Agreement of sale
1. Ensure that names in agreement of sale match exactly as the registration (sale deed). If there is any mistake in the name, the agreement of sale will not be legal. no spelling mistake or name change should be there in the agreement of sale.
2. Two Witness: Any agreement of sale should be signed by not just the buyer and seller but 2 witness. This is legally necessary for the agreement of sale to be valid.
3. Revise rental agreement to reflect the sale: If the property is with a tenant, make sure that you have a condition on the agreement of sale to have a freshly drafted rental agreement to reflect the new ownership. Otherwise, the previous rental agreement would not be valid while you will have the registration and ownership of the property. It will be a problem to have a tenet who has agreement with previous owner while no agreement with the new owner.
4. Put in writing for any shortcoming of the property: This is mostly applicable to the land purchases. Ensure that any short comings in the property is noted in the agreement of sale. Example of those can be, mutation pending in revenue, zoning of a land. Even for Apartment or houses, if there is a loan on the house, it should be noted that there is a lien on the property. In such cases, original sale deed will be with the bank which seller must get for registration.
5. Bank loan condition should be only if the property has any issue rather than buyer's ability to pay: Lot of times, buyer will take a loan to buy the property. In such cases, there is a chance that the loan application is rejected. In such cases, the entire transaction can be at risk. To avoid this, better thing is to say, this transaction is only canceled if loan is rejected due to a shortcoming in property (like property valuation not good enough or property is not approved by the bank etc). However if the loan is not approved due to borrowers' ability to repay, then the agreement of sale is still valid.
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