Auctioneers letter by Gupta

V3_CH32

4 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
A mere proposal or offer until accepted amounts to nothing. If accepted in
writing, the offer and acceptance together amount to an agreement, but if
accepted by parole, it is neither an agreement nor a memorandum of an
agreement, unless after the acceptance something is said or done by the parties
to indicate that in the future, it is to be considered?Carlill v Carbolic Smoke Ball
Coy. (1892)2 Q.B. 484.
But if a proposal made orally is accepted in writing, the writing requires to
be stamped?Hegarty v Milne (1854) G.B. 627: 139 E.R. 258.
Where written proposal is contained in one letter and it is accepted in another,
which does not contain the terms of the agreement which are embodied only
in the first letter, the correspondence required an agreement stamp?Boyd v
Krieg 17 Cal 548. Clause (c) of section 35 of the Indian Stamp Act also provides
that where a contract or agreement of any kind is effected by correspondence
consisting of two or more letters and any of the letters bears the proper stamp,
the contract or agreement shall be deemed to be duly stamped?See also Grant
v Madbox (1846)15M & W. 737: 153 E.R. 1048; Atherstone v Bostock (1841) 2
M. & W.Gt. 115.
FORMS
1
Auctioneer?s letter confirming his instructions
To [Vendor] of [Address, etc.] [Date]
Re: Sale of……………..(property)
Dear Sir,
We thank you for your valued instructions to submit to auction your above
property and confirm that we shall be pleased to undertake the work. We note
that your solicitors will be Messrs………………… of [address] and we will send them
a draft of the particulars of sale in a few days? time.
As you are agreeable to our suggestion of [proposed date] as the most
convenient date for the sale, we have included your property in our list of sales
at [place of sale] on that date. [Insert details of lotting if required].
Arrangements are now being made for preparation of the catalogue and
publication of the necessary advertisements. [Outline terms agreed, for example
any limitation of cost, instructions as to method, or agreement to share the
expenses].
We note that the reserve price for the property [or set out various lots] is to
be Rs……….. [or communicated to us before sale]. We take this opportunity of
confirming that our terms of business are those set out in the scales of
professional charges recommended by [specify appropriate national body orlocal association, if any] [ or our standard conditions] [ a copy of which is enclosed
herewith].
Yours etc.
[Signature of auctioneer]
2
Authority to an auctioneer to sell beforehand by
private treaty1
To [auctioneer] of [address, etc.] [Date]
Re: Sale of………..(Property)
Dear Sir,
This is to confirm your authority to sell my above referred property by private
treaty in advance of the auction which is fixed for the…………. day of…………. I
authorise you to contract on my behalf for the sale of the property for Rs………..
or such other figure as I may from time to time determine, upon the terms of
the particulars and conditions of sale approved by my solicitors, Messrs……………
of [address] for the purposes of the auction, in so far as these are applicable
to a sale by private contract. [if the conditions of sale provide for payment of the
deposit to solicitors, the vendor may add] Please amend the contract to require
the deposit of…………. per cent of the purchase price to be paid to yourself as
stakeholder] [In a case where the auctioneer has not safeguarded his right to
commission with a sale-before-auction clause, the vendor may add I confirm
that commission will be payable to you upon a sale by private treaty in
accordance with this authority as if the sale had taken place at the auction].
Yours etc.,
[Signature of vendor]
1. It is probable that an auctioneer who stipulates for commission, ?on sale by auction? is
not entitled to his regard until the contract is completed and will lose his commission if
the sale should go off after contract; the cases are conflicting. It is to an auctioneer?s
advantage to insert the latter of the two suggested alternatives in his bargain if he can,
although he will generally expect payment of his commission only at the time of
completion.
No stamp is necessary. An authority of this kind is commonly conferred orally by the
vendor with reference to a specific transaction which is in contemplation. A letter is
exacted only as evidence of the auctioneer?s authority; some record of the agreement
is certainly desirable when a general authority to contract is granted by the vendor.
