WHY YOU MUST HAVE AN INDEMNITY CLAUSE IN YOUR LAND PURCHASE DOCUMENT

WHY YOU MUST HAVE AN INDEMNITY CLAUSE IN YOUR LAND PURCHASE DOCUMENT

An indemnity clause is a legally binding term in a land/building purchase agreement where the seller undertakes to compensate the buyer for any loss, damage or issues that may arise in the property’s ownership.

It protects the buyer if someone later successfully claims ownership, if there are pending seller’s duties or if other problems surface.

IMPORTANCE OF INDEMNITY CLAUSE
1. Risk Transfer: It transfers the risk of future legal or financial issues from the buyer to the seller. If a third party wins ownership of the land after the purchase, the seller has a legal duty to cover all the buyer’s losses.

2. Legal Protection:It ensures that the buyer recovers all his expenses if the property has undisclosed problems.

3. Seller Accountability: It holds the seller accountable for providing a clear ownership, ensuring he resolves all setbacks before the sale.

WHAT HAPPENS WHEN YOU DON’T HAVE INDEMNITY CLAUSE?
a) Financial Burden: The buyer may have to bear the cost of resolving issues or ownership problems which are costly and time-consuming.

b) Legal Vulnerability: The buyer is left exposed to cases and loss of the property.

c) Uncertainty: Creates uncertainty as the buyer cannot be sure the property is free from legal or financial issues.

Get a Property Lawyer to draft a comprehensive land document that includes an indemnity clause.

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