A sale agreement is a contract between the buyer and seller of a property. Like any other agreement, this deal too can go awry. For this reason, it is essential for both the buyer and the seller to give due consideration while making or accepting offers. You must know your rights if the other party does not comply with the agreement.
From the seller’s perspective
When this happens, there are several scenarios in which you can act. Before deciding what can be done, it is essential to look back at the sale agreement and see if it is included in its clauses. Here are a few things to check:
- What was the provision in the contract concerning the failure on the part of the buyer to make payment?
- Is there a clause stating that the balance money will be paid only after the buyer is satisfied with the property title?
- Is there a clause stating that you can issue a legal notice to the buyer for cancellation of the agreement and claim damages?
- Is there a clause stating that buyer can renege on the agreement if he fails to get a home loan?
Moreover remember that if it is a registered agreement, a deed of cancellation must be executed by both parties. Only then the property can be sold to the third party.
However, if the buyer refuses to agree for cancellation of a registered contract, you can file a lawsuit for specific performance to make the balance payment.
From the buyer’s perspective
The same set of rules apply to a buyer as well. A buyer must also refer to the sale agreement and search for the appropriate clauses.
- What is the provision in the contract regarding seller backtracking from the deal?
- Is there any clause stating that the seller can cancel the deal if certain conditions are not met from his side?
- Can you issue a legal notice to seller for terminating the agreement and seek damages?
In short, the buyer or the seller may claim breach-of-contract for financial loss if the other party does not complete the sale. If a seller defaults, he must reimburse the buyer all deposits plus reasonable expenses. The other party may also try to compel the erring party to complete the deal under certain performance. From the buyer’s point of view, it is advisable to register the sale agreement.
The specific performance
In terms of real estate, specific performance means that when either buyer or seller wishes to complete sale under agreed terms in the sale agreement. A buyer or seller wishing to compel the recalcitrant party to honour the agreement under already agreed-upon terms can file an injunction by requesting a court order to complete the sale. Though, the court has the sole discretion to order a sale of property through specific performance.