Probably the most technical aspect of striking a deal is inking the agreement copy.
If you’ve hired an agent, chances are the agreement copy is ready with him. Chances are, the agreement copy largely benefits the seller, not the buyer. Be very careful when reading the agreement. At least two careful readings are a must.
At the outset, let me say clearly that an agreement copy is a document containing matter that BOTH parties mutually agree upon. A good agreement copy will seek to protect both parties, especially if it is a licensor-licensee agreement. Ask for an email or copy of the agreement and sit with a pencil to mark out points you do not agree upon and which will need revision. Do not let the agreement go into final print unless you agree on every point. There is no space for ambiguity in an agreement. What is meant must be stated in writing, not committed verbally.
Also, some people do not make an agreement at all if they know the licensor/ seller. Bad mistake. You are putting yourself up for fraud, at the very least, and if the home owner decides to sell to someone else after striking a deal with you, you will have nothing to help you claim the money you may have already paid. So be wise, get an agreement made and signed by both parties.
Another important thing to do is to get the agreement put down on a Rs 100 stamp paper or get the document franked from a bank that offers the service. The cost for the latter would be Rs 760 (Rs 750 stamp paper + Rs 10 service charge by the bank). Ensure that the agreement has not been put down on blank sheets, it must be on stamp paper.
After this, insist on registering the document. Some people are reluctant to get the document registered because a) It costs some money and b) There is a four-month time period from the date of signing the agreement, so there is a temptation to procrastinate. Do not go by this route, get the document registered. A registered document ensures that you can avoid any legal hassles in case the other side decides to get clever, also many building societies insist on a registered document before granting a final NOC to you. The cost for the process is to be borne equally by both parties.
The Agreement itself:
- Look for any unnamed/ unexplained elements, especially if you’re renting the place. If there are mentions of licence fees being deducted and dues being subtracted from the security deposit anywhere in the agreement, study these carefully. Normally, any deductions will happen only if you damage the flat during the period of your stay, or make any alterations without permissions and so on. Deductions might also happen if you fail to pay the monthly outgoing on electricity, gas and cable connections before leaving.
- If the licensor expects you to forfeit rent amount, deposit money or anything else in case you terminate the agreement prematurely, tell them to fuck off. For your part, you are expected to give a one-month notice in writing informing the other side of your intention to leave, and with the guarantee that you will settle all bills before you go. If there is any demand for deductions over and above this, the licensor is free to take a walk.
- Normally, a licensor would like to have a window period of six months before the agreement is terminated by you. He/she might be worried about not finding another licensee quickly, but try and work around this. Ideally, if you’re giving a notice, there should be no window period.
- Clearly state, if you are renting, that the cheque for the deposit money is to be handed to you at the same time that you hand over the house keys on the last day of your stay. Allow the licensor a thorough inspection of the house but do not agree to promises that the cheque will come later. Agree to not hand over possession till the cheque is handed over.
- Some licensors have an issue with you putting your own locks on the doors. Be very firm about putting your own lock for your safety, and do not change the existing locks without permission. Some licensors insist on a duplicate key to the detachable locks you fit after moving in; tell them to sit on the building terrace and think about their lives. Also put the fear of burglary in their minds – tell them clearly that you will be compelled to name them as a suspect in case anything is stolen from the house.
- Clearly mention that while the owner has the right to inspect the property from time to time, the same cannot interfere with your right of peaceful possession. Discourage any attempts at surprise visits.
- There are cases when the licensor may leave extra furniture lying around and expect you to be okay with it. See if you can use the furniture. If you can’t, ask them to move the same or else agree to pack it and keep safely. It is not binding on you to live with such items as religious artifacts, furniture items, curtains and similar simply because the owner/ licensor cannot be arsed to take them away. Any items left behind by the seller/ licensor must be clearly stated in the schedule for fitting, fixtures and other items. This list must be checked and signed by you.
- Ideally, the broker must not expect to get paid for his services before the entire deal is sealed.
- If you’re purchasing and if the owner still has an unpaid loan amount pending, agree to transfer the amount to your name via the bank. Put the same down in the agreement clearly.
- The agreement must clearly mention your name and residential details, as well as the owner’s/ licensor’s, on the first page of the document.
- While signing, you might have to carry the following with you: passport size pics, photo ID, identification used at the workplace and similar. These are used in police verification processes.
- If there is a power of attorney angle to the deal, carefully study the POA document. The same should be notarised and registered. If the POA is going to execute the agreement with you, the document cannot be registered unless the POA deed is registered first.
- Once the agreement is signed, first take a photocopy for yourself and insist on a true copy being given to you within two days. Proceed for registration in the meantime.
- Be wary of demands for bearer cheques. Insist on a receipt if you do agree to such a request, but try and maintain all payments via account payee cheques only. A bearer cheque does not leave a trail. All receipts are to be given the moment cheques are handed over, not later.
- Clearly state that all construction and maintenance expenses are to be borne by the licensor.
Do write in if you have tips/ suggestions on what constitutes a good agreement. And if you decide to do it on your own, right from inking the copy to registering it, it’s easy and costs less, though it will take some time.