This article is written by our guest author, Srishti Kumar, Associate, Dehadrai & Co.
Who are real estate attorneys?
Real Estate attorneys are lawyers who specialize in matters relating to property – transactions as well as disputes. A real estate attorney prepares and reviews documents relating to real estates such as purchase agreements, mortgage documents, title documents and transfer documents.
What sets apart a good real estate attorney?
The secret to being a good real estate attorney is precise and unambiguous contract drafting that avoids unnecessary litigation. The ultimate aim of a good real estate attorney is to reduce disputes arising out of unclear and unambiguous contract terms.
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Real estate attorneys have to deal with disputes also in later years, but at the beginning, it is your drafting that set you apart as a competent real estate lawyer. So let’s take a look at the most important real estate agreements:
- Real Estate Purchase Contracts or Sale Deeds
A real estate purchase contract or a sale deed is a bilateral agreement between two or more parties by which the sale of a property takes place. Chapter III of the Transfer of Property Act deals with the sale of an immovable property. Under the Act, it is mandatory that all agreements are in writing and registered with the Registrar of Assurances.
- Agreement to Sell
An agreement to sell precedes a sale deed. It is a bilateral contract wherein the seller agrees to transfer goods to the buyer for a consideration at a later date or after fulfilment of a condition. An agreement to sell is recognized under the Transfer of Property Act.
It is advisable to have an agreement to sell in writing and registered. A party can take benefit of S. 53A of the Transfer of Property Act only if the agreement to sell is in writing and registered.
- Builder Buyer Agreement
A variant of a sale deed is a builder buyer agreement. It is an immensely important document as it is the legal contract between the builder and the buyer. In case you need a legal recourse, this is the agreement that will help you in Court – therefore it is of utmost importance that one should read and understand their builder- buyer agreement. Your real estate attorneys will also help you review any builder- buyer agreement to see if the terms can jeopardise your rights as a buyer and advise you accordingly.
- Mortgage Deeds
The Transfer of Property Act defines Mortgage as the transfer of an interest in a specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
A mortgage deed is a document in which the mortgagor transfers an interest in real estate to a mortgagee for the purpose of providing a mortgage loan.
- 58 of the Transfer of Property Act lays down the different types of mortgages as –
- Simple Mortgage
- Mortgage by Conditional Sale
iii. Usufructuary Mortgage
- English Mortgage
- Equitable Mortgage
- Anomalous Mortgage
Depending upon your situation and need, your real estate attorney will guide you as to which mortgage suits your needs the best.
- Lease Deeds
- 105 of Chapter V of the Transfer of Property Act defines Lease as :
A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specific occasions to the transferor by the transferee, who accepts the transfer on such terms.
Simply put, a lease is a transfer of possession by the lessor for a consideration for a certain amount of time to the lessee while the ownership remains with the lessor.
Not only property but vehicles, industrial and business equipment are also leased.
- Leave and Licence Deeds
Another interesting agreement is that of leave and licence. Conferred recognition in the Indian Easements Act, 1882 this agreement is now widely used for residential agreements.
The Leave and Licence Agreement is a safer option for homeowners giving out their property for residential or other purposes as the physical possession of the property also remains with the licensor and the licensee is only given a temporary licence to use and occupy the premises.
Your real estate attorney can explain you better as to which agreement is best suited for you.
- Relinquishment Deeds
A relinquishment deed is a legal document by which a person formally gives up his claim to another person, the said deed must be systematically executed and registered as per Section 17 of the Registration Act, 1908.
A relinquishment deed is irrevocable even if it is made without any consideration. For a valid relinquishment, it has to be in favour of the co-owner and not any other person.
- Buyers’ Broker Agreements
Another interesting agreement, widely used abroad is buyers’ broker agreement. This agreement is entered into by the buyer with his real estate agent and outlines the rights and obligations of the real estate agent as well as the buyer.
- Joint Venture Agreements
A JV Agreement is a contract between two or more parties outlining each party’s roles and obligations. It also outlines, how decisions will be made, how profits/losses are to be shared, and other venture-specific terms.
A joint venture agreement is typically used by companies or individuals (like real estate investors) who are entering into a one time project, investment, or business opportunity.
- Power of Attorney
A power of attorney is an instrument that is used by people to confer authority on somebody else to legally act on their behalf. A power of attorney may cover any or all aspects of property and asset management, money matters etc.
A power of attorney can be classified as general or special, depending on the authority given to the attorney by the principal.
Powers of attorneys are significant especially in the real estate sector because it is not practically possible owing to geographic restrictions and busy schedules, to be present for the legal formalities and compliances, and delays can be extremely costly.
Granting a power of attorney gives power to another person to act as one’s legal representative. Ideally, a special power of attorney is advisable in real estate matters since the powers granted under this are specific and limited. However, a real estate attorney can best advise you as to which power of attorney is best suited for you.
LawSikho’s Executive Certificate Course in Real Estate Laws covers drafting of the variety of real estate agreements in detail along with developing the knowledge base on topics like consumer disputes, registration of new projects under RERA, benami property-related cases, housing society disputes, property disputes and litigation and more!
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