ASSIGNMENT 1

DRAFTING OF A SALES DEED

Everyone's dream is to own a property. Obviously you need money to

buy a property, but many recent instances of fraud and bogus selling of
property is something that is beyond money alone.
If there is one important thing that gives legal protection to ownership of
your property, it is the sale deed.
Understanding the basics of a sale deed can help you stay protected from
getting duped. Let us see the basics of a sale deed, its importance, how it
is prepared, what does it contain and how does it work.

WHAT IS SALE DEED?

A sale deed is one of the most valuable legal documents in a purchase or

sale of a property. It is governed by the Registration Act and is an
important document for both the buyer or the transferee and the seller or
the transferor.
The purchase or sale of property is not legally complete until a sale deed
is signed between the buyer and the seller. Usually a sale deed is signed
only after both the parties are satisfied and comply with the terms and
conditions as said in the agreement.

HOW IS IT PREPARED?

To begin with the buyer and the seller agree to prepare a draft sale deed
on non-judicial stamp paper. This value of the sale deed will differ from
state to state in the country and as prescribed by the Stamp Act of the
respective State.
Once the following details in the sale deed is agreed between the two
parties the sale deed is ready to be signed. The sale deed would also
require to be signed by at least two witnesses with all their details
included.
WHAT DOES IT CONTAIN?

A sale deed has almost all the details required to carry out the purchase or
sale of a property. Beginning with the basic details like the full names of
the buyer and the seller, and their addresses, the other details in the draft
sale deed would include the details of the property under sale such as its
identification number, its exact location, the address, total area of the
property, and the detail of the construction if it is a house.
Most importantly the sale deed would require the seller to certify that the
property under sale is free from any encumbrance and without any lien.

If there is an existing loan taken against the property the seller should
settle the loan and then only execute the sale deed. However, it is always
better for the buyer to check this with the local registrar's office.
Besides these the draft sale deed would also include the total amount to
be paid for the purchase/sale of the property, advance amount paid if any,
the dates on which the payment are made, how it is paid, the time given
for the payments, the details of the bank transactions of the payments, etc.
The sale deed would also mention about the receipt issued by the seller to
the buyer for the money received towards the sale transaction.
It would also clearly mention the exact date on which the seller would
hand over to the buyer the original property related documents and the
date of subsequent possession of the property under sale.
The draft sale deed would also mention the indemnity provisions for the
buyer and the seller.

HOW DOES IT WORK?

The sale deed is registered at the jurisdictional sub-registrar's office.

Apart from the buyer and seller of the property under sale the witnesses
should also be present at the time of registration.
Sometimes if the buyer or seller is not in a position to be physically
present his nominated agent empowered with a Power of Attorney is
legally allowed to execute the sale deed.
The original documents related to the sale of the property should be
produced within four months from the date the sale deed is to be
executed. If this is not possible the registrar might allow a grace period of
another four months to produce the original documents however this
delay might attract a maximum penalty of 10 times the registration
charges related to the property.
Usually, the buyer would pay the stamp duty and the registration charges.
And the seller on his part should ensure that all payments related to the
property such as property tax, cess, water and electricity charges, and
others was paid before the sale deed is executed.
So the next time before you sign on the dotted lines make sure you are
cross-checked all details.
Today, in India, the Conveyancing is being done by semiskilled persons
who do not possess the full and required legal knowledge and skills.
Many people involved in Conveyancing are hanging around the Sub
Registrar Offices with little knowledge regarding Contract Act, Transfer
of Property Act, Indian Stamp Act and Registration Act. They basically
got the skills of a computer operator and use cut and paste options
extensively to prepare any document by using the templates available
without understanding the uniqueness of each document and also
importance of capturing all the vital issues/aspects involved in the
transaction.

But, Conveyancing has been practiced as a fine art in England and other
developed nations by a class of trained lawyers who have specialized as
conveyancer after an intensive study of the law relating to contracts and
real property. Though the term conveyancing used by most of the
England Lawyers for drafting the documents of their clients but as the
years rolled by Conveyancing got its own importance even in India too.

In Modern India Draftsman plays an important role while drafting any

legal documents or deeds and he can do so if he is highly qualified in the
field of law so draftsman must keep in mind all the legal principles before
preparing any legal documents or deeds.

The word "CONVEYANCING" means transfer of property inter-vivos

i.e. between two living persons.

Conveyancing is an art of drafting deeds and legal documents whereby

any right, title or interest in tangible immovable property is transferred
from one person to another. Conveyancing is not just an ordinary art but
it is thoroughly based on legal knowledge and principles evolved over the
years. The term conveyancing is restricted to deeds and documents
concerned with the transfer of property; whereas drafting carries a
general meaning that of preparing any legal documents or deeds or any
other business oriented documents.
The word "SALE" defined under Section 54 of "The Transfer of Property
Act, 1882" is a transfer of ownership in exchange of price paid or
promised or part-paid and part-promised..
It means absolute transfer of tangible immovable property by the vendor
to the purchaser by entering into a contract for sale wherein both the
parties will settle the terms and conditions of transfer. Such transfer can
be done through the registered document and thus delivery of the
property can be by handing over the actual possession of the immovable
property by the vendor to the purchaser or the person legally authorised
by him. In a sale of tangible immovable property, all the statutory rights
i.e. easementary rights, beneficiary rights, actionable claims as well as
vested interest in the immovable property will be transferred in-toto in
favour of buyer from the vendor.

