logo logo

What is the difference between ‘Earnest Money’ and ‘Advance’ in Agreement to Sell?

- by Radhakrishna, Mysore

The seller can forfeit the ‘earnest money’ if the purchaser defaults in completing the sale. Whereas, the ‘advance money’ cannot be forfeited even if the purchaser defaults in completing the sale. The earnest money stands as the purchaser’s guarantee for his performance of the contract. The advance cannot be treated as guarantee for completion of contract. 

image

These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.

QUESTIONS

Q:- What is the difference between ‘Earnest Money’ and ‘Advance’ in Agreement to Sell?

Q:- What is meant by Defect Liability period in  a construction agreement?

Q:- I have taken some land on lease for 99 years and had con¬structed a multistoried building. The lease deed contains a clause. "Cannot assign, Underlet or sublet or part with the possession of the demised property without the previous permission of the lessor". The lease deed provided for construction of building, I have given portions of the building on leave and license to various busi¬nessmen. The lessor has issued a notice demanding subletting charges from me and has also marked the copies to licensees demanding to pay the subletting charges. What is the remedy? Can the lessor institute legal action against me and other licenses?

Q:- In connection with the purchase of a plot in a township on Mysore Road, I have paid major portion of the sale consideration to the developer. But the developer has not completed even half of the work and the progress work is unduly slow for various personal reasons of the builder. I have lost interest in the plot because of this. Please advise me how to get back my money with interest from the builder?

Q:- My wife and my children have thrown me out of the house because of some difference of opinion. I purchased a site and constructed a house there on out of my own funds and presently, they are enjoying this property. Can I Sell this house in occupation of my wife and children? Will they claim their share in the property?