Buyer wants possession and to develop my land before paying full amount. What are the legal risks?
Title: Kerala - Buyer wants possession and to develop my land before paying full amount. What are the legal risks?
Hi everyone,
I'm selling my ancestral property in Kerala (23 cents).
Transaction details:
- Agreed sale price: ₹1.11 lakh per cent (total approximately ₹25.53 lakh).
- Buyer will pay ₹5 lakh as advance.
- Balance amount will be paid within 8 months.
- The sale deed will be registered only after I receive the full consideration.
I have already provided copies of the title documents (pattayam, title deed, possession certificate, EC, tax receipts, etc.). The buyer has also requested a Relationship Certificate because the property is ancestral and he says SBI requires it for processing his loan.
The issue is that the buyer wants physical possession immediately after paying the ₹5 lakh advance. He says he wants to:
- clear the land,
- cut trees,
- develop the property into plots,
- and possibly construct structures as part of the development.
He says he cannot market or sell the plots without first developing the land.
I have no objection to him cutting the trees, but I'm concerned about permanent development or construction before the sale deed is executed.
My questions are:
- If I give possession under a registered or unregistered Agreement for Sale, but the buyer has paid only ₹5 lakh, what legal risks do I face?
- If the buyer constructs a house, office, compound wall, roads, or other permanent structures before paying the balance, what happens if he later defaults?
- Since the property is still legally in my name until registration, can I legally stop construction if it begins?
- If the buyer defaults after developing the land, what remedies would I realistically have? Would I need to file a civil suit to recover possession?
- Can the buyer create third-party rights or book/sell plots before the property is registered in his name?
- The buyer says he is obtaining an SBI loan. Can SBI create any charge or mortgage over my property before the sale deed is registered, or is that possible only after ownership transfers?
- What clauses should I insist on including in the Agreement for Sale to protect myself if I decide to hand over possession?
I'm willing to sell the property and have no intention of backing out. My concern is only about protecting myself if the buyer gets possession before paying the full sale consideration.
I would especially appreciate responses from advocates or anyone with experience in similar property transactions in Kerala.