• Indemnity clause in a sale deed of resale property

I am planning to purchase a resale property and my SELLER has asked me to remove the following point from the sale deed, Is it safe to remove this point? What are the future implications? Can we rephrase this point to safeguard both SELLER and BUYER interests?

Point Removed: That the VENDORS hereby undertakes to sufficiently indemnify and fully compensate the PURCHASERS and the PURCHASERS’s successors against all losses, damages that may be constrained to be suffered in future on account of breach of any covenants contained herein.
 
Seller's reason: "This clause makes us liable for any future issues with respect to this property and it doesn’t seem logical for us to take this liability. We have already confirmed that the title is clean and the same has been checked by your lawyer. Please check with your lawyer. Based on our understanding VENDORs should take this clause if they purchase a land and build their own independent house and then sell.
Asked 4 years ago in Property Law
Religion: Hindu

First answer received in 10 minutes.

Lawyers are available now to answer your questions.

8 Answers

Indemnity clause is necessary to protect your interests 

 

iit indemnifies buyer against any legal defect in title you can change wordings of the clause as follows 

 

The VENDOR hereby agrees and undertakes to indemnify and save the PURCHASER harmless in the event of any defect in the title of the schedule property or any claims put forth either by the VENDOR herself, or his legal heirs, representatives, successors or anybody, claiming any right, title, under or in trust for the VENDOR and also to reimburse all such cost and expenses of litigation or in the event the schedule property or any portion thereof is lost to the PURCHASER as a result of defective title or breach of covenants by the VENDOR"

Ajay Sethi
Advocate, Mumbai
96938 Answers
7822 Consultations

1. AFTER date of Registration of Sale Deed of Property, legally the Seller has no liability, whatsoever, more so specifically since the Purchaser buys the Property on "as it is where it is" condition, without any future reference to the Seller.

2. Purchaser may take into custody ALL the ORIGINAL chain of earlier agreements, ensure that the property is not mortgaged or has a stay /restraining order by any court or authority, etc....

Keep Smiling .... Hemant Agarwal
VISIT: www.chshelpforum.com

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

even if this clause is removed, nothing stops the purchaser from filing a suit against the vendors if there is any misrepresentation or defect in title or any concealment by him due to which the purchasers suffer any loss or damage or injury

so in my view removing this clause will not take away the right of the purchaser in any way from filing a suit against the vendor in future should the need arise 

Yusuf Rampurawala
Advocate, Mumbai
7679 Answers
79 Consultations

Hi, The above clause are normal in the every Sale Deed. Better you must keep the above clause in the Sale Deed.

Pradeep Bharathipura
Advocate, Bangalore
5611 Answers
338 Consultations

There is no necessity to remove this indemnity clause.

In fact it is legally essential clause so that the vendor cannot escape the liability in case of any legal issue or breach of any covenant arises at a later stage which escaped the sight of the vendor or the buyer at the time of buying the property.

Even though due diligence has been exercised there can arise a circumstance in future due to which the buyer will suffer the loss due to litigation and the vendor will go Scot free whereas the problem would be from the vendor side. 

There is no necessity  to compromise with the vendor on this, if he is not willing to sign the document with the said clause included in it, you may think about buying the property once again. 

Did you refer the matter to your lawyer and obtain his opinion on this as well as proper legal opinion on the relevant documents in respect of this property. 

T Kalaiselvan
Advocate, Vellore
87138 Answers
2339 Consultations

Do not remove indemnity clause at all and at any cost. If the property is free from all encumbrance then seller shouldn't be worried about this indemnity clause.

 

The indemnity clause will benefit to you means buyer.

Ganesh Kadam
Advocate, Pune
12987 Answers
262 Consultations

1. Unless your seller has something mischievous on his mind, I see no reason why he would want this indemnity clause to be removed from agreement to sale/sale deed.

2. Indemnity clause is incorporated in every ATS/Sale deed as a matter of abundant caution.

 

Ashish Davessar
Advocate, Jaipur
30776 Answers
972 Consultations

This is very important clause and need to be present as if the property is of defective title and fraudulently sold then the interest of buyer is protected. It has no importance for seller. 

Prashant Nayak
Advocate, Mumbai
32479 Answers
201 Consultations

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer