Home Purchase Agreement

It can take many years to buy a home. After exhaustive bargaining, when you seal the deal, make sure to go through all the essential documents before signing on the dotted line.

We recomened the different kinds of factors which you should examine carefully before signing a property agreement.

A property agreement is a mutual contract from the buyer between the seller of a piece of property to go ahead with the negotiation deal according to the specified terms and conditions.

The property agreement could either be between the seller and buyer or between the lesser and lessee.

Important points to know before signing a Home purchase agreement.

There maybe specific points that may be missed in a hurry, which is why care must be taken to make sure that it is properly understood before it is signed.

Here are the 5 important aspects you need to take consider before you enter into a home purchase agreement with a developer.

1. Genuine Price of the House

A home purchase agreement provides details about the various costs that you will need to bear before you purchase a house. This would involve the cost for utilities like electricity, water, parking space, many other kinds of taxes, and in some cases even charges for registration.

2. Actual size of the House

The size of the house will be clearly mentioned in the home purchase agreement. The clause would be stating designs, plans and specifications which are tentative and developer has the right to modify. You may agree for a certain size but the developer may agree for another size.

3. Date of Possession

The agreement includes a tentative date of possession which can get extended.

4. Completion Certificate

The builder needs to provide a completion certificate before handing over the house to you. This is issued by municipal authorities and should comply with the building plan. This certificate is needed for the registration of your house and other government formalities. Make sure that you procure this completion certificate before signing on the home purchase agreement.

5. Carpet Area

The area of an apartment or building minus the area of the walls is known as the Carpet Area. This is the area where a carpet can be laid in the house. The built-up area is the area of walls, including the balcony which is calculated with the Carpet Area. The built-up area which includes areas under the common spaces like lobby, lifts, stairs, garden and swimming pool is called Super Built-Up Area.

Carpet area is 15-30 per cent less than super built-up area. The exact size cannot be known until the property has been built.

Bonus Tips : Important points to know before signing a lease agreement.

The lease agreement gives lessers and lesses with a legally enforceable contract and it’s essential that this document has the necessary elements to provide protection to both the renter and landlord. A good lease agreement defends your interests and avoids misunderstandings that could land you in litigation.

Here are the essential terms and conditions that should be in every lease agreement:

1. Parties to the Lease – the lease agreement should include the names of the landlords and tenants who are bound by the terms in the agreement.

2. Terms of rent – The rent amount in rupees should be in the agreement as well as due date of the rent, which place should the rent be sent to and how it will be accepted (by draft, check etc). The terms for late rent should also be included in the agreement.

3. Description of the Property – the lease agreement should include the essential description of the property. It can be the address and apartment number but it must be given identification else the agreement cannot be enforced.
4. Security Deposit Details – The amount of security deposit, how it will be paid and the terms and condition as to how it will be released in the future should be included in the lease agreement.
5. Lease Dates and Termination – The starting and ending of the lease should be in the agreement as well how and when will the landlord and tenant end the lease.
6. Occupants of the Property – The lease agreement should list the name of the persons who will regularly live in the property and what will happen if a person will live for more than the specified length of time.
7. Pet Details – The lease agreement should cover details about whether the tenant can have a pet or not. The information on the number, size and size should be clearly stated. If the tenant has paid an extra amount of money for the pet, the information about it should be included in the lease agreement.
8. Repairs and Damages to the Property- The condition of the property should be included as the well as the tenant and landlord's responsibilities for repairs and any damages that happen to the property. The lease agreement should also describe as top who is responsible for the damages that have been done to the property.
9. Alterations to the Property – The lease agreement should describe as to what if any, alterations are made to the property by the tenant.
10. Right of Entry – The lease would include a clause to allow the landlord to enter the property and inspect it.

Whether you are buying a property or renting it out, it is imperative to include the terms and conditions in a written document which could be a home purchase agreement or lease agreement will keep the contract between the two parties unambiguous and favourable.

Here's an update on Home Purchase Agreements (HPAs) in India (as of April 16, 2024):

➤ Standardization Efforts: The Indian government, recognizing the importance of clear and fair HPAs, is exploring initiatives to establish a standardized model agreement. In addition to protecting buyers and sellers and speeding up the home-buying process, this model agreement would include essential terms and conditions [Economic Times, March 17, 2024].

➤ Focus on Transparency: There's a growing emphasis on ensuring transparency in HPAs. This includes clear disclosures about the property details, title status, payment schedules, and any hidden charges. Recent legal cases have highlighted the importance of meticulous drafting and comprehensive disclosures to avoid disputes [Business Standard, Feb 05, 2024].

➤ Digitalization and E-stamping: The real estate sector is embracing digitalization. States are witnessing an increase in the use of e-stamping, or the electronic payment of stamp duty on real estate transactions. This can improve transparency and speed up the HPA registration process [Financial Express, Jan 20, 2024].

➤ Legal Due Diligence Remains Crucial: While standardization efforts are in progress, it's essential to keep in mind that a model agreement might not cover every situation. Consulting a lawyer to review the HPA and conduct proper legal due diligence remains essential to safeguard your interests as a buyer

➤ Emerging Trends: The HPA landscape is constantly evolving. Here are some emerging trends to keep an eye on:

• Integration with Online Platforms: To further streamline the process, real estate platforms might begin offering standardized HPA templates with electronic signing capabilities.

• Focus on Consumer Protection: Regulatory bodies might introduce stricter guidelines to ensure HPAs are fair and balanced, protecting the rights of home buyers.

• Enhanced Dispute Resolution Mechanisms: It might become more prevalent to use alternative dispute resolution (ADR) procedures like arbitration or mediation to resolve HPA-related disputes rapidly and easily.

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