Before explaining the term "Sale Deed", let us define "Agreement to sell"
which precedes "SALE DEED" and it protects the interest of both buyer
and seller. An agreement to sell is a legal written document on which the
conveyance deed is drafted under which both the parties will settle certain
terms and conditions i.e. seller will be intending to transfer/sale the
property and buyer will be intending to purchase it.

An agreement to sell has to be executed by the seller and the buyer on a

non-judicial stamp paper and the same has to be duly signed by both the
parties. It has got legal value and if necessary can be produced as
evidence in a court of law. An agreement is a pre-requirement for the sale
of an immovable property wherein the buyer will pay to seller some
token amount as advance and seller must issue receipt for the amount
received as token amount.

While entering into an agreement to sell, the seller should mandatorily

state all the material defects in the property as well as in the title and it is
the right and duty of the buyer to investigate the title before buying the
property. There should not be any lis pendens i.e. pendency of suit in a
court of law regarding the property in sale. Lastly the agreement to sell
must contain all the terms and conditions which are necessary for
transaction of a valid sale of an immovable property.

In Andhra Pradesh and Telangana Agreement to sell is a compulsory

registrable document from the year 1999, now it is made compulsory
registrable document all over India. In Andhra Pradesh and Telangana,
5% Stamp Duty shall be paid on the market value of the property or
consideration whichever is higher on the agreement to sell; and the same
is adjustable on sale deed executed in pursuance of this agreement.

The word "SALE DEED" otherwise called as "Conveyance Deed" is a

legal written document executed by the vendor and the purchaser which
evidences the sale and transfer of ownership of the tangible immovable
property.

A sale deed is governed by the Transfer of Property Act and the

Registration Act, 1908 and is an important document for both the buyer
or the transferee and the seller or the transferor. A sale deed is executed,
usually, after the execution of the agreement to sell, and after compliance
of various terms and conditions between the seller and the purchaser
mutually. A sale deed is the main document which gives details of how
the seller got the property, at what consideration the seller is selling the
property and assurance to the purchaser that the property is free from any
encumbrances, liabilities or indemnity clauses. A sale deed acts as an
essential document for the further sale of the property by the purchaser as
it establishes the proof of ownership of property.

REQUIREMENTS OF SALE DEED

Sale deed is one of the most valuable legal documents in a purchase or

sale of a property. A sale deed is drafted by legal draftsman on a non-
judicial stamp paper of the requisite value as prescribed by stamp act of
the particular state concerned. Today, in many States including Andhra
Pradesh and Telangana, the stamp papers are available up to the value of
Rs.100/- only. The parties shall use 5-6 Non-Judicial stamp papers and
remaining amount shall be paid through challan system (AP) and through
stamping and other mechanism provided by the State Government (in
others States). A draftsman must include certain clauses while preparing
the construction of the sale deed which are as follows:

1. Name of the deed: It is the parties who have to decide that which
deed has to be prepared e.g. DEED OF SALE or DEED OF
MORTGAGE or DEED OF LEASE etc. and based on which there
will be transfer of ownership of immovable property. Since this
Sale deed, parties may use DEED OF SALE (OR) SALE DEED.

2. Parties to sale deed: An absolute sale deed must contain the

names, age and respective addresses of parties to the transaction
and both the parties i.e. seller and buyer must be competent to enter
into a contract so that it will not affect the validity of the valid sale.
It is very much important that the sale deed is duly signed and
executed by both the parties with their bona-fide intention. A valid
 sale deed must start with clear description of the parties.

3. Description of the property sold: A valid sale deed must contain

full description of the property which is the subject matter of sale.
It must include identification number, total plot area, construction
details as well as its location with its surrounding areas. A schedule
of the property must be included in the sale deed which will define
the exact location where the property is actually situated.

4. Agreement for sale: In the agreement for sale both the parties may
mutually settle the terms and conditions of the agreement so that it
will not affect the rights of the parties. A sale deed may be
preceded by agreement to sell.

5. Sale consideration clause: A sale deed must include the clause

stating the sale consideration/amount as agreed between the seller
and the buyer which has to be paid by the buyer to the seller on the
execution of sale deed. A sale amount should be clearly stated in
sale deed as agreed in the agreement to sell so that there should not
be any onus on the parties to the transaction.

6. Advance payment, if any: If there is any transaction of token

amount paid by the buyer to the seller then it has to be clearly
mentioned in the sale deed, and how much is the remaining balance
to be paid on the execution of the sale deed.

7. Mode of payment: It is always the buyer who has to decide that

how he is going to pay the sale consideration amount whether by
Cash /Cheque/ Demand Draft and the same has to be agreed by the
seller.

8. Passing of the title: A sale deed should contain the clause when
the original title of the property to be passed to the purchaser. A
time limit should be given to the seller for the transfer of the title.
Once the title of the immovable property is transferred, all the
rights will pass to the purchaser.

9. Delivery of the possession: The possession of the immovable

property will be transferred to the purchaser by the vendor once the
registration process is completed. A clause in the sale deed must
state when there will be actual delivery of the possession.

10.Indemnity provision if any: A seller must clear all the statutory

 charges i.e. property tax, electricity charges, water bills, cess,
society charges, maintenance charges and all other charges relating
to the property before the execution of the sale deed. In case there
is any encumbrance on the property, the seller needs to repay the
loan amount and get the property papers cleared of the
encumbrance. It is the duty of the buyer to verify the encumbrance
status from the office of the Registrar/Sub Registrar/Mee Seva
Centres (in AP).

