Balu (Accountand) 01 May 2013

Agreement of sale vs sale deed

I got a prospective buyer for my Flat in Chennai who states that he wants to buy the flat at market value (Rs 50,00,000) but register at Guideline value for only (Rs 35,00,000). Since he is opting for a loan wants me to get into a agreement for sale for the value of 35,00,000, He is suggesting that he will give the balance in black.

My fears are

1) As I m signing only for 35 Lacs, during registration as per the law I would only be bound to get 35 Lacs.

2) Even if he pays me 50 Lacs, after registration if he comes back and asks for giving him back the 15 Lacs, I would be binded.

Can anyone pls suggest how usually such transactions take place, am okay to get everything in white, but he insists on this deal as he claims that higher registration would inflate the guideline value in the vicinity and impact everyone.

thanks

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1 Replies

S R SHETTY (MANAGER - LEGAL) 29 October 2014

Normally while buying property giving black money (called cash component) is open secret but not quoted as it is illegal. While buying property entire cash component is taken first along with token amount. Then go for loan amont. Without giving full agreed value (excluding loan), no possession is given. For cash components, sometimes a receipt (kuccha) is issued but kept with third party like agent if required and is destroyed later after possession is given. Buyer cannot ask back as is given in cash and there may be 1-2 witnesses for the same.