Ch. 32] AUCTIONEERS?FORMS 56 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
3
Auctioneer?s standard conditions
1. The charge for selling property by auction or tender, including preparation
of particulars and advice upon reserves, is as follows:
2. This charge becomes payable upon completion [or execution of the
formalities] of (i) the contract of sale entered into with the highest bidder at the
auction, or (ii) a contract of sale entered into by the vendor between acceptance
of instructions by the auctioneer and the end of the period of three months from
the date finally fixed for the auction, or (iii) a contract of sale entered into by the
vendor with a person introduced to him, whether by the auctioneer or not,
between acceptance of instructions and the end of the said period.
3. Should the vendor withdraw the property from sale, whether before or after
the bidding is opened and whether by reason of inability or unwillingness to sell,
commission shall be payable at the rate of…………… per cent of the above scale
[or a fee of Rs………… shall be payable] [or a fee such as is reasonable in all the
circumstances shall be payable].
4. Should the property be submitted to auction but fail to find a buyer, [insert
as appropriate one of the alternatives in para 3.]
5. Subject to any express arrangement that may be made, the vendor shall
meet the costs of advertising the sale, whether in newspapers, by means by
posters or otherwise, and shall defray the expenses of printing and distributing
particulars, catalogues and other announcements incidental to the auction.
4
Memorandum of sale by private treaty before or after auc-
tion with receipt for deposit1
MEMORANDUM that this………….. day of…………… [purchaser] of [address,
etc.] has agreed to purchase and [vendor] of [address, etc.] by [auctioneer] of
[address, etc.] his agent thereunto by him lawfully authorised has agreed to sell
the property [or lot ….of the property] described in the within-mentioned
particulars of sale upon the terms of the within-mentioned conditions of sale so
far as the same are applicable to a sale by a private contract at the price of
Rs……..[valuation money apart] [add if desired, the deposit money of…..per cent
of the purchase price required by condition…..being paid to the said [auctioneer]
as stakeholder].
[Signature]
RECEIVED as stakeholder this………….. day of……………. from [purchaser] of
[address, etc.] the sum of Rs………….. being the deposit of……………. per centof the purchase price required by condition………….. of the within-mentioned
conditions of sale.
[Signature of auctioneer]
1. This form may be used before or after auction. Property may not be sold under the
hammer but nevertheless find a buyer in the room immediately afterwards. In such cases
the tendency is for the courts to treat the sale as substantially a sale by auction; thus
it has generally been held to fall within the auctioneer?s actual authority. The memorandum
should be drawn up in duplicate and one copy signed by each party, the copy which is
signed by the auctioneer and includes his receipt being handed to the purchaser and
the copy signed by the purchaser being sent to the vendor?s solicitor.
5
Vendor?s letter of authority
To [auctioneer] of [address, etc.] [Date]
Re: Sale of………….(property)
Dear Sir
I confirm our final arrangements for the auction of the above property which
is fixed for the………………. day of…………………
The reserve price for the property is to be Rs………….. [or set out the various
lots]. [ For your information I have appointed [name of bidder] of [address, etc.]
to bid on my behalf up to this figure and thereafter at his discretion.
I authorise you to delegate to a suitably qualified and experienced practitioner
all or any of your duties in and about the sale should you consider it expedient
to do so, but no person appointed is to have any claim on me, whether by way
of remuneration, reimbursement or indemnity.
I confirm that your clerk may sign the necessary memorandum of sale on
my behalf within a reasonable time of the conclusion of the auction.
If you so wish, you may bid for and become the purchaser of the above
property yourself. If I agree to confirm the sale to you and to pay commission
on the price as if the property had been sold to a third party. I authorise you to
sign the memorandum of sale on my behalf as my agent notwithstanding that
you yourself are named as the purchaser. [If the condition of sale require payment
of the deposit to the auctioneer, add If you should purchase yourself the deposit
must be paid to my solicitors, Messrs…………………. of [address] as stakeholders,
the contract being appropriately amended.]]
Yours etc.