11.Execution: Once the Sale Deed is prepared all the parties to the
deed shall execute it by affixing their thumb impression or full
signature. Each page should be signed by the seller and buyer. Any
erasure, alteration, addition or deletion is to be authenticated by
full signature of the parties. Execution of the sale deed requires to
be witnessed by two witnesses. The witnesses shall give their full
particulars and addresses.

12.Registration According to Section: 17 of "The Registration Act,

1908", the registration of a tangible immovable property is
compulsory if the value of the respective property exceeds rupees
100/- and it is the registration of the property which makes the sale
valid. For getting the registration done both the parties must be
present in person or through their duly authorized agent(s) before
the jurisdictional sub-registrar office with the original documents
within four months from the date of execution. A stamp duty has to
be paid by the purchaser to the sub-registrar for getting the
registration done. A certified copy of the registration document to
be obtained for the future reference.

13.Testatum: Once all the terms and conditions have been settled
between both the parties, a sale deed is prepared. The executed sale
deed should be witnessed by at least two witnesses one from seller
side and one from buyer side, giving their full names, addresses
and signatures.

14.Original documents: Once the property gets registered under the

registration act all the original documents of the sold property to be
hand over by the seller to the purchaser. All the statutory rights
along with ownership, possession, title, interest will get vested in
favour of the purchaser.

15.Default clause: An agreement for sale of immovable property

should include the clause stating if there is any default by the
 vendor or the purchaser then the party who rescinds the contract
need to pay damages to the other party for the breach of contract so
that it will not affect to the execution of the sale deed.

Since drafting of sale deed requires abundant caution and presence of

mind with sufficient knowledge of property and other allied laws, it
would be better if services of advocates who have vast experience in
property transactions are utilized to avoid unexpected and uncalled for
litigations which may arise in a poorly drafted sale deed.

SAMPLE SALES DEED

Important Points

1. Format - A sale deed contains matter under the following headings:

Description, Date, Parties
Recitals, Testatum, Operative Words
Parcel, Exceptions & Reservation, Habendum
Covenant, Testmonium, Execution, Attestation
2. Should mention how did the vendor get his title - self
earned/inherited, bought from
3. Should mention the need of the vendor

Sale Deed of House/Residential Plot

THIS SALE DEED is executed BETWEEN

Shri _____________ Son of Shri ________________age ___ years,
occupation ____ ___ , resident of hereinafter called the vendor, (which
expression shall, unless repugnant to the context, mean and include his
heirs, executors, administrators and assigns) of the One Part
AND
Shri _____________ Son of Shri ________________age ___ years,
occupation ____ ___ , resident of hereinafter called the PURCHASER,
(which expression shall, unless repugnant to the context, mean and
include his heirs, executors, administrators and assigns) of the Other Part
on this____ DAY of ______ AT _____.

WHEREAS the vendor had purchased from Shri _____ a piece of

residential plot bearing no 123 and measuring 2000 Sq Ft on the basis of
Sale Deed vide document no____ and registered on in the office of the
Sub Registrar ______
AND WHEREAS the property is self acquired by the vendor;
AND WHEREAS the vendor is the lawfully owned and possessed of the
dwelling house being premises No ....... in town, described in further
details in the schedule here under;
AND WHEREAS the seller is in need of money for his daughter's
marriage;
AND WHEREAS the vendor has agreed to sell, transfer, and convey the
said property unto the purchaser for the price of Rs ______/- (in words)
Only;

NOW, THIS SALE DEED WITNESSES as follows

:

1. In consideration of the sum of Rs ..... ( ) only paid by the purchaser to

the vendor by account payee cheque (Cheque No. 123456) with the
execution of these presents the receipts whereof the vendor admits and
acknowledges, the said vendor does hereby grant, convey, sell, transfer,
and assign into and to the use of the said purchases fee from all
encumbrances.

2. All that house with compound wall, kitchen, and garden belonging
thereto commonly called premises No._____ and as described in the
schedule here under.

3. And all rights, title, interest, claim and demand whatsoever of the
vendor into or upon same and every part thereof to have and to hold the
same unto and to use of the purchaser, his heirs, executors,
administrators, assigns, absolutely and for ever together with title deed
and any other evidences of title.

4. And that the house is not mortgaged or has no encumbrance of any

kind.

5. And that nobody has right to any kind of claim on this house

6. And there no kind of tax is due on this house property

THE SCHEDULE OF THE PROPERTY ABOVE REFERRED TO :

All that piece and parcel of land situate within the Registration Division
& District Sub-Division & Taluka within the local limits of the Indore
Municipal Corporation, revenue village bearing Plot No. ___, out of
Survey No. ____, and measuring _____ sqft or
thereabouts, and bounded by as follows :
On or towards the East _
On or towards the South _
On or towards the West _
On or towards the North _

IN WITNESS WHEREOF the parties hereto have signed here under at

INDORE the date first above mentioned.

(Signature)
VENDOR

(Signature)
PURCHASER

Memo of Consideration
Received of and from the within named purchase the sum of Rs. _______
( ____ Only) being the full consideration within name was to be paid by
the purchaser to us.

We say received.

