What really is the Bayana agreement?
The term “Bayana” refers to a verbal agreement between a buyer and a seller. Token money is known as ‘Bayana’ in various places of India.
The advance money provided by the buyer to the seller to formalize the contract is known as token money, earnest money deposit, or Bayana. We’ll talk about it in this article:
The selling agreement between the buyer and the seller is known as a “Bayana Agreement” or “Token Money Agreement.” This contract documents the buyer’s interest in the property and his pledge to purchase it once the legal requirements are completed. An advance is provided to the seller to freeze the sale before it is finalised.
This sum is usually a percentage of the overall cost of the property (agreed upon by both parties). Various legal processes and paperwork are involved during the operation.
What exactly is the Bayana Agreement?
The Bayana agreement, like any other contract, serves as a template for the purchase of the home in the future. The sum of funds paid by the consumer to the seller is mentioned in the paperwork. Also, once signed and paid, the seller is no longer free to hunt for other bidders. The Bayana Agreement is governed by the Indian Contract Act of 1872, and it binds both parties to the terms of the agreement.
There are several different types of Bayana agreements
Purchasing and selling a home is time-consuming due to the numerous legalities required. Among such legalities, there are many Bayana Agreements via which a buyer or seller can complete a transaction. The two types of Bayana Agreements are as follows:
Conditional Bayana Agreement
As long as both the buyer and seller reach an agreement, the seller receives 1% of the overall price of the property. This is performed to receive the seller’s property paperwork so that the purchaser may double-check the information. If the customer cancels the order, the seller is responsible for returning the money to the buyer. There are no fines because this is not legal documentation.
Confirmed Bayana Agreement
The property paperwork has been cross-verified by both the buyer and the seller at this point. Both the seller and the buyer sign a document outlining how the payment will be made in order for the property to be registered. This contract specifies when the property will be recorded in the buyer’s name. The buyer pays the seller 20-30% of the total deal value as part of the agreement. Because once registration procedure is completed, the remaining balance is collected.
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