[Signature of vendor]
Ch. 32] AUCTIONEERS?FORMS 78 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
6
Letter accepting appointment to bid on vendor?s behalf
To [vendor] of [address, etc.] [Date]
Re: Sale of…………….(property)
Dear Sir,
As requested I confirm the arrangement made with you today by which I am
to bid on your behalf at the sale by auction of your above property to be conducted
by [auctioneers] of [address, etc.] at [specify place] on the…………….. day of………
I am employed to bid on your behalf, advancing by suitable stages at my own
discretion, up to a figure of [insert figure, generally the reserve price]. Thereafter
I am to use my judgment in improving the price bid, bearing in mind that the
reserve has been fixed at rather a low level so as to be fairly sure that the property
is not left on your hands.
As agreed, my fee will be Rs………… for attendance and a further charge of
[insert fixed or variable figure] should the property be knocked down to a
purchaser.
Yours etc.
[Signature of person authorised to bid]
7
Letter accepting appointment to bid on purchaser?s behalf
To [purchaser] of [address, etc.] [Date]
Dear Sir,
Thank you for your instructions to bid on your behalf at the sale by auction
of……………. property to be conducted by [auctioneers] of [address, etc.] at
[specify place] on the………….. day of…………….. I shall be pleased to undertake
the work.
I understand that I am to bid on your behalf up to a figure of Rs…………
advancing by such amounts and bidding at such times as I may consider best
in your interests.
Should I succeed in purchasing the property I am to sign the memorandum
of sale in your name, stating that I do so as your agent [or in my own name but
one your behalf as undisclosed principal]. I am to pay the deposit required by
the conditions of sale [state arrangement made, e.g. credit given by the agent,
and add if desired any express indemnity taken e.g. against costs and expenses
incurred by reason of personal liability on the contract].As arranged, my fee will be Rs………… for attendance and a further charge
of [insert fixed or variable figure] should I succeed in purchasing the property
on your behalf.
Yours etc.
[Signature of person authorised to bid]
8
Memorandum of sale by auction with receipt for deposit
MEMORANDUM that this………… day of…………… [purchaser] of [address, etc.]
has agreed to purchase and [vendor] of [address, etc.] by [auctioneer] of
[address, etc.] his agent thereunto by him lawfully authorised has agreed to sell
the property [or lot……………. of the property] described within the particulars of
sale upon the terms of the within conditions of sale at the price of Rs……….
[valuation money apart].
[Signature]
RECEIVED as stakeholder this…………. day of………….. from [purchaser] of
[address, etc.] the sum of Rs……….. being the deposit of………….. per cent of the
purchase price required by condition……………. of the within conditions of sale.
[Signature]
9
Auctioneer?s letter confirming further instructions
To [vendor] of [address, etc.] [Date]
Re: Sale of…………… (property)
Dear Sir,
We thank you for your further instructions of the…………. day of………… and
confirm that we shall now be pleased to try to dispose of your above property
on a private treaty basis. We have placed the property on our registers at an
asking price of Rs…………… as arranged, and will let you know of any applications
received. [Or We note that we have your authority to contract on your behalf for
a sale of your above property at Rs… or such other figure as you may from time
to time sanction, upon the terms of the particulars and conditions of sale
approved by your solicitors, Messrs…. for auction purposes, in so far as these
are applicable to a sale by private contract. [Add if appropriate We thank you
Ch. 32] AUCTIONEERS?FORMS 910 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
for your authority to take the deposit of…………. per cent required by the conditions
ourselves, giving a receipt as stakeholders.]]
Our terms of business for private treaty work are those set out in the scales
of professional charges recommended by [specify appropriate national body or
local association] [or our standard conditions] [a copy of which is enclosed
herewith]. We confirm that these further instructions are supplementary to, and
do not supersede, our auction instructions, but that only one commission is to
be payable to us in respect of any transaction which might otherwise have been
charged for under both agreements.
Yours etc.
[Signature of auctioneer]
10
Release of deposit in the hands of auctioneer stakeholder
To [auctioneer] of [address, etc.] [Date]
Re : Sale of…………………………… (Property)
Dear Sir,
I confirm the instructions given to you today by which I requested you to
transfer to [other party?s solicitors] the deposit of Rs………. held by you as
stakeholder under the terms of the contract between [other party] and myself
for the sale and purchase of the above-referred property.
