Legal Guide

Drafting an MOU for Sale of Property

by Bhavya Choudhary · 3 min read

MOU for Sale of Property

Every document signed by the witness and parties is not legally binding. Therefore, it is crucial to know the important ones that hold legal value. When there is the transfer of ownership of a property, a memorandum of understanding or MOU for the Sale of a Property becomes the base of paperwork which is more likely the way to reach a final decision between two parties.

During any real estate deal, before the parties reach a definitive decision, they opt for a softer non-binding document which is just the primary step for the deal. The terms and conditions from both sides can be mentioned in MOU for the Sale of a Property before the actual payment is cleared.

What is MOU?

A memorandum of understanding or MOU is a legal agreement between two or more parties. It acts as more of a flexible document before the actual transaction. For a company, the negotiation period is vital, and an MOU for the Sale of a Property is prepared as an initial understanding. MOU for Sale of Property is also known as a letter of intent in India. Such documents can be kept confidential between the parties according to their will.

  • MOU for the Sale of a Property is not legally enforceable but can be useful within a single public entry between the two parties.
  • There are zero legal provisions for such documents and are very flexible in the sense that terms and conditions can be changed by the parties anytime they wish.
  • Different kinds of additions and alterations can be imposed in MOU for the Sale of a Property.

MOU for Sale of Property and its features

Any company, business, or individual can use MOU for the Sale of Property, given that they hold a clear title. It finalizes the settlement of all the terms and conditions before the assertion of the actual transfer in ownership of the title. MOU for Sale of Property does not contribute towards any substantial rights but instead measures the intentions of every party involved.

There are some essential features in MOU for Sale of Property as follows:

  • The names and details of every party involved should be mentioned and signed in the MOU for the Sale of a Property.
  • The goal for creating it and the purpose it serves should also be elaborated on in such agreements.
  • It should mention the capital which is contributed by the parties, if any. The date when the meeting will be held should also be mentioned for fewer complications.
  • The MOU for the Sale of a Property should also contain the name of the individual who holds power to take a final decision.
  • The maintenance of the financial book/record is also necessary.
  • MOU for Sale of a Property should elaborate on the roles and responsibilities of each party for daily performance and the remuneration provided.
  • The authorized individuals should verify the agreement after all the changes have been made and agreed upon by the parties.
  • The termination circumstances should be jotted down in case of any litigation. At any point, if the parties are not able to decide or understand any clause, they are likely to take legal consultation for such matters at hand for better effectiveness.
  • The duration for which this agreement will last or is valid should be established and agreed upon.

Basic contents in the MOU Agreement

MOU for Sale of Property is made in the initial stages of the transaction to bring a mutual understanding between parties. It is usually an oral discussion and doesn’t have any legal binding. The contents are as follows:

  • The mutual understanding and decision between the parties for such transfers and transactions.
  • The MOU for Sale of Property will serve the purpose of a base agreement before the formal one, which will be legally enforceable.
  • This agreement helps in decisive terms and intentions of the parties involved, and the MOU for the Sale of a Property should be finalized and scrutinized according to such decisions and intentions.

Step-by-step process of Drafting MOU Agreement

There are several steps and discussions involved while drafting a memorandum of understanding:

  • The parties need to decide the nature of the agreement and the purpose for which it is being drafted. The necessary changes and additions for the relevant property should be made while the previous MOU is still valid to avoid invalidations.
  • The parties also need to know whether an MOU is needed or MOA is more appropriate. The choice will decide the contents and clauses the agreement will contain.
  • Take suggestions from the legal guidelines of India before commencing with the MOU for Sale of Property and its terms and conditions.
  • The validity must be decided, and as well as the dates when the parties would meet should be specified.
  • The termination clause should have pertained if the party members or any individual holding the authority fails to follow the regulations mentioned and causes negligence and inefficiency.

Legal Considerations and Stamp Duty on MOU

  • MOU for the Sale of a Property has no stamp duty as per the law, but if it is to be presented in the court for settling any case, then the stamped memorandum can only be used for incorporation of the value of a property that is more than 100/-.
  • The agreement which is stamped can be presented as any kind of proof in a court of law.
  • If the MOU for the Sale of an Immovable Property has been drafted for any exchange of money or consideration, then it becomes legally binding.
  • The rights, roles, obligations, and regulations form the legal position of a memorandum of understanding.
  • An individual may seek legal consultation before the drafting or registration to avoid any hindrance to a transaction.


The MOU for Sale of Property does not bind its parties in any legal manner but only deciphers the intentions of every party involved. The agreement can be used in the future for forming the real contract, which will then be verified and registered with the registrar of properties. The obligations are to be fulfilled by each party on time as mentioned, and clauses are to be revised thoroughly.

The process of drafting an MOU can be simple, but the clauses include many additional obligations which can be clarified with the help of an attorney consultation regarding such matters.

Bhavya Choudhary

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Bhavya Choudhary

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