BUYING A PROPERTY?
THE PROPERTY HAS BEEN SELECTED/CHOSEN!!!!
NOW THE NEGOTIATION REGARDING THE PRICE BEGINS!!!!!!!
BOTH BUYER AND SELLER MUTUALLY AGREE FOR THE SALE PRICE & DURATION TO COMPLETE THE SALE TRANSACTION !!!!!!!!!!!!!!!!!!!!!!
THE NEXT STAGE IS SET!!!!!!!!!!!!!!
THE SELLERS NORMALLY DEMANDS EARNEST MONEY DEPOSIT/ADVANCE/SECURITY DEPOSIT, TO HAND OVER THE COPIES OF THE PROPERTY DOCUMENTS.
EXERCISE UTMOST CAUTION:
1). DEAL AND TRANSACT WITH THE ORIGINAL/DIRECT OWNER
2). ALL THE PAYMENTS MUST BE MADE ONLY THROUGH AN ACCOUNT PAYEE/NON TRANSFERABLE CHEQUE TO THE ORIGINAL OWNER
3). UNDERSTAND THE CONDITIONS and THE APPLICABLE LAWS OF THE SALE AGREEMENT
4). CONDUCT THE ENTIRE TRANSACTION WITH A REPUTED OR A CONCERN WHICH HAS A GOOD REPUTATION
5). DO NOT DEPEND ON BANK LOANS OR BANK APPROVALS. BANK APPROVAL DOES NOT MEAN, CLEAR TITLES.
6). DISCUSS ABOUT THE CONDITIONS OF THE SALE AGREEMENT, DURATION, ADDITIONAL/MISC EXPENSES WITH THE SELLER AND THE FORFEITURE CLAUSE, IN CASE OF DEFAULT
7). DO NOT MAKE ANY PAYMENT OR TAKE DECISION IN A HURRY
8). FINALLY, IF YOU ARE TOTALLY SATISFIED WITH THE PROPERTY, PRICE, DURATION AND THE REPUTATION OF THE SELLER, MAKE THE PAYMENT, AFTER CONSULTING YOUR ADVOCATE/SOLICITOR
Advance/ Security Deposit/Earnest money is paid or given at the time when the contract is entered into and, as a pledge for its due performance by the depositor to be forfeited in case of non-performance, by the depositor.
It (Advance/earnest money deposit/security deposit)represents the guarantee that the contract (clauses in the sale agreement) would be fulfilled by both the parties. In other words, ‘earnest’ is given to bind the contract, which is a part of the purchase price when the transaction is carried out and it will be forfeited when the transaction falls through by reason of the default or failure of the purchase.
To justify the forfeiture of advance money being part of ‘earnest money’/ `security deposit` the terms of the contract must be clear and explicit.
If the seller fails to perform the contract the purchaser can also get the double the amount/whatever the amount stated in the agreement, if it is so stipulated.
In case if the payment made is that of part payment of purchase price/consideration, then, it cannot be forfeited unless it is a guarantee for the due performance of the contract.
If the payment is made only towards part payment of consideration and not intended as earnest money then the forfeiture clause will not apply.