In this article, we will explore the importance of token receipts in Indian real estate transactions, answer frequently asked questions, and provide you with formats of token receipt in different property sales scenario.
In simple words, a token receipt marks a buyer's intent to purchase and a seller's agreement to sell the property. In different regions of India, token receipt is called with different names, like 'Vadapatti Receipt' in Tamil Nadu or 'Bainama' elsewhere. Understanding their role and regional variations is vital for anyone involved in property dealings in India.
Did you know?
The token receipt is known by different names across India. In Tamil Nadu, it's often called 'Vadapatti Receipt.' Depending on the region, you might also hear it referred to as ‘Bainama,’ ‘Bainapatra,’ or ‘Kabala’ in various states and Union Territories.
Table of Contents
Sample Token Receipt Formats
Here are sample token receipt formats tailored to different scenarios. These various formats cater to different payment methods, the involvement of companies, and transactions with multiple buyers or sellers. Always remember that property laws and regulations can vary by location, so it’s wise to consult with a legal expert or real estate professional to ensure your token receipt is tailored to your specific transaction.
Token Receipt for a Transaction Between Two Private Individuals
| This Token Receipt (“Receipt”) is made on this day ____________ (date). BETWEEN: (1) Seller Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns. AND: (2) Buyer Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns. The Seller acknowledges the receipt of INR ____________ (Rupees _________) as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”). The parties hereby agree as follows: 1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________). 2. If the Buyer fails to pay the balance sale consideration and completes the transaction within the agreed time, the Seller shall have the right to forfeit the token money. 3. If the Seller fails to perform his obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation. 4. The Seller commits to fully cooperate during the due diligence process, including providing access to all original documents of the property as required by the Buyer. 5. The Seller acknowledges that any existing loan on the property will be cleared prior to the execution of the Agreement to Sell or by an agreed due date. Specific details regarding the outstanding loan and timeline for clearance will be disclosed to the Buyer. 6. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties. This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original. The parties have executed this receipt as of the date first above written. _________________ Seller Signature _________________ Buyer Signature |
Token Receipt for Cash Payment
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns.
AND:
(2) Buyer Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns.
The Seller acknowledges the receipt of INR ____________ (Rupees _________) in cash as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyer fails to pay the balance sale consideration and completes the transaction within the agreed time, the Seller shall have the right to forfeit the token money.
3. If the Seller fails to perform his obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. The Seller commits to fully cooperate during the due diligence process, including providing access to all original documents pertaining to the property as required by the Buyer.
5. The Seller acknowledges that any existing loan on the property will be cleared prior to the execution of the Agreement to Sell or by an agreed due date. Specific details regarding the outstanding loan and timeline for clearance will be disclosed to the Buyer.
6. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Seller Signature
—
Buyer Signature
Token Receipt for Cheque Payment
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns.
AND:
(2) Buyer Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns.
The Seller acknowledges the receipt of a cheque bearing number ____________, dated ____________, drawn on ____________ Bank, for an amount of INR ____________ (Rupees _________) as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyer fails to pay the balance sale consideration and completes the transaction within the agreed time, the Seller shall have the right to forfeit the token money.
3. If the Seller fails to perform his obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. The Seller commits to fully cooperate during the due diligence process, including providing access to all original documents pertaining to the property as required by the Buyer.
5. The Seller acknowledges that any existing loan on the property will be cleared prior to the execution of the Agreement to Sell or by an agreed due date. Specific details regarding the outstanding loan and timeline for clearance will be disclosed to the Buyer.
6. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Seller Signature
—
Buyer Signature
Token Receipt for Bank Transfer Payment
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns.
AND:
(2) Buyer Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include his heirs, executors, and permitted assigns.
The Seller acknowledges the receipt of INR ____________ (Rupees _________) through a bank transfer, transaction reference number ____________, as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyer fails to pay the balance sale consideration and completes the transaction within the agreed time, the Seller shall have the right to forfeit the token money.
3. If the Seller fails to perform his obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. The Seller commits to fully cooperate during the due diligence process, including providing access to all original documents pertaining to the property as required by the Buyer.