(Signature of Vendor)
VENDOR

Witnesses:

1. (Signature)
Name and Address

2.(Signature)
Name and Address
 ASSIGNMENT 2

REGISTRATION OF SALES DEED

Contract of Sale
Contract of Sale made as of Date between Seller, Address: Full Address, Social
Security Number/ Fed. I.D. No(s): SSN, hereinafter called Seller and Buyer,
Address: Full Address, Social Security Number/ Fed. I.D. No(s): SSN, hereinafter
called Purchaser.
The parties hereby agree as follows:
1. Premises.
Seller shall sell and convey and Purchaser shall purchase the property, together with
all buildings and improvements thereon (collectively the Premises), more fully
described on a separate page marked Schedule A, annexed hereto and made a part
hereof and also known as: Property Name Street Address: Address. Tax Map
Designation: Reference.
Together with Sellers ownership and rights, if any, to land lying in the bed of any
street or highway, opened or proposed, adjoining the Premises to the center line
thereof, including any right of Seller to any unpaid award by reason of any taking by
condemnation and/or for any damage to the Premises by reason of change of grade of
any street or highway. Seller shall deliver at no additional cost to Purchaser, at
Closing (as hereinafter defined), or thereafter, on demand, any documents that
Purchaser may reasonably require for the conveyance of such title and the assignment
and collection of such award or damages.
2. Personal Property.
This sale also includes all fixtures and articles of personal property now attached or
appurtenant to the Premises, unless specifically excluded below. Seller represents and
warrants that at Closing they will he paid for and owned by Seller, free and clear of
all liens and encumbrances, except any existing mortgage to which this sale may be
subject. They include, but are not limited to, plumbing, heating, lighting and cooking
fixtures, chandeliers, bathroom and kitchen cabinets and counters, mantels, door
mirrors, switch plates and door hardware, venetian blinds, window treatments, shades,
screens, awnings, storm windows, storm doors, window boxes, mail box, TV aerials,
weather vane, flagpole, pumps, shrubbery, fencing, outdoor statuary, tool shed,
dishwasher, washing machine, clothes dryer, garbage disposal unit, range, oven, built-
in microwave oven, refrigerator, freezer, air conditioning equipment and installations,
wall to wall carpeting and built ins not excluded below [[strike out inapplicable
items]].
Excluded from this sale are furniture and household furnishings and Other Excluded
Items.
3. Purchase Price. The purchase price is Amount in Letters ($Amount), payable as
follows:
(a) on the signing of this contract, by Purchasers good check payable to the
Escrowee (as hereinafter defined), subject to collection, the receipt of which is hereby
acknowledged, to be held in escrow pursuant to paragraph 6 of this contract (the
Downpayment): $Amount.
(b) by allowance for the principal amount unpaid on the existing mortgage on the
date hereof, payment of which Purchaser shall assume by joinder in the deed:
$Amount.
(c) by a purchase money note and mortgage from Purchaser to Seller: $Amount.
(d) balance at Closing in accordance with paragraph 7: $Amount.
4. Existing Mortgage. (Delete if inapplicable) If this sale is subject to an existing
mortgage as indicated in paragraph 3(b) above:
(a) The Premises shall be conveyed subject to the continuing lien of the existing
mortgage, which is presently payable, with interest at the rate of Interest percent per
annum, in monthly installments of $Amount which include principal, interest and
escrow amounts, if any, and with any balance of principal being due and payable on
Recurring Date.
(b) To the extent that any required payments are made on the existing mortgage
between the date hereof and Closing which reduce the unpaid principal amount
thereof below the amount shown in paragraph 3(b), then the balance of the price
payable at Closing under paragraph 3(d) shall be increased by the amount of the
payments of principal. Seller represents and warrants that the amount shown in
paragraph 3(b) is substantially correct and agrees that only payments required by the
existing mortgage will be made between the date hereof and Closing.
(c) If there is a mortgagee escrow account, Seller shall assign it to Purchaser, if it
can be assigned, and in that case Purchaser shall pay the amount in the escrow
account to Seller at Closing.
(d) Seller shall deliver to Purchaser at Closing a certificate dated not more than 30
days before Closing signed by the holder of the existing mortgage, in form for
recording, certifying the amount of the unpaid principal, the date to which interest has
been paid and the amounts, if any, claimed to be unpaid for principal and interest,
itemizing the same. Seller shall pay the fees for recording such certificate. If the
holder of the existing mortgage is a bank or other institution as defined in Section 274
a of the Real Property Law it may, instead of the certificate, furnish a letter signed by
a duly authorized officer, employee or agent, dated not more than 30 days before
Closing, containing the same information.
(e) Seller represents and warrants that (i) Seller has delivered to Purchaser true and
complete copies of the existing mortgage, the note secured thereby and any extensions
and modifications thereof, (ii) the existing mortgage is not now, and at the time of
Closing will not be, in default, and (iii) the existing mortgage does not contain any
provision that permits the holder of the mortgage to require its immediate payment in
full or to change any other term thereof by reason of the sale or conveyance of the
Premises.
5. Purchase Money Mortgage. (Delete if inapplicable) If there is to be a purchase
money mortgage as indicated in paragraph 3(c) above:
(a) The purchase money note and mortgage shall be drawn by the attorney for Seller
in the form attached or, if not, in the standard form adopted by the New York State
Land Title Association. Purchaser shall pay at Closing the mortgage recording tax,
recording fees and the attorneys fees in the amount of $Fee for its preparation.
(b) The purchase money note and mortgage shall also provide that it is subject and
subordinate to the lien of the existing mortgage and any extensions, modifications,
replacements or consolidations of the existing mortgage, provided that (i) the interest
rate thereof shall not be greater than Interest percent per annum and the total debt
service thereunder shall not be greater than $Amount per annum, and (ii) if the
principal amount thereof shall exceed the amount of principal owing and unpaid on
