- This topic has 38 replies, 10 voices, and was last updated 1 year, 4 months ago by
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UWe approached an NRI property owner to buy his flat. We agreed on the price (have proof in the WA chat) and got the go ahead from him regarding the same.
We paid him a token amount thru bank transfer, post which he sent us relevant documents so we could process our bank loan.
Now, when we engaged a lawyer to draw up the sale agreement, the seller refused to accept it since he doesn’t want us to deposit the TDS on the agreement value, insisting instead that we pay him that amount in cash.
We refused that since we did not want to deal with a tax notice later on, and wanted to be above board regarding all legal formalities.
His message stating that he cant go ahead with the deal, came right after we had already paid the lawyer to draw up the agreement.
He was willing to only return our token amount and refused to compensate our lawyer’s expenses.
Later, he stopped answering our calls completely.Left with no option we sent him a legal notice demanding compensation. He has not replied to the notice either.
Our lawyer is insisting that we file a civil suit against him. But we are unsure if that will yield any result.
Ideally we would like him to either compensate us for the token amount and legal expenses, or continue with the deal as we had agreed upon.Would appreciate any advice regarding what we should do. We are based in Mumbai if that’s relevant.
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USo there’s no legal recourse for us to get out money back?
Honestly, I myself am wary of taking on all this legal hassle. But it feels unfair that we are being cheated out of our money over no fault of ours.Also our lawyer’s suggesting appealing for an injunction on the sale of the property. Im not sure if that has any legal standing.
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RYou can file a suit for specific performance as you have paid the token amount and also you have got the relevant documents with you….. The person has to give you the property now…. You can also seek for an injection if the person(NRI) is selling this to another person
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UWe didn’t get to signing an MoU but we have proof of agreement to the deal
Along with back and forth communication where he sent us his property document, building share certificate, Adhaar and PAN card etc so we could apply for a home loan and create a sale agreement, after we sent him the token
So with this proof will such a suit go through?-
RYes it will be proof just hire a good lawyer not a lawyer who will do it in less fees as less fees lawyers will get their benefits by taking parts of the property in the name of “SETTLEMENT”
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UCould you give me pointers on what lawyer to look for? Any area of specialty I should be looking at?
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RGo to your nearest district court where your case will be fought…. Then observe there for 2-3 days and go in court rooms for civil matters and see which of the lawyers is appearing mostly….. Ask people their don’t fall for one only ask many of them then shortlist a name that you feel is good…..
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VThe decorum in property deals in India is that if the deal is canceled by the seller, he returns 2x of the earnest money, and if buyer cancels then they forfeit the earnest money.
You have a strong case against the seller, and should file a civil suit to enforce sale of he property, or at the minimum return your earnest money and associated expenses.
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UThank you for the reply
I will discuss this with the lawyer
Just worried about legal fees and this case endlessly dragging on-
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VThe total end to end legal expenses on this case should be in the range of 25-30K.
It’s also dependent on how much money you have given as earnest money. It it less, then forfeit it and treat it as a lesson. It it substantial, then I would fight it out.
Additionally, if you want to teach him a lesson, then money shouldn’t be the focus.
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BLawyer here based in Delhi. Initiating a complaint case would be a better way out than a civil case if you seek a refund. If you seek specific performance of the contract, file a civil suit but only if you have a solid correspondence on WhatsApp or in any other recorded forms. If you have call recordings, that would work too. Because I’ve seen a lot of cases for specific performance fall up during the stage of evidence. Secondly, realise if the lawyer’s expense was worth letting go or not because if you’re still able to get a refund without the expense, take it.
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UCould you expand on the complaint case part? Like a police report?
And in regards to evidence we have corresponded over whatsapp and have the following:
1. record of him agreeing to the deal and the price. Also messages of us explaining the payment terms and him agreeing to it2. Records of bank transfer of the earnest money to him (also mentioned the ‘Token money for *** property sale’ in the remarks column of the NEFT)
3. records of and copies of the documents he sent us for preparing sale agreement (Property paper, building share certificate, Power of Attorney, PAN and Adhaar)
4. receipt of payment to lawyer for sale agreement
5. Loan Sanction letter from bank that we obtained by submitting document of the said property
6. Records of him asking us for help with figuring out his tax liability, and help with setting up a Capital Gains Saving Amount for amount received from property sale
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BAlways sign a MOU – Memorandum of understanding for the sale, before handing over any token money.
Also get photo copies of Society Share Certificate, previous chain of agreement deeds between all previous buyers -sellers, OC photocopy, stamp duty and registration paid for previous deal photocopy.
Do it in the presence of your broker or Real estate agents and his broker too.
Never depend on any verbal communication, WhatsApp chats, text message, emails etc – use that as secondary evidence. MoU is first!
Only with the MOU go to the bank for loan processing and lawyers for drafting a sales deed!
