Sale to tenant

I own a flat in Badlapur Maharashtra which is on rent under a registered leave and license agreement renewed every 11 months. I have had the same tenant since almost 3 years. Rent has always been paid by online transfer and as per leave and license terms. He has now approached me to purchase the property and paid a token amount. He has applied for bank loan.

As he is already living in property, is there any point I have to consider during the sale transaction. He already has possession living in the flat as Licensee so what caution should I take during the sale agreement? Should sale agreement or sale deed state that he is already living in property as only Licensee and not owner till full payment is completed? As he is buyer he is engaging lawyer and bearing expenses like legal documentation etc. Is there any clause that I should ensure his agent includes in the agreement to protect my interest? His lawyer said that there is no need to include Leave and license details in the Sale agreement as that is a separate matter. Is that correct?

However my concern is if the bank loan does not succeed then the buyer can stay for a long period in my flat and claim that I have given consent after taking token amount.

Asked 4 years ago in Property Law

Religion: Hindu

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10 Answers

1. Ordinarily there is no need to mention the said leave and license agreement but there is no harm also in mentioning the same.

2. Your sale agreement should mention the clause of advance token payment and the term that the said advance amount will be forfeited if he fails to pay the remaining consideration within the specified time and thereafter the said agreement will be considered as cancelled.

3. To be at the safer side, you can mention about his present leave & licensee status, forfeiture clause and also that if the agreement is cancelled, he will either vacate the premises or continue to stay as your leave and licensee.

Krishna Kishore Ganguly

Advocate, Kolkata

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The buyer's lawyer is correct

If the sale does not materializes, you have the remedy to evict him unless he files any specific performance suit against you if the sale agreement is terminated by you without any just cause

Yusuf Rampurawala

Advocate, Mumbai

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It can mention he is residing in premises as licencee at present

don’t agree to suggestions given by his lawyer

Ajay Sethi

Advocate, Mumbai

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The leave and license agreement is different to that of the sale agreement.

He is possessing the property in the capacity of a licensee and not as a buyer, hence his lawyer is right in opining that there should not be any mention about the leave and license in the sale agreement.

If the person cannot buy the property subsequent to the sale agreement then the sale agreement can be cancelled.

He may be asked to vacate the premise on termination of the current leave and license agreement if the same is not renewed for another term.

T Kalaiselvan

Advocate, Vellore

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You are only liable if you are interested otherwise you have all the right to refuse

Prashant Nayak

Advocate, Mumbai

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At what stage do I need to handover my original purchase agreement to the lending bank?

Asked 4 years ago

For disbursal of loan original sale deed is required to be in bank possession

Ajay Sethi

Advocate, Mumbai

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upon payment of full consideration

however many stupid banks require the seller to handover the original prior to being paid the full consideration

however you will have to be adamant

Yusuf Rampurawala

Advocate, Mumbai

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The original sale agreement can be submitted to the bank directly by you if the bank is demanding the same for sanctioning the loan, however the original sale agreement should be in the possession of the buyer and not with the seller.

T Kalaiselvan

Advocate, Vellore

86915 Answers

2331 Consultations