In a property sale, the seller’s primary objective is to receive valuable consideration for his property. Consequently, the seller’s lawyer is required to ensure that the terms of payment are clearly set out in the agreement. However, there are several preceding steps required to be undertaken by a seller’s lawyer to ensure the completion of sale and receipt of consideration by the seller.
1. Providing copies of title documents and inspection of originals
Under law, the onus is on a purchaser to carry out searches at the offices of the Sub-Registrar and other relevant authorities to satisfy himself about the title of the seller prior to purchase. However, a seller/seller’s advocate is required to furnish copies of all title documents and other relevant documents in his possession which usually becomes the starting point of the due diligence undertaken by the purchaser/purchaser’s advocate. The seller’s advocate is also required to give inspection of the original title documents if requested for by the purchaser/purchaser’s advocate.
2. Familiarity with seller’s chain of title
A seller’s advocate must be familiar with the seller’s chain of title and title documents in order to satisfactorily address any queries, irregularities and/or deficiencies pointed out by the purchaser/purchaser’s advocate.
In the event that there are certain irregularities or deficiencies in the title chain, the seller’s advocate must endeavour to resolve the same by offering to provide necessary representations, warranties, indemnities, permitting issuance of public notices, etc. as may be required. This becomes imperative because a sale transaction may fall through if the purchaser is not satisfied with the seller’s title.
3. Providing access to documents and information that the purchaser may not have access to
Under law, the onus is on a purchaser to undertake due diligence and satisfy himself about the title of the seller prior to purchase. However, all documents relating to the property may not be in the public domain or accessible to the purchaser. In such event, if there is a specific requisition from the purchaser/purchaser’s advocate, the seller’s advocate must be in a position to furnish such documents and information.
4. Protecting the seller from providing excessive representations, warranties and indemnities
In addition to the minimum representations and warranties required under law, the seller may agree to provide certain additional representations, warranties and indemnities as may be required in respect of his specific property. However, it is the seller’s advocate’s obligation to ensure that the seller is not providing excessive representations, warranties and indemnities and is not taking on more liability than required.
5. Payment and terms of payment
The sale consideration is usually negotiated and decided by and between the seller, buyer and their brokers, if any. However, a seller’s advocate must ensure that the time period for payment and the manner in which the payment will be made are clearly provided for in the agreement. The agreement should also state the applicable taxes and the manner in which such taxes will be paid to avoid any claims from tax authorities on either party.
A seller’s lawyer’s role includes negotiating various clauses, providing title documents and other related information, addressing and resolving title related concerns raised by the purchaser and finalizing the agreement that results in the completion of sale.
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Thanks for the info.