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CCut your losses and move on. All this has to be discussed prior to the deal. TDS is very important these days
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UAnother question – Was the intention to purchase the property published in any newspaper? If yes, then serve with a legal notice and follow it up with specific performance. That way, that property won’t be purchased by any genuine buyer until your claims are settled. The deal seems to have fallen through only because of the TDS required to be deducted, which should be called out while doing this. This is another way to build the pressure on the person to give back money + expenses to cover the inconvenience, or approximately 2x as mentioned in other comments.
Again, depends on your mood to deal with the legal stuff, cause this will add up the expenses.
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UNo it wasn’t published in the newspaper
And the TDS component was also discussed beforehand.
It was only while the deal was in the advanced stages, that he started to pressure us to not deposit TDS and instead give him that amount in cash. When we declined he cancelled the deal and later on stopped replying to us. -
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PCurious – “Was the intention to purchase the property published in any newspaper?”
When does this happen? I have never done this before. Just for context, I do multiple real estate transactions (resale) in Maharashtra and Karnataka. But never did this before.
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UHey, we also work in similar states and this is more of precautionary measure for clear titles. What we do is put a public notice in national and local papers, saying that we are purchasing so and so property, if anyone has an issue, reach out within these many days. Later on, it becomes easier to prove that you took all steps to ensure clear title.
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POk. But what if someone with ill intent claims the title and delays the deal? With freeloaders increasing in this country, I am just curious how this can be a pain than a helpful thing. Sorry, not questioning your way but trying to understand so can easily adopt it going forward.
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UThat’s where the buyer will step in. If he really wants to sell, there are ways to have it sorted. If it gets dragged on for too long, you have saved yourself a headache later. That’s just our take on his.
With land deals, we are always prepared for such fallouts, so you take this as part of the process.
Also, nothing to apologise yaa, all of us live and learn, so best to ask and discuss!
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PGuys, do you really want to be pennywise pound foolish? Please take back your token and end the matter. To recover lawyer fees you will end up spending a lot of your time and energy which you are not considering as it’s not in money terms. But time is money.
Cut your losses and move on to something else.-
UHe is not willing to return our money anymore, nor is he replying to us. Instead he threatened us with harassment
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POh. I misread that he wants to return the money.
Was any agreement to sale done while the papers were being checked?
Do you know his address in the country where he is based at? Do you have his passport or any other details? If yes, please send a notice to the embassy via the lawyers. Also, you need to file a cheating case against him in the police station.-
UNo, agreement to sale wasnt done. But other formalities like loan sanction were. He backed out of the deal the day we paid the lawyer for the same
I do not have a copy of his passport but have other documents. I also do not have his foreign address, except for the city and state he lives in.
I have his indian ID and other indian addresses of his.-
PYou have missed a few critical steps so this will be a bit hard.
First file a police complaint of cheating. Send a picture of the same to the seller with clear details of why the money was paid and why he backed out. Then he owes the refund in full as he baked out. You mention you have initiated process of fraud and you will be reporting the same to the immigration dept of his residing country. Draft the message professionally. See, how he reacts to that. If he still doesn’t budge, contact Indian embassy and immigration dept of his residing country. Let the show begin then. If you don’t mind sharing, how much is the approx amount invovled?-
UThank you for the guidance. Really appreciate it.
Approx 1.2L is the total loss we have faced, that includes the token, lawyer, CA, bank charges
And no broker is involved in this deal
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POk. Thankfully not a huge amount (considering the overall deal value).
Once again, be mentally be prepared to let go. The time and energy you will spend in courts and police will be more. Stress and sleepless night are not worth it. You will make the money back someday. But at the same time make sure the seller himself has a few sleepless nights.Be positive and focus on buying a new home with positive vibes. Whenever I encounter financial losses of such stupid uncontrolled scenarios, I say maybe someone needed it more than I did and let go. Learnt it the hard way and trust me came with time. Even now, no matter how careful I am, I end up loosing some money. But learnt to not fret over it too much.
So, choose wisely.-
UThank you for the sanity check.
Honestly I have been swinging back and forth between pursuing this or letting it go.
I was/am willing to let it go as a bad luck tax but at the same time the seller’s behavior towards me and my dad was extremely rude and uncalled for. This was despite us offering above mkt, and also helping him out w his due diligence through out the process, so that the deal can be transparent and smooth for both parties. Post that it was constant harassment by him, not picking up our calls, the TDS issue etc
Infact when he agreed to the deal, there was another property we were considering that we let go. So the opportunity cost also factors in.
Dealing with him has been a complete nightmare
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BJust tell him you are going to contact the Indian Income Tax Department, about him wanting to do transaction in black. He will get a IT notice and his property will be blaclisted.
NRI seller – TDS is usually around 20% – not even regular 1% TDS for resident seller. So make sure you cut 20% and handover to the government.
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