Skip to main content

Home Seller Risks and Responsibility

 

Home Seller Risks and responsibility

In a sale process, two primary parties are involved: Seller and Buyer. Both these parties have certain rights and responsibilities in order to complete the transaction successfully. The agreement to sell and sale deed is executed on the doctrine of 'Good Faith'. Let's take a look at the key responsibilities and risks of buyers and sellers:

 

Home Sellers Responsibilities

  • Duty of disclosure: The seller is bound to disclose to the buyer any material defect (in the property or in the seller's title thereto), of which the seller is aware and the buyer is not; and which the buyer could not, with ordinary care, discover. There is no duty to disclose such defects of which buyer has actual or constructive notice, but a mistake with respect to a fact material to the property will make the agreement void. Material defect must be such that if the buyer knew it, his decision to purchase the property would have been fundamentally affected. Such defects may also hamper the enjoyment of the property.
  • Responsibility towards buyer's queries: If the buyer raises reasonable questions with respect to the property with or without inspection of the property documents, the seller is bound to answer the same to the best of his knowledge and belief.
  • Agreement to sell: The seller needs to enter into an 'Agreement to Sell' with the buyer when selling a property. The purpose of the 'Agreement to Sell' is to provide a record of the terms agreed upon by both the contracting parties (buyer and seller) for the sale/purchase of a property and to create the right for the buyer to obtain a sale deed for the property purchased. The 'Agreement to Sell' is NOT a document through which the transfer of the title will be carried out. It is a document that precedes a sale deed and thus, does not require to be registered.
  • Looking after property before conveyance: Even after the 'Agreement to Sell' has been entered into with the buyer, the seller is still responsible to take care of the property and cannot be negligent towards the property until the sale deed is executed.
  • Execution of conveyance / sale deed: The sale deed has to be executed by both the seller and the buyer in the presence of separate witness for both parties. Sale deed of immovable property is required to be registered within the time stipulated under the law in the designated office of the Registrar. The registration of sale deed provides clear right to subsequent sale. Therefore upon receiving the total payment from the buyer, the seller must execute proper conveyance of the property and facilitate registration at the stipulated time and place.
  • Possession of the property: Once the formalities from the side of the buyer are completed, it is the duty of the seller to give the buyer possession of the property, notwithstanding a condition in the sale deed that if no possession is given, the buyer may get it himself. Possession has to be given when the property passes to the buyer, which would generally be at the time of the execution of the sale deed; though it may vary depending on terms of the sale deed.
    Normally it is understood that the seller can retain possession till the buyer pays the money. However it has been held that the transferor is not entitled to retain possession even where the purchase money has not been paid fully. If a seller takes a plea that the remaining money has not been paid, the purchaser must show that he is willing to pay the rest of the consideration. The court can ask for proof of this intention on part of the purchaser. 
    If the property is in the possession of the seller, he should vacate it and hand over the vacant possession to the buyer. If the property is in occupation of any other person, then, as far as possible, the seller must get it vacated and give vacant possession to the buyer - more so in case of agriculture land or even where the land is in occupation of a trespasser, unless the buyer has purchased the property with existing encumbrance.
  • Payment of public charges: The seller is bound to pay all public charges (i.e., financial or other liabilities such as tax liabilities to the statutory authorities, government revenue and municipal taxes) and rent accrued and due in respect of the property up to the date of the sale or up to the date of possession, if the parties so agree. The seller is also under obligation to discharge all existing encumbrances on the property or to pay the interest on all such encumbrances due up to the date o sale, except where the property is sold subject to the encumbrances.
  • Delivery of property free from encumbrances: Conveyance of a clear and a good title and delivery of property free from encumbrances is the duty of the seller.

Besides responsibilities, there are various risks associated with a property deal � both for the buyer and the seller. It is advisable to analyze the risks involved before you buy or sell property.