the existing mortgage at the time of placing such new mortgage or consolidated
mortgage, the excess be paid to the holder of such purchase money mortgage in
reduction of the principal thereof. The purchase money mortgage shall also provide
that such payment to the holder thereof shall not alter or affect the regular
installments, if any, of principal payable thereunder and that the holder thereof will,
on demand and without charge therefor, execute, acknowledge and deliver any
agreement or agreements further to effectuate such subordination.
6. Downpayment in Escrow.
(a) Sellers attorney (Escrowee) shall hold the Downpayment in escrow in a
segregated bank account at Bank, address: Address, until Closing or sooner
termination of this contract and shall pay over or apply the Downpayment in
accordance with the terms of this paragraph. Escrowee shall hold the Downpayment
in a(n) interest-bearing account for the benefit of the parties. If interest is held for the
benefit of the parties, it shall be paid to the party entitled to the Downpayment and the
party receiving the interest shall pay any income taxes thereon. If interest is not held
for the benefit of the parties, the Downpayment shall be placed in an IOLA account or
as otherwise permitted or required by law. The Social Security or Federal
Identification numbers of the parties shall be furnished to Escrowee upon request. At
Closing, the Downpayment shall be paid by Escrowee to Seller. If for any reason
Closing does not occur and either party gives Notice (as defined in paragraph 25) to
Escrowee demanding payment of the Downpayment, Escrowee shall give prompt
Notice to the other party of such demand. If Escrowee does not receive Notice of
objection from such other party to the proposed payment within 10 business days after
the giving of such Notice, Escrowee is hereby authorized and directed to make such
payment. If Escrowee does receive such Notice of objection within such 10 day
period or if for any other reason Escrowee in good faith shall elect not to make such
payment, Escrowee shall continue to hold such amount until otherwise directed by
Notice from the parties to this contract or a final, nonappealable judgment, order or
decree of a court. However, Escrowee shall have the right at any time to deposit the
Downpayment and the interest thereon with the clerk of a court in the county in which
the Premises are located and shall give Notice of such deposit to Seller and Purchaser.
Upon such deposit or other disbursement in accordance with the terms of this
paragraph, Escrowee shall be relieved and discharged of all further obligations and
responsibilities hereunder.
(b) The parties acknowledge that Escrowee is acting solely as a stakeholder at their
request and for their convenience and that Escrowee shall not be liable to either party
for any act or omission on its part unless taken or suffered in bad faith or in willful
disregard of this contract or involving gross negligence on the part of Escrowee.
Seller and Purchaser jointly and severally (with right of contribution) agree to defend
(by attorneys selected by Escrowee), indemnify and hold Escrowee harmless from
and against all costs, claims and expenses (including reasonable attorneys fees)
incurred in connection with the performance of Escrowees duties hereunder, except
with respect to actions or omissions taken or suffered by Escrowee in bad faith or in
willful disregard of this contract or involving gross negligence on the part of
Escrowee.
(c) Escrowee may act or refrain from acting in respect of any matter referred to
herein in full reliance upon and with the advice of counsel which may be selected by
it (including any member of its firm) and shall be fully protected in so acting or
refraining from action upon the advice of such counsel.
(d) Escrowee acknowledges receipt of the Downpayment by check subject to
collection and Escrowees agreement to the provisions of this paragraph by signing in
the place indicated on the signature page of this contract.
(e) Escrowee or any member of its firm shall be permitted to act as counsel for
Seller in any dispute as to the disbursement of the Downpayment or any other dispute
between the parties whether or not Escrowee is in possession of the Downpayment
and continues to act as Escrowee.
(f) The party whose attorney is Escrowee shall be liable for loss of the
Downpayment.
7. Acceptable Funds. All money payable under this contract, unless otherwise
specified, shall be paid by:
(a) Cash, but not over $1,000.00;
(b) Good certified check of Purchaser drawn on or official check issued by any
bank, savings bank, trust company or savings and loan association having a banking
office in the State of New York, unendorsed and payable to the order of Seller, or as
Seller may otherwise direct upon reasonable prior notice (by telephone or otherwise)
to Purchaser;
(c) As to money other than the purchase price payable to Seller at Closing,
uncertified check of Purchaser up to the amount of $Amount; and
(d) As otherwise agreed to in writing by Seller or Sellers attorney.
8. Mortgage Commitment Contingency. Delete paragraph if inapplicable
(a) The obligation of Purchaser to purchase under this contract is conditioned upon
issuance, on or before X days after a fully executed copy of this contract is given to
Purchaser or Purchasers attorney in the manner set forth in paragraph 25 or
subparagraph 8(k) (the Commitment Date), of a written commitment from an
Institutional Lender pursuant to which such Institutional Lender agrees to make a first
mortgage loan, other than a VA, FHA or other governmentally insured loan, to
Purchaser, at Purchaser's sole cost and expense, of $Amount for a term of at least
[{X]] years (or such lesser sum or shorter term as Purchaser shall be willing to accept)
at the prevailing fixed or adjustable rate of interest and on other customary
commitment terms (the Commitment). To the extent a Commitment is conditioned
on the sale of Purchasers current home, payment of any outstanding debt, no material
adverse change in Purchasers financial condition or any other customary conditions,
Purchaser accepts the risk that such conditions may not be met; however, a
commitment conditioned on the Institutional Lenders approval of an appraisal shall
not be deemed a Commitment hereunder until an appraisal is approved (and if that
does not occur before the Commitment Date, Purchaser may cancel under
subparagraph 8(e) unless the Commitment Date is extended). Purchasers obligations
hereunder are conditioned only on issuance of a Commitment. Once a Commitment is
issued, Purchaser is bound under this contract even if the lender fails or refuses to
