What is Bayana in Real Estate?

Kishan Thakkar K

If you’re planning to buy a property, there are many steps involved in the process. If you like a property and decide to buy it, both the buyer and seller will come to an agreement.

The process of registering a property includes entering into a sale agreement or agreement of sale with the landlord. The buyer pays an advance amount called the Bayana to the landlord.

What is Bayana?

As a general rule, Bayana refers to the upfront payment that the buyer has already made to show his seriousness in purchasing the property.

Buyers pay token money, or a percentage of the deal amount, to sellers in good faith.

What is Bayana agreement?

Bayana agreement, or agreement to sell, is a document used as a blueprint for a future sale. It describes, among other things, the payments that have been made to the seller so far, so that the seller will not entertain any other buyer, and it also ensures that the property is booked in the buyer’s name. 

A Bayana agreement is legally binding on both parties under the Indian Contract Act, 1872. Once the Bayana has been taken by a seller and a Bayana agreement has been signed between two parties, both parties are required to abide by the terms and conditions of the agreement.

Is Bayana a legal document?

In the event of any disputes between the contracting parties, the Bayana agreement can be admissible as proof in a court of law under the Indian Contract Act, 1872.

In Summary

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