INDEMNITY CLAUSE AND ITS IMPORTANCE IN LAND/BUILDING PURCHASE DOCUMENTS

INDEMNITY CLAUSE AND ITS IMPORTANCE IN LAND/BUILDING PURCHASE DOCUMENTS

An indemnity clause in a land/building purchase agreement is a provision where the seller agrees to compensate the buyer for loss, liability or damage that may arise after the transaction. It protects the buyer from risks related to faulty ownership, third-party claims or undisclosed government acquisitions or interest.

Importance of an Indemnity Clause
✓ Protects Buyer Against Ownership Defects – If the seller’s ownership is defective or disputed, the indemnity clause ensures the buyer is compensated for any loss.

✓ Covers Hidden Liabilities – It shields the buyer from unpaid taxes, debts or any legal claims tied to the property.

✓ Ensures Legal Compliance – It mandates the seller to resolve all legal issues affecting ownership.

Consequences of Not Having an Indemnity Clause

× Risk of Ownership Disputes – The buyer may lose the property if a third party proves superior rights.

× Financial Burden – The buyer may bear the cost of resolving hidden issues.

× Potential Loss of Investment – Without indemnity, recovering money in case of fraud or misrepresentation becomes difficult.

A Property Lawyer ensures that the indemnity clause is well-drafted, specific and enforceable, preventing situations that could affect your property investment.

To secure a legally sound transaction and protect your property rights, get a Property Lawyer.
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