Advice reg sale of property
Chandrika Subramaniyan
(Querist) 15 March 2011
This query is : Resolved
Chennai
I had proposed to sell my flat in Chennai about 6 months ago and communicated this with the Tenant who is living there. Tenant was ready to buy the property and a price was agreed upon. After submitting copy of all relevant papers to the tenant through a lawyer, Tenant has been postponing the sale for now almost 3 months from the recipt of all proper documents (copy )of the property. Tenant is given time limit till 15 mar 2011 to conclude sale.
I am in a dilemma as to how to proceed further. I would be grateful for advice
I do not want to chase the tenant for ever for verbal notice in amicable conversation etc of 6 month had been given. Perhaps I should give a notice to vacate in writing citing property required for own use, and then perhaps if Tenant is able to conclude sale within the period then both tenant and I stand to benefit. But if not then I suppose we have to proceed legally which is detrimental to my convenience although I may not be left with any other choice.
Perhaps finding another party who is willing to buy the property with the Tenant (Guess unlikely ) may be an option but then that may put me in a disadvantage to negotiate on price.
I really would be grateful for your expert opinion and guideline based on practicality.
Thanking you
Sincerely
Chandrika Subramaniyan
Devajyoti Barman
(Expert) 15 March 2011
The two options you are already mulling around are both good and practical. You can select either of the two which first comes to your platter.
R.Ramachandran
(Expert) 15 March 2011
You will not be in a position to get the property vacated by claiming that the property is required for own use, this especially in view of the fact that you have already given in writing through a lawyer all the documents with an intention to sell the property! If you issue a legal notice he will rebut your claim based on your own documents and writings.
Yes, the second option is preferable, even if that would mean lesser sale proceed than in the normal course.
Chandrika Subramaniyan
(Querist) 15 March 2011
Thank You Mr. Ramachandran. I really appreciate your response. However till date no documents have been signed by either of us. All conversation has been through a lawyer and directly between tenant and I. As he kept postponing the sale I did not want to sign anything until he produces copy of DD in my name to the agreed price. As such do you think my inital question is a valid one ?
One more thing.....
The tenant is choosing to buy Power of Attorney for the property from me.
He will settle the full price amount with an Indemnity/affidavit when the power of attorney is given/signed. The indemnity/affidavit is so that it will protect me from all actions that he is proposing to undertake in future in regards to the property and through the power of attorney.
I understand he is proposing sell /transffer the property in the name of his 3 children (1 Adult and 2 Minors ) .
A sale agreement that will mention all above except the sale to children will be raised at a Post dated stamp paper mentioning the full price amount.(IS this really required ...I mean the sale agreement to sell power of attorney ?
I also understand that he will probably show a lesser value in sale deed to his children to avoid high tax etc.
Is this legally advisable or ok to take this route ?
R.Ramachandran
(Expert) 15 March 2011
When you are ready to execute the Sale Deed yourself, I do not understand the logic in seeking a power of Attorney from you in the buyer's favour. Even if you give any such power of attorney, please do not forget (i) to first enter into a agreement to sell with the prospective buyer (i.e. your tenant) for the full consideration and to execute the Sale Deed either in the name of the buyer (your tenant) or any of his nominees (this can be either his sons or anybody else)it will not affect you in any way so long as such persons are nominated by him; (ii) to mention in the Power of Attorney that you have entered into an 'Agreement to Sell' with so and so .... and the current Power of Attorney which you are executing in favour of the buyer is to enable him to execute the Sale Deed in furtherance of the Agreement to Sell in question. By this method, he will be in a position to use the Power of Attorney only for the purpose of executing the Sale Deed in pursuance of the Agreement to Sell and nothing else. The indemnity/affidavit that he will be executing in your favour would have no value. In any case, you have to litigate separately to enforce the indemnity in case he does any hanky panky.
Chandrika Subramaniyan
(Querist) 15 March 2011
Mr Ramachandran...Thank you once again.
The Power of attorney route to execute sale deed is the buyer's choice. The Power of Attorney would be given to the Tenant for the full agreed price.
The reason he probably is opting for this is because in sale deed that he will register in the name of his children , he is planning to sell it for lesser value of the property to register etc so that he can avoid paying higher fees and taxes.
I enclose the draft copy of the Power of attorney and the indemnity. The price shown in the power of attorney is to be read as 52 L..Grateful for your observations.
Sincerely
Chandrika Subramaniyan
Uma parameswaran
(Expert) 15 March 2011
The absence of written documents help you to move with first option.Before execution of POA Check about the tax benefit.
Chandrika Subramaniyan
(Querist) 16 March 2011
Thank You Uma Parameswaran for your response. As the whole transaction would be in white...I am quite aware and am prepared to show and invest/pay tax accordingly. However will check with my CA in regards to the same. Thank you
R.Ramachandran
(Expert) 16 March 2011
The Agreement to Sell has come out somewhat nicely. However, the power of attorney proposed by you (or insisted by the buyer) is faulty, especially in the face of Agreement to Sell. At best, the POA can say that you have already entered into an Agreement to Sell vide Agreement dated ..... to sell the property to xyz or his nominee, and this POA is appointed to do all acts and deeds necessary to execute the sale deed in pursuance of the Agreement to Sell. NOTHING LESS NOTHING MORE.
The Affidavit proposed by the buyer binding himself to be responsible for any tax dues etc., or absolving you of any tax liability due to his activities etc., are NOTHING BEFORE EYE OF LAW. So long as the property belongs to you, anything that your agent (POA) does would be treated as done by you and you and you alone will be held responsible an accountable.
REST is left to you to ponder and decide.