Please pay the money to [other party?s solicitors] forthwith upon my
undertaking to release you from any obligation which you would or might
otherwise have borne to retain it against the event of the said contract.
Yours etc.
[Signature of party]
11
Vendor?s solicitors? letter indemnifying auctioneer against
liability upon premature transfer of deposit
To [auctioneer] of [address, etc.] [Date]
Re: Sale of…………. (property)
Dear Sir,
We refer to our telephone conversation with you today concerning the depositof Rs………. which is at present in your hands as stakeholder awaiting the event
of the contract for sale of the above-referred property by our client [name of client]
to the purchaser [name of purchaser].
Our client wishes to obtain the transfer of this sum to us on his account, but
accepts that it is retained by you as stakeholder and that premature transfer might
in certain events involve you in liability to the purchaser.
He has therefore instructed us to confirm on his behalf that in Consideration
of payment of the money to us as his agents to receive the same, he will indemnify
you against all claims, demands, actions and other proceedings whatsoever
which may be made or instituted by the purchaser [name of purchaser] or his
representatives or assigns against you for recovery of the said deposit or any
part thereof or interest thereon and against all costs and expenses to which you
may reasonably be put by any such claim, demand, action or proceeding.
We shall be glad to receive your cheque made out to us as arranged.
Yours etc.
[Signature of solicitors]
II. VALUERS
Synopsis
1. Valuer?Meaning of.
2. Valuer?Qualifications of.
3. Purpose of valuation.
4. Types of value?Meaning.
5. Valuation of assets?Types of.
6. Valuation Report.
7. Stamp Duty.
FORMS.
1. Valuer?Meaning of.?A valuer is a person who sets a price upon or
estimates the worth of property. He is expected to possess the expertise and
knowledge to determine the market value of property. He must possess the
technical knowledge in respect of the area or scope of his function within which
he is expected to work and show his skill. The work of a valuer in private practice
is diverse, and not necessarily limited to advice. Valuers are not infrequently
called on to act as arbitrators, settling disputes as to fact and law which turn on
more than the arbitrator?s view of the worth of some piece of property. More
commonly a valuer is in the position of a quasi-arbitrator, that is to say he
adjudges an issue between parties as to value in which there is no dispute of
fact or law, and he determines a figure in the light of his experience, knowledge
and skill, his decision being binding on his clients. In arriving at any decision as
Ch. 32] VALUERS 1112 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
to the valuation of any property more often than not the courts take into account
the opinion of surveyors and valuers, although there may be evidence on record
of any transaction of sales available before the courts. While acting as a quasi-
arbitrator a valuer has the duty to hold the scales evenly between the parties
and decide impartially?Chambers v Goldthorpe (1901)1 K.B.624; (1900-3) All
E.R. Rep. 969, C.A..
2. Valuer?Qualifications of.?Valuation of property in modern circum-
stances usually requires a competent knowledge of certain professional
methods, and it is prudent for a client to assure himself that his valuer is familiar
both with theory and practice. Membership of one or more of the leading
professional bodies is a strong indication of theoretical competence, but this
must be allied to a close knowledge of local prices and rents; and in certain
special types of cases, for example, rating an property of an uncommon kind
such as a fairground or a public park or a university, it is advisable to entrust
the job to firms which specialise in such work.
3. Purpose of valuation.?Valuation of property may be required to be done
for various purposes. But before proceeding to undertake the job, it is essential
to know precisely as to for what particular purpose the valuation is required to
be made.
Valuation may be required for any statutory purposes, viz.?(1) Under Wealth
-tax Act; (2) under Capital Gain tax; (3) for Gift-tax purposes; (4) under Land
Acquisition Act; (5) under Urban Land (Ceiling & Regulation) Act, 1976; (6) for
determination of Court-fee stamp i.e. valuation of suit; (7) valuation under
Municipal Act for the purpose of taxation etc. Valuation may also be required for
various other purposes, viz.?(1) To ascertain the sale price of property; (2) for
the purpose of fixation of rent; (3) for the purpose of insurance coverage; (4) for
making a bid in an auction; (5) for the purpose of purchase of any property or
business; (6) for the purpose of mortgage etc.
