Extension Clauses and Grace Periods

Most agreements include an extension clause that allows the buyer a limited grace period—typically 15 to 30 days—to complete the transaction beyond the scheduled closing date. This is subject to:

• Written notice from the buyer requesting the extension
  
• Justified reasons such as delayed financing, approvals, or legal clearances
  
• Possible payment of a nominal extension fee or interest on the remaining balance
  
• Mutual agreement to extend timelines without altering other contractual obligations
  

This provides flexibility while maintaining transactional integrity.

Financial Penalties or Forfeiture

If the buyer fails to close within the permitted timeframe and no extension is agreed, the seller may enforce penalties as per the agreement, such as:

• Forfeiture of advance or earnest money deposit (EMD)
  
• Imposition of interest charges on delayed payments
  
• Enforcement of a liquidated damages clause, typically calculated as a percentage of the transaction value
  
• Right to terminate the agreement and remarket the property
  

These provisions are meant to compensate the seller for lost time and potential opportunity costs.

Legal Remedies and Termination Rights

In cases of material default, the agreement will outline the seller’s right to pursue legal remedies, including:

• Termination of the contract for non-performance
  
• Issuance of a legal notice under the Indian Contract Act, 1872
  
• Retention of amounts paid up to that point as compensation
  
• Seeking specific performance or injunctive relief, if applicable, depending on the stage and jurisdiction
  

These clauses ensure that both parties are legally protected and incentivized to complete the transaction in good faith.