5. The Seller acknowledges that any existing loan on the property will be cleared prior to the execution of the Agreement to Sell or by an agreed due date. Specific details regarding the outstanding loan and timeline for clearance will be disclosed to the Buyer.
6. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Seller Signature
—
Buyer Signature
Token Receipt for a Transaction Between a Company and an Individual (Seller is a Private Limited Company)
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller: XYZ Realty Private Limited, a company registered under the Companies Act, 20XX, having its registered office at ____________, represented herein by its authorized Signatory, Mr./Ms. ____________, (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include its successors and assigns.
AND:
(2) Buyer Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
The Seller acknowledges the receipt of INR ____________ (Rupees _________) through a bank transfer, transaction reference number ____________, as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyer fails to pay the balance sale consideration and completes the transaction within the agreed time, the Seller shall have the right to forfeit the token money.
3. If the Seller fails to perform its obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. The Seller, being a private limited company, undertakes to provide all necessary corporate resolutions and documents as may be required by the Buyer during the due diligence process.
5. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Authorized Signatory on behalf of Seller: XYZ Realty Private Limited
—
Buyer Signature
Token Receipt for a Transaction Between a Company and an Individual
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
AND:
(2) Buyer: ABC Developers Private Limited, a company registered under the Companies Act, 20XX, having its registered office at ____________, represented herein by its authorized Signatory, Mr./Ms. ____________, (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include its successors and assigns.
The Seller acknowledges the receipt of INR ____________ (Rupees _________) through a bank transfer, transaction reference number ____________, as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyer fails to pay the balance sale consideration and completes the transaction within the agreed time, the Seller shall have the right to forfeit the token money.
3. If the Seller fails to perform his/her obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. The Buyer, being a private limited company, undertakes to provide all necessary corporate resolutions and documents as may be required by the Seller during the due diligence process.
5. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Seller Signature
—
Authorized Signatory on behalf of Buyer: ABC Developers Private Limited
Token Receipt for a Transaction Between Two Private Limited
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller: XYZ Realty Private Limited, a company registered under the Companies Act, 20XX, having its registered office at ____________, represented herein by its authorized Signatory, Mr./Ms. ____________, (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include its successors and assigns.
AND:
(2) Buyer: ABC Developers Private Limited, a company registered under the Companies Act, 20XX, having its registered office at ____________, represented herein by its authorized Signatory, Mr./Ms. ____________, (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include its successors and assigns.
The Seller acknowledges the receipt of INR ____________ (Rupees _________) through a bank transfer, transaction reference number ____________, as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyer fails to pay the balance sale consideration and completes the transaction within the agreed time, the Seller shall have the right to forfeit the token money.
3. If the Seller fails to perform his/her obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. Both Buyer and Seller, being private limited companies, undertake to provide all necessary corporate resolutions and documents as may be required during the due diligence process.
5. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Authorized Signatory on behalf of Seller: XYZ Realty Private Limited
—
Authorized Signatory on behalf of Buyer: ABC Developers Private Limited
Token Receipt for a Transaction Involving Multiple Buyers
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Seller”) which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
AND:
(2) Buyer Name 1: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as “Buyer 1”), which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
(3) Buyer Name 2: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as “Buyer 2”), which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
The Seller acknowledges the receipt of INR ____________ (Rupees _________) in cash as token money/earnest money, paid by the Buyers towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyers collectively fail to pay the balance sale consideration and complete the transaction within the agreed time, the Seller shall have the right to forfeit the token money.
3. If the Seller fails to perform his/her obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Seller acknowledges the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Seller Signature
—
Buyer 1 Signature
—
Buyer 2 Signature
Token Receipt for a Transaction Involving Multiple Sellers
This Token Receipt (“Receipt”) is made on this day ____________ (date).
BETWEEN:
(1) Seller Name 1: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as “Seller 1”), which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
(2) Seller Name 2: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as “Seller 2”), which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
AND:
(3) Buyer Name: ____________, Age: ____________, Occupation: ____________, Residing at: ____________ (hereinafter referred to as the “Buyer”) which expression shall, unless repugnant to the context, mean and include his/her heirs, executors, and permitted assigns.