fund the loan for any reason.
(b) Purchaser shall (i) make prompt application to one or, at Purchasers election,
more than one Institutional Lender for such mortgage loan, (ii) furnish accurate and
complete information regarding Purchaser and members of Purchasers family, as
required, (iii) pay all fees, points and charges required in connection with such
application and loan, (iv) pursue such application with diligence, and (v) cooperate in
good faith with such Institutional Lender(s) to obtain a Commitment. Purchaser shall
accept a Commitment meeting the terms set forth in subparagraph 8(a) and shall
comply with all requirements of such Commitment (or any other commitment
accepted by Purchaser). Purchaser shall furnish Seller with a copy of the Commitment
promptly after receipt thereof.
(c) [[Delete this subparagraph if inapplicable]] Prompt submission by Purchaser of
an application to a mortgage broker registered pursuant to Article 12 D of the New
York Banking Law (Mortgage Broker) shall constitute full compliance with the
terms and conditions set forth in subparagraph 8(b)(i), provided that such Mortgage
Broker promptly submits such application to such Institutional Lender(s). Purchaser
shall cooperate in good faith with such Mortgage Broker to obtain a Commitment
from such Institutional Lender(s).
(d) If all Institutional Lenders to whom applications were made deny such
applications in writing prior to the Commitment Date, Purchaser may cancel this
contract by giving Notice thereof to Seller, with a copy of such denials, provided that
Purchaser has complied with all its obligations under this paragraph 8.
(e) If no Commitment is issued by the Institutional Lender on or before the
Commitment Date, then, unless Purchaser has accepted a written commitment from
an Institutional Lender that does not conform to the terms set forth in subparagraph
8(a), Purchaser may cancel this contract by giving Notice to Seller within 5 business
days after the Commitment Date, provided that such Notice includes the name and
address of the Institutional Lender(s) to whom application was made and that
Purchaser has complied with all its obligations under this paragraph 8.
(f) If this contract is canceled by Purchaser pursuant to subparagraphs 8(d) or (e),
neither party shall thereafter have any further rights against, or obligations or
liabilities to, the other by reason of this contract, except that the Downpayment shall
be promptly refunded to Purchaser and except as set forth in paragraph 27.
(g) If Purchaser fails to give timely Notice of cancellation or if Purchaser accepts a
written commitment from an Institutional Lender that does not conform to the terms
set forth in subparagraph 8(a), then Purchaser shall be deemed to have waived
Purchasers right to cancel this contract and to receive a refund of the Downpayment
by reason of the contingency contained in this paragraph 8.
(h) If Seller has not received a copy of a commitment from an Institutional Lender
accepted by Purchaser by the Commitment Date, Seller may cancel this contract by
giving Notice to Purchaser within 5 business days after the Commitment Date, which
cancellation shall become effective unless Purchaser delivers a copy of such
commitment to Seller within 10 business days after the Commitment Date. After such
cancellation neither party shall have any further rights against, or obligations or
liabilities to, the other by reason of this contract, except that the Downpayment shall
be promptly refunded to Purchaser (provided Purchaser has complied with all of its
obligations under this paragraph 8) and except as set forth in paragraph 27.
(i) The attorneys for the parties are hereby authorized to give and receive on behalf
of their clients all Notices and deliveries under this paragraph 8.
(j) For purposes of this contract, the term Institutional Lender shall mean any
bank, savings bank, private banker, trust company, savings and loan association,
credit union or similar banking institution whether organized under the laws of this
state, the United States or any other state; foreign banking corporation licensed by the
Superintendent of Banks of New York or regulated by the Comptroller of the
Currency to transact business in New York State; insurance company duly organized
or licensed to do business in New York State; mortgage banker licensed pursuant to
Article 12-D of the Banking Law; and any instrumentality created by the United
States or any state with the power to make mortgage loans.
(k) For purposes of subparagraph (a), Purchaser shall be deemed to have been given
a fully executed copy of this contract on the third business day following the date of
ordinary or regular mailing, postage prepaid.
9. Permitted Exceptions. The Premises are sold and shall be conveyed subject to:
(a) Zoning and subdivision laws and regulations, and landmark, historic or wetlands
designation, provided that they are not violated by the existing buildings and
improvements erected on the property or their use;
(b) Consents for the erection of any structures on, under or above any streets on
which the Premises abut;
(c) Encroachments of stoops, areas, cellar steps, trim and cornices, if any, upon any
street or highway;
(d) Real estate taxes that are a lien, but are not yet due and payable; and
(e) The other matters, if any, including a survey exception, set forth in a Rider
attached.
10. Governmental Violations and Orders.
(a) Seller shall comply with all notes or notices of violations of law or municipal
ordinances, orders or requirements noted or issued as of the date hereof by any
governmental department having authority as to lands, housing, buildings, fire, health,
environmental and labor conditions affecting the Premises. The Premises shall be
conveyed free of them at Closing. Seller shall furnish Purchaser with any
authorizations necessary to make the searches that could disclose these matters.
(b) [[Delete if inapplicable]] All obligations affecting the Premises pursuant to the
Administrative Code of the City of New York incurred prior to Closing and payable
in money shall be discharged by Seller at or prior to Closing.
11. Sellers Representations.
(a) Seller represents and warrants to Purchaser that:
(i) The Premises abut or have a right of access to a public road;
(ii) Seller is the sole owner of the Premises and has the full right, power and
authority to sell, convey and transfer the same in accordance with the terms of this
contract;
(iii) Seller is not a foreign person, as that term is defined for purposes of the
Foreign Investment in Real Property Tax Act, Internal Revenue Code (IRC)