It should, however, be noted that the methods applied for valuation for different
purposes will be different. Similarly, valuation of property according to the
purposes of different statutes is different. For example, valuation under the Land
Acquisition Act will be different from the valuation under the Urban Land (Ceiling
& Regulation) Act, 1976, even on the same piece of land in an urban
agglomeration. Similarly, valuation under various tax statutes is different from
the valuation for other purpose. For example, valuation for the purpose of
insurance or mortgage or as security for bank loan may be different from
valuation for taxation purposes. The factors for determination of the market value
may be different under different statutes depending upon the purpose for which
the same is intended to be used. The basis of determination of the market value
under the Land Acquisition Act for the purpose of payment of compensation to
the owner for the loss of the property may be different from the basis or principles
applicable for determination of the value for the purpose of acquisition of the
property under the Income-tax Act which aims at combating tax evasion and
curbing circulation of black money?C.I.T. v Vimlaben Bhagwandas Patel (1979)
118 ITR 135, 188 Guj.4. Types of value?Meaning.?In common parlance, ?value? means the
amount of money that a property can fetch in the market, if exchanged. Value
is quite distinct from price. Value means, in relation to a property, its worth or
utility or precisely an estimate of what the price ought to be. A price is the realistic
form of value and quantitatively they rarely coincide.
According to the purpose for which the valuation is intended to be used, a
valuer may employ different methods of valuation. In case of valuation of land
and building the basis of valuation may be (1) market value or (2) potential value,
under normal circumstances. The basis may be ?speculative value? for land in
developing locality which may be higher than the ?market value? and is really
known as ?monopoly value? or a fancy price. Similarly, where ?sentimental value?
is attached to a property, it may not have any relation with the ?market value?.
Sometimes a land, which, but for the purposes of the adjacent owner cannot
be usefully developed, may fetch much greater value than the ?market value? so
far as the adjacent owner is concerned, and in that case the method applied is
the ?accommodation value? for the valuation of the said land.
For the purpose of fixation of fair rent of a building, the method often applied
is ?rack rent? which means the best possible rent at which a property can be let.
When a property is subjected to distress sale on account of financial
necessity of the owner or on account of abnormal situation prevailing in the area,
e.g. riots, war etc. the value so derived is said as ?distress value? which is much
less than the ?market value?.
Besides the said common terms often used by the valuers for the purpose
of valuation of property, many other terms are also used according to the purpose
as may be required. For example, (1) ?earning value? means to denote the present
value of a property in terms of the income it shall yield in future; (2) ?assessed
value? is the value as assessed and recorded in the assessment register of a
local authority in respect of taxation purposes; (3) ?book value? of a property
represents its original cost minus allowable depreciation for the period it has been
put to use; (4) ?replacement value?, in relation to an asset, means the
replacement cost at current market rate; (5) ?scrap value? or ?demolition value?
of a machinery or a building, as the case may be, means value of machine which
has become absolutely reduced to a junk for sale as such, or the value of the
old and salvaged building materials after setting off the expenses for demolition;
(6) ?salvage value? denotes the value of a machinery or any other asset, after
the normal span of its useful life has expired or although the same has not yet
been put to use but it has become so damaged as has been rendered unfit for
normal use (in case of a new car damaged by accident before delivery to the
buyer).
5. Valuation of assets?Types of.?Types of assets may embrace a wide
field for the purpose of valuation. However, broadly they may be divided into two
categories, viz. (1) immovable assets and (2) movable assets. Immovable assets
include lands of all description, i.e. urban land, urbanisable land, agricultural land,
orchards, gardens, forests, mining land, fisheries etc.; buildings of all descrip-
tions and also interest in a land and buildings. Movable assets include all other
Ch. 32] VALUERS 1314 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
assets which are not immovable. These include jewellery and ornaments, all
personal effects and belongings, stocks, shares and securities, book debts,
goodwill of a business, interest in any business, patent and copyrights and all
other properties or assets that may be broadly categorised as movable assets.
