Agreement for Sale of Mortgaged House (India) by OLL
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Agreement for Sale of Mortgaged House
THIS AGREEMENT
made at ……………………. on this ……………. day of ………………., 20,
between
A, son of ………………….
resident of ………………….
(hereinafter called the vendor) of the FIRST PART,
B, son of…………………..
resident of ……………………………
(hereinafter called the purchaser) of the SECOND PART and
C son of …………………
resident of…………………………………
(hereinafter called the mortgagee) of the THIRD PART.
WHEREAS the vendor is absolutely seized and possessed of or well and sufficiently entitled to the house more fully described in the Schedule hereunder written, hereinafter referred to as the “said house”;
AND WHEREAS the said house is mortgaged with Shri …………….. for the sum of Rs. …………………. pursuant to a deed of mortgage executed between the vendor and Shri ……………………….. on the other part and a sum of Rs. ………………….. is due from the vendor to the said mortgagee.
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AND WHEREAS the vendor has agreed to sell and purchaser has agreed to purchase the said house an the terms and conditions mentioned below:
IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:
(1) The vendor will sell and the purchaser will purchase all that house No. ……………….. Road …………… more particularly described in the Schedule hereunder written for a sum of Rs. …………… out of which the purchaser has paid Rs. …………….. to the vendor as earnest money (the receipt of which sum, the vendor hereby acknowledges) and out of balance price to be paid by the purchaser, he shall pay Rs . ……………… on or before the date of ……………………. and the remaining sum of Rs. ……………… will be paid to the vendor at the time of registration of the sale deed.
(2) The mortgagee’s advocate shall deliver the documents of title of the said house to the purchaser’s advocate against his accountable receipt within ……………… days from the date of this agreement for investigation of title.
It is hereby declared that delivering the documents of title by the mortgagee to the purchaser’s advocate will not affect the mortgage of the mortgagee and mortgage on the said house will continue until the full payment of the mortgage money is made to the mortgagee by the vendor or the purchaser.
(3). The said house will be purchased by the purchaser without any encumbrance, easements, restrictions and rights affecting the same.
(4) The purchase shall be completed within a period of ………….. months from the date of this Agreement. The purchaser shall send the draft conveyance deed to the vendor a fortnight prior to the date of the intended execution and after approval thereof by the vendor, the purchaser shall get the same ready for execution by the vendor. All expenses for preparation of the conveyance deed, cost of stamp and registration charges and all other out of pocket expenses shall be borne by the purchaser.
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This is a legal template for the sale of a residential property that is currently under mortgage in India. It facilitates a three-party transaction between a seller, a buyer, and a mortgagee (the lender) to ensure the mortgage is discharged upon payment and the title is transferred cleanly.
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About this template
What is this template?
This is a tripartite sale agreement involving the homeowner, the buyer, and the existing lender. It is not a standard sale deed but a preliminary agreement that coordinates the discharge of a debt with the transfer of property. It contains specific provisions for the Mortgagee to release title documents for inspection before they are paid off.
When should you use it?
Use this when the property being sold is currently collateral for a loan and the lender must be a party to the contract to guarantee a clear title. Use a standard 'Agreement for Sale' instead if the property is already free from all encumbrances and debts.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Consideration and Payment | Specifies the total purchase price and the breakdown of payments across earnest money, an interim installment, and the final balance at registration. |
| 2 | Investigation of Title | Requires the Mortgagee's advocate to deliver title documents to the Purchaser's advocate for review while maintaining the mortgage's validity until full payment. |
| 4 | Completion Period | Sets a deadline in months for completion and requires the Purchaser to provide a draft conveyance deed 14 days before execution. |
| 5 | Discharge of Mortgage | Prohibits the execution of the sale deed until the Mortgagee has received payment and formally discharged the mortgage on the original deed. |
| 6 | Refund of Earnest Money | Obliges the Vendor to return earnest money with monthly interest if the Purchaser's advocate does not approve the title. |
| 11 | Tax and Statutory Clearances | Mandates the Vendor to obtain a certificate under section 230A of the Income-tax Act and necessary municipal permissions at their own cost. |
Who it's for
- a homeowner in India selling a property that still has an active bank or private mortgage
- a buyer acquiring property where the purchase funds must first clear the seller's existing debt
- a lender or mortgagee participating in a sale to ensure direct repayment of the loan amount
How long it runs and how it's signed
Law it's drafted under
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