Section 1445, as amended, and the regulations promulgated thereunder (collectively
FIRPTA);
(iv) The Premises are not affected by any exemptions or abatements of taxes; and
(v) Seller has been known by no other name for the past ten years, except Name.
(b) Seller covenants and warrants that all of the representations and warranties set
forth in this contract shall be true and correct at Closing.
(c) Except as otherwise expressly set forth in this contract, none of Sellers
covenants, representations, warranties or other obligations contained in this contract
shall survive Closing.
12. Condition of Property.
Purchaser acknowledges and represents that Purchaser is fully aware of the physical
condition and state of repair of the Premises and of all other property included in this
sale, based on Purchasers own inspection and investigation thereof, and that
Purchaser is entering into this contract based solely upon such inspection and
investigation and not upon any information, data, statements or representations,
written or oral, as to the physical condition, state of repair, use, cost of operation or
any other matter related to the Premises or the other property included in the sale,
given or made by Seller or its representatives, and shall accept the same as is in
their present condition and state of repair, subject to reasonable use, wear, tear and
natural deterioration between the date hereof and the date of Closing (except as
otherwise set forth in paragraph 16(e)), without any reduction in the purchase price or
claim of any kind for any change in such condition by reason thereof subsequent to
the date of this contract. Purchaser and its authorized representatives shall have the
right, at reasonable times and upon reasonable notice (by telephone or otherwise) to
Seller, to inspect the Premises before Closing.
13. Insurable Title.
Seller shall give and Purchaser shall accept such title as Insurance shall be willing to
approve and insure in accordance with its standard form of title policy approved by
the New York State Insurance Department, subject only to the matters provided for in
this contract.
14. Closing, Deed and Title.
(a) Closing means the settlement of the obligations of Seller and Purchaser to each
other under this contract, including the payment of the purchase price to Seller, and
the delivery to Purchaser of a deed in proper statutory short form for record, duly
executed and acknowledged, so as to convey to Purchaser fee simple title to the
Premises, free of all encumbrances, except as otherwise herein stated. The deed shall
contain a covenant by Seller as required by subd. 5 of Section 13 of the Lien Law.
(b) If Seller is a corporation, it shall deliver to Purchaser at the time of Closing (i) a
resolution of its Board of Directors authorizing the sale and delivery of the deed, and
(ii) a certificate by the Secretary or Assistant Secretary of the corporation certifying
such resolution and setting forth facts showing that the transfer is in conformity with
the requirements of Section 909 of the Business Corporation Law. The deed in such
case shall contain a recital sufficient to establish compliance with that Section.
15. Closing Date and Place.
Closing shall take place at the office of Name at Hour oclock on Date or, upon
reasonable notice (by telephone or otherwise) by Purchaser, at the office of Name.
20. Use of Purchase Price to Remove Encumbrances.
If at Closing there are other liens or encumbrances that Seller is obligated to pay or
discharge, Seller may use any portion of the cash balance of the purchase price to pay
or discharge them, provided Seller shall simultaneously deliver to Purchaser at
Closing instruments in recordable form and sufficient to satisfy such liens or
encumbrances of record, together with the cost of recording or filing said instruments.
As an alternative Seller may deposit sufficient monies with the title insurance
company employed by Purchaser acceptable to and required by it to assure their
discharge, but only if the title insurance company will insure Purchasers title clear of
the matters or insure against their enforcement out of the Premises and will insure
Purchasers Institutional Lender clear of such matters. Upon reasonable prior notice
(by telephone or otherwise), Purchaser shall provide separate certified or official bank
checks as requested to assist in clearing up these matters.
21. Title Examination; Sellers Inability to Convey; Limitations of Liability.
(a) Purchaser shall order an examination of title in respect of the Premises from a title
company licensed or authorized to issue title insurance by the New York State
Insurance Department or any agent for such title company promptly after the
execution of this contract or, if this contract is subject to the mortgage contingency set
forth in paragraph 8, after a mortgage commitment has been accepted by Purchaser.
Purchaser shall cause a copy of the title report and of any additions thereto to be
delivered to the attorney(s) for Seller promptly after receipt thereof.
(b) (i) If at the date of Closing Seller is unable to transfer title to Purchaser in
accordance with this contract, or Purchaser has other valid grounds for refusing to
close, whether by reason of liens, encumbrances or other objections to title or
otherwise (herein collectively called Defects), other than those subject to which
Purchaser is obligated to accept title hereunder or which Purchaser may have waived
and other than those which Seller has herein expressly agreed to remove, remedy or
discharge and if Purchaser shall be unwilling to waive the same and to close title
without abatement of the purchase price, then, except as hereinafter set forth, Seller
shall have the right, at Sellers sole election, either to take such action as Seller may
deem advisable to remove, remedy, discharge or comply with such Defects or to
cancel this contract; (ii) if Seller elects to take action to remove, remedy or comply
with such Defects, Seller shall be entitled from time to time, upon Notice to
Purchaser, to adjourn the date for Closing hereunder for a period or periods not
exceeding 60 days in the aggregate (but not extending beyond the date upon which
Purchasers mortgage commitment, if any, shall expire), and the date for Closing shall
be adjourned to a date specified by Seller not beyond such period. If for any reason
whatsoever, Seller shall not have succeeded in removing, remedying or complying
with such Defects at the expiration of such adjournment(s), and if Purchaser shall still
be unwilling to waive the same and to close title without abatement of the purchase
