of the nature of activity permitted in the premises. Further there should be a mention that the Lessee is not permitted to sub-let or sub-lease the premises.
Normally, there is one clause to the effect the Lessor will have the right to inspect the leased premises after giving sufficient notice to the Lessee. Few agreements provide for a 'Lock-in-period' where neither of the parties can terminate the agreement.
Usually, late payment of the rent attracts interest at 18% per annum. It is a duty cast upon the lessee to deduct TDS if applicable and to furnish TDS certificate to the Lessor in time.
In case of apartments and shopping complexes a separate maintenance charge is also demanded for the maintenance of the common areas. There should be an understanding as to whether this is included in the rent or not.
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