The Sellers acknowledge the receipt of INR ____________ (Rupees _________) in cash as token money/earnest money, paid by the Buyer towards the purchase of the property located at ____________, more particularly described in Schedule A annexed hereto (“Property”).
The parties hereby agree as follows:
1. This token money is a part of the consideration of the said property and will be adjusted towards the total sale consideration of INR ____________ (Rupees _________).
2. If the Buyer fails to pay the balance sale consideration and complete the transaction within the agreed time, the Sellers collectively shall have the right to forfeit the token money.
3. If the Seller fails to perform his/her obligations and complete the transaction within the agreed time, the Seller shall be obligated to refund the token money to the Buyer along with a similar amount as compensation.
4. All other terms and conditions regarding the sale of the property will be mentioned in the Sale Agreement, which will be executed between the parties.
This receipt is executed in duplicate. The Sellers acknowledge the receipt of one executed original.
The parties have executed this receipt as of the date first above written.
—
Seller 1 Signature
—
Seller 2 Signature
—
Buyer Signature
The Significance of Token Receipts
Token receipts are not just pieces of paper; they are the foundation of trust in real estate transactions. Here’s why they are crucial:
- Demonstrates Commitment: A token receipt proves that both parties are committed to the transaction.
- Prevents Backing Out: Sellers can only change their minds with a legitimate reason after accepting a token amount.
- Sets the Terms: It outlines key terms of the deal, including the property’s price and the timeline for completing the purchase.
The Components of a Token Receipt
A well-crafted token receipt should include the following elements:
- Buyer and Seller Information: This section identifies both parties involved in the transaction, including their names, ages, occupations, and addresses.
- Property Description: A detailed description of the property is crucial. It includes the property’s address, dimensions, boundaries, and any other identifying features.
- Token Amount: The amount paid by the Buyer as a token of their commitment to the purchase.
- Payment Details: The mode of payment (cash, check, bank transfer, etc.) should be clearly mentioned.
- Terms and Conditions: The receipt should outline any agreed-upon terms and conditions. This may include the timeline for the final sale and consequences if either party breaches the agreement.
- Future Agreement: It’s common for token receipts to state that a more comprehensive Sale Agreement will be executed between the parties.
Common Mistakes to Avoid When Using Token Receipts
There are several common mistakes that individuals and parties involved should be cautious about. These errors can lead to misunderstandings, disputes, or even legal complications. To ensure a smooth and legally sound property transaction, be mindful of the following pitfalls:
- Incomplete Information: Failing to provide complete and accurate details about the property, parties, and payment can lead to later confusion.
- Lack of Legal Review: Neglecting to have token receipts reviewed by legal experts can result in documents that don’t comply with local laws and regulations.
- Vague Terms and Conditions: Not specifying clear terms and conditions, including consequences for breaches or disputes, can leave both parties vulnerable.
- Ignoring Local Practices: Disregarding local terminology and customs can cause confusion or misinterpretation of the document’s terms.
- Missing Contingencies: Omitting crucial contingencies, such as timelines for completing the transaction and handling outstanding loans, can create uncertainty.
- Neglecting Witnesses or Notaries: Overlooking the need for witnesses or notarization, when required by local laws, can render the token receipt invalid.
- Failure to Keep Copies: Neglecting to retain copies of the token receipt for both parties’ records can lead to disputes over the agreed-upon terms.
- Lack of Communication: Not maintaining open communication between the parties throughout the transaction can result in misunderstandings and delays.
By avoiding these common mistakes, individuals and businesses can ensure that their token receipts serve their intended purpose effectively while minimizing the risk of legal issues or disputes.
Frequently Asked Questions
Final Thoughts
Token receipts may seem like a small detail in the grand scheme of real estate transactions, but they are the foundation of trust between buyers and sellers. They ensure both parties are committed to the deal and provide a framework for the transaction’s future steps. However, always remember that property laws and regulations can vary by location, so it’s wise to consult with a legal expert or real estate professional to ensure your token receipt is tailored to your specific transaction.
In conclusion, mastering token receipts is not just about understanding a piece of paper; it’s about securing your interests and ensuring a successful real estate transaction. With the proper knowledge and guidance, you can confidently navigate the complexities of property dealings.