price, then either party may cancel this contract by Notice to the other given within 10
days after such adjourned date; (iii) notwithstanding the foregoing, the existing
mortgage (unless this sale is subject to the same) and any matter created by Seller
after the date hereof shall be released, discharged or otherwise cured by Seller at or
prior to Closing.
(c) If this contract is cancelled pursuant to its terms, other than as a result of
Purchasers default, this contract shall terminate and come to an end, and neither party
shall have any further rights, obligations or liabilities against or to the other hereunder
or otherwise, except that: (i) Seller shall promptly refund or cause the Escrowee to
refund the Downpayment to Purchaser and, unless cancelled as a result of Purchasers
default or pursuant to paragraph 8, to reimburse Purchaser for the net cost of
examination of title, including any appropriate additional charges related thereto, and
the net cost, if actually paid or incurred by Purchaser, for updating the existing survey
of the Premises or of a new survey, and (ii) the obligations under paragraph 27 shall
survive the termination of this contract.
22. Affidavit as to Judgments, Bankruptcies, etc.
If a title examination discloses judgments, bankruptcies or other returns against
persons having names the same as or similar to that of Seller, Seller shall deliver an
affidavit at Closing showing that they are not against Seller.
23. Defaults and Remedies.
(a) If Purchaser defaults hereunder, Sellers sole remedy shall be to receive and retain
the Downpayment as liquidated damages, it being agreed that Sellers damages in
case of Purchasers default might be impossible to ascertain and that the
Downpayment constitutes a fair and reasonable amount of damages under the
circumstances and is not a penalty.
(b) If Seller defaults hereunder, Purchaser shall have such remedies as Purchaser
shall be entitled to at law or in equity, including, but not limited to, specific
performance.
24. Purchasers Lien.
All money paid on account of this contract, and the reasonable expenses of
examination of title to the Premises and of any survey and survey inspection charges,
are hereby made liens on the Premises, but such liens shall not continue after default
by Purchaser under this contract.
25. Notices.
Any notice or other communication (Notice) shall be in writing and either
(a) sent by either of the parties hereto or by their respective attorneys who are
hereby authorized to do so on their behalf or by the Escrowee, by registered or
certified mail, postage prepaid, or
(b) delivered in person or by overnight courier, with receipt acknowledged, to the
respective addresses given in this contract for the party and the Escrowee, to whom
the Notice is to be given, or to such other address as such party or Escrowee shall
hereafter designate by Notice given to the other party or parties and the Escrowee
pursuant to this paragraph. Each Notice mailed shall be deemed given on the third
business day following the date of mailing the same, except that any notice to
Escrowee shall be deemed given only upon receipt by Escrowee and each Notice
delivered in person or by overnight courier shall be deemed given when delivered, or
(c) with respect to paragraph 7(b) or 20, sent by fax to the partys attorney. Each
notice by fax shall be deemed given when transmission is confirmed by the sender's
fax machine. A copy of each notice sent to a party shall also be sent to the party's
attorney. The attorneys for the parties are hereby authorized to give and receive on
behalf of their clients all Notices and deliveries.
26. No Assignment.
This contract may not be assigned by Purchaser without the prior written consent of
Seller in each instance and any purported assignment(s) made without such consent
shall be void.
27. Broker.
Seller and Purchaser each represents and warrants to the other that it has not dealt
with any real estate broker in connection with this sale other than Name (Broker)
and Seller shall pay Broker any commission earned pursuant to a separate agreement
between Seller and Broker. Seller and Purchaser shall indemnify and defend each
other against any costs, claims and expenses, including reasonable attorneys fees,
arising out of the breach on their respective parts of any representation or agreement
contained in this paragraph. The provisions of this paragraph shall survive Closing or,
if Closing does not occur, the termination of this contract.
28. Miscellaneous.
(a) All prior understandings, agreements, representations and warranties, oral or
written, between Seller and Purchaser are merged in this contract; it completely
expresses their full agreement and has been entered into after full investigation,
neither party relying upon any statement made by anyone else that is not set forth in
this contract.
(b) Neither this contract nor any provision thereof may be waived, changed or
cancelled except in writing. This contract shall also apply to and bind the heirs,
distributes, legal representatives, successors and permitted assigns of the respective
parties. The parties hereby authorize their respective attorneys to agree in writing to
any changes in dates and time periods provided for in this contract.
(c) Any singular word or term herein shall also be read as in the plural and the
neuter shall include the masculine and feminine gender, whenever the sense of this
contract may require it.
(d) The captions in this contract are for convenience of reference only and in no
way define, limit or describe the scope of this contract and shall not be considered in
the interpretation of this contract or any provision hereof.
(e) This contract shall not be binding or effective until duly executed and delivered
by Seller and Purchaser.
(f) Seller and Purchaser shall comply with IRC reporting requirements, if
applicable. This subparagraph shall survive Closing.
(g) Each party shall, at any time and from time to time, execute, acknowledge where
appropriate and deliver such further instruments and documents and take such other
action as may be reasonably requested by the other in order to carry out the intent and
purpose of this contract. This subparagraph shall survive Closing.
(h) This contract is intended for the exclusive benefit of the parties hereto and,
except as otherwise expressly provided herein, shall not be for the benefit of, and
shall not create any rights in, or be enforceable by, any other person or entity.
(i) If applicable, the complete and fully executed disclosure of information on lead
based paint and/or lead based paint hazards is attached hereto and made a part hereof.