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Penalty charges in case the seller backs out from a sale agreement

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Penalty charges in case the seller backs out from a sale agreement

Last updated: November 29 2018
21 | Posts
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  • #11

    #11

    Re : Penalty charges in case the seller backs out from a sale agreement

    Originally posted by MANOJa View Post
    Originally posted by shankar.env View Post
    Thanks for the quick reply Manoj. How would we go with reasonable damages based on percentage w.r.t. advance amount?

    Also please refer the below link

    https://economictimes.indiatimes.com...w/16951468.cms

    As per the supreme court order if seller fails to perform the contract.
    I know about the quoted article, but it would still be best to settle this mutually, since involving a Lawyer itself is a huge cost . Also, in Court, proving that reasonable damages amount to double the advance amount exchanged, may be an issue .
    OK Manoj. Thanks for your valuable comments.

    I have started another discussion earlier today about the same property. Can you please suggest on that discussion.

    Thank you.

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    • #12

      #12

      Re : Penalty charges in case the seller backs out from a sale agreement

      Originally posted by shankar.env View Post
      OK Manoj. Thanks for your valuable comments.

      I have started another discussion earlier today about the same property. Can you please suggest on that discussion.

      Thank you.
      The new thread started by you stands merged in this thread, since both had similar topics . We prefer not to have parallel threads running on the same topic as this dilutes the information shared .
      Please read IREF rules | FAQ's

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      • #13

        #13

        Re : Penalty charges in case the seller backs out from a sale agreement

        Originally posted by MANOJa View Post

        The new thread started by you stands merged in this thread, since both had similar topics . We prefer not to have parallel threads running on the same topic as this dilutes the information shared .
        That was the thread I posted first where I have mentioned many issues about the property & the seller. Can you please help me, whether to complete the registration or to back up.

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        • #14

          #14

          Re : Penalty charges in case the seller backs out from a sale agreement

          Completing the registration process or to backing out is a decision which needs to be taken by you, since this involves a lot of varied factors, both personal & financial and i am unaware on most of them for u as an individual .
          Please read IREF rules | FAQ's

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          • #15

            #15

            Re : Penalty charges in case the seller backs out from a sale agreement

            Originally posted by MANOJa View Post
            Completing the registration process or to backing out is a decision which needs to be taken by you, since this involves a lot of varied factors, both personal & financial and i am unaware on most of them for u as an individual .
            Yesterday I met the seller, She wants to back up. I don't know how much to add as penalty, since I made advance in January 2018 with 3 part payment which ended upto 20% of the property value which is very huge amount.

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            • #16

              #16

              Re : Penalty charges in case the seller backs out from a sale agreement

              A fair way of calculating would be to add the bank interest for the time for which the money was with the seller . Then if u feel that u have lost an opportunity ( & if the market prices have gone up ), calculate the cost of opportunity lost and add that. Since the cost of most properties has been stagnant or has gone down in the last 1 year or so, opportunity lost cost might be zero or negligible.

              If the above is true, then on the interest amount calculated by you, add another sum of say 10 % of the total money u had paid to the seller, as an penalty for the seller in backing out . Also, if relevant & if u wish, u can add cost of lawyer engaged, cost of stamp papers etc..

              Above r just some thoughts of mine and there are no hard & fast rules, as things have not been clearly defined in your agreement .
              Please read IREF rules | FAQ's

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              • #17

                #17

                Re : Penalty charges in case the seller backs out from a sale agreement

                Originally posted by MANOJa View Post
                A fair way of calculating would be to add the bank interest for the time for which the money was with the seller . Then if u feel that u have lost an opportunity ( & if the market prices have gone up ), calculate the cost of opportunity lost and add that. Since the cost of most properties has been stagnant or has gone down in the last 1 year or so, opportunity lost cost might be zero or negligible.

                If the above is true, then on the interest amount calculated by you, add another sum of say 10 % of the total money u had paid to the seller, as an penalty for the seller in backing out . Also, if relevant & if u wish, u can add cost of lawyer engaged, cost of stamp papers etc..

                Above r just some thoughts of mine and there are no hard & fast rules, as things have not been clearly defined in your agreement .
                Thank you for your valuable comments.

                Comment

                • #18

                  #18

                  Re : Penalty charges in case the seller backs out from a sale agreement

                  Originally posted by shankar.env View Post
                  Thank you for your valuable comments.
                  You are welcome.
                  Please read IREF rules | FAQ's

                  Comment

                  • #19

                    #19

                    Re : Penalty charges in case the seller backs out from a sale agreement

                    Originally posted by MANOJa View Post
                    Originally posted by shankar.env View Post
                    Thank you for your valuable comments.
                    You are welcome.
                    Last but not least. Do you have any template for cancellation of agreement with terms & conditions to get the advance back within the prescribed time, so that i can start searching for another commercial property.

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