 

Home Sellers Risks

  • Inappropriate valuation of the property: It is quite possible for the seller to wrongly assess the value of his/her property. This value is mainly arrived at by using various sources such as comments from friends, overall property market trends and information from the marketplace. The seller generally wishes to receive the maximum amount through the sale of his/her property, which could become obstacle in achieving a possible sale. The seller should bear in mind that an average buyer is only interested in paying what he/she considers to be reasonable price. Thus, the seller should demand property price according to the market trends.
  • Selling through too many real estate agents: It is advisable to select few agents as the buyers tend to think negatively about a property that is being handled by multiple agents. The seller should consider the agents based on their specialization and market reputation. Further, notify the same property price to all agents to avoid possible manipulation by prospective buyers.
  • Tough access to property: There is also risk of losing potential buyer due to the difficulties posed in the access to the property. A seller should arrange for access to the property to be made as easy as possible.
  • Dubious buyers: There is risk involved in selling the property to a buyer with dubious credentials. It is, therefore, necessary to verify the background and standing of the buyer before getting into a transaction.
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saving Mutual Funds to invest in India for 2016 or Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

Popular posts from this blog

Mutual Fund Review: Religare Tax Plan

Tax Plan is one of the better performing schemes from Religare Asset Management. Existing investors can redeem their investment after three years. But given the scheme's performance, they can continue to stay invested   Given the mandated lock-in period of three years, tax saving schemes give the fund manager the leeway to invest in ideas that may take time to nurture. Religare Tax Plan's investment ideas revolve around 'High Growth', which the fund manager has aimed to achieve by digging out promising stories/businesses in the mid-cap segment. Within the space, consumer staples has been the centre of attention for the last couple of years and can be seen as one of the key reasons for the scheme's outperformance as compared to the broader market. It has, however, tweaked its focus and reduced exposure in midcaps as they were commanding a high premium. The strategy seems to have worked as it returned a 22% gain last year. Religare Tax Plan has outperformed BSE 100...

Good time to invest in Infrastructure Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Good time to invest in infrastructure The Sensex has gained almost 10 per cent from May 15 till date, while the CNX Infrastructure Index has gained almost 17 per cent in the period. The price to earnings ( P/ E) ratio of the BSE Sensex is 18.96; for the CNX Infrastructure Index, it is 24.57. The estimated P/ E for next year is 14.04 for the Sensex. Of the 24 companies that make up the CNX Infrastructure Index, six have a P/ E higher than 20. Does this mean infrastructure is fairly valued? Or, has it run up quite a bit? According to experts, barring stray companies, the infra sector is fairly valued and it is a good time to invest. Even if some companies are facing debt restructuring problems, once interest rates come down and regulatory norms become flexible, they will start giving good re...

Mutual Funds: Past Performance is not just everything

Many a times your agent / distributor / relationship manager tries to push you some mutual fund schemes by enticing you with a typical sales pitch…"Sir, this scheme has generated 20% returns in the past one year." And this sales pitch often gets louder when the market conditions have been favourable. Some of the agents / distributors / relationship managers have another unique way of luring you. They say, "Sir / madam this scheme has been awarded the best scheme award in the past by a leading business channel"... And hearing all these sales talks you investors very often get attracted and sign a cheque in favour of the respective scheme.   But please ask yourself do you hear these sales talks when the capital markets turn turbulent? Why is it so that your agent / distributor / relationship manager avoids talking to you during turbulent times of the capital markets and doesn't boast about returns generated by the respective funds or awards being conferred on t...

What are Tax savings Bank Fixed Deposits?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   These are a special type of bank fixed deposits, of five-year tenure, which allow you to have tax benefits for investments of up to Rs 1 lakh per person per financial year. Investments in these FDs give tax benefits under 80C of the Income Tax act. These are not very liquid investments because the money is locked-in for five years. One also has the option to continue the FD for another five years after the lock-in ends. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax ...

TDS Rate and Personal Account Number(PAN)

    The TDS rate doubles to 20% from 10% if you fail to mention your Personal Account Number   IF you run a glance through your pay slip, you will come across something called TDS, which is tax deduction at source. In most cases, the employer deducts this amount at the time of payment of salary itself and pays the total tax amount to the government on behalf of all the employees. If you are a self- employed or practicing professional s, you have to pay this amount yourself.    Tax deducted at source is one of the modes of income tax collection by the government. Under the income-tax laws, income tax at specified rates is required to be deducted while making certain payments.    The rate of deduction of tax at source on interest and rent payment is 10%. For salary payments, the employers deduct income tax at source on a monthly basis after computing income tax liability on estimated annual taxable income of the employee. Tax benefits on housing loan, investments, etc are consid...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now