6. Valuation Report.?As already discussed valuers are deemed to be
experts and any findings arrived at by them and submitted in the form of reports
are more often than not relied on by the judicial authorities in a dispute on the
valuation of any property. However, on the question as to whether the valuation
arrived at under one statute will be binding under other statues, it was held that
the valuation under a statute being done on the basis of rules and to serve the
purpose intended to be achieved there under, the same cannot be applied in
relation to any other statute?Estate of C.Ramaswami Naidu v C.E.D. (1970) 76
ITR 559 (Mad); see also Dina Nath v C.E.D. (1970) 77 ITR 193 Pat. The
perspective of any proceedings will have to be borne in mind before attempting
to apply the same principles in different contexts?Rustom Cavasjee Cooper v
Union of India (1970)40 Company Case 325 SC; see also D.R. Kapoor v.
N.D.M.C. (1980) 122 ITR 700 SC.
It was held that under the Wealth-tax proceedings a valuation report or a
certificate given by an approved or registered valuer was not binding on the
department and it was considered no better than an ordinary piece of evidence
and where the authorities finds that such report contains unreliable or inaccurate
particulars they could reject the same?Dina Nath v C.E.D., supra. However,
where the authorities reject the valuation report on the ground of unacceptable
principles of valuation or on any other ground the burden is upon the authorities
to find out the true value arrived at in accordance with the accepted principles
of valuation?Pingle Venkatarama Reddy v C.W.T. (1972) 85 ITR 132 AP .
7. Stamp Duty.?No stamp duty is required either on a letter of appointment
of a valuer or on a letter of acceptance by the valuer accepting such appointment
on any agreed terms. Neither any stamp duty is required on the Valuation Report
to be submitted by a valuer [See note on ?Stamp Duty? under AUCTIONEER, ante.]
FORMS
1
Letter by valuer confirming his instructions
To [prospective mortgagor] of [address, etc.] [Date]
Dear Sir,
Thank you for your instructions received today to value your property at………
I understand that you require this valuation for the purpose of [obtaining an
advance on first legal mortgage on the security of the property]. You wish me
to state my opinion of [the value of the property and the extent to which it affordsadequate security for money lent upon it]. [I am to assume that the property is
in sound structural condition and generally in proper repair].
I shall be pleased to undertake the work, and take this opportunity of
confirming my terms of business as appearing in the schedule annexed hereto.
[In accordance with our arrangement, I am writing to the prospective
mortgagee…………. to inform him that two-thirds only of the scale fee will be
payable to me should an advance not be made].
[Schedule of terms & conditions]
Yours etc.
[Signature of valuer]
2
Letter by valuer to parties confirming his instructions to
act as quasi-arbitrator
To [names and addresses, etc., of both parties] [Date]
Dear Sirs,
Thank you for your instructions received today to determine [the amount
owing for dilapidations etc. under clause…………. of the agreement between you
dated the………….. day of…………. for a tenancy of premises at……… from………..
to…………].
I shall be pleased to undertake the work, and take this opportunity of
confirming that my terms for doing so are those as mentioned in the enclosed
Schedule.
[Schedule of charges]
Yours etc.
[Signature of valuer]
3
Letter by valuer to prospective mortgagee informing him of
arrangement with mortgagor as to fees
To [prospective mortgagee] of [address, etc.] [Date]
Dear Sir,
I write by arrangement with [mortgagor] of [address, etc.] to inform you of
Ch. 32] VALUERS?FORMS 1516 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
my agreement with him to value his property at.. for the purposes of a mortgage
advance which I understand you contemplate making upon it.
My terms of business will be as per schedule annexed hereto and I may
charge two-thirds only of the scale fee for this valuation should an advance
ultimately not be made, provided you are informed of this arrangement. I have
agreed to work on these terms and to inform you accordingly.
I should be glad, therefore, if you would kindly note the position and
acknowledge receipt of this letter.
[Schedule of terms & conditions]
Yours etc.
[Signature of valuer]
4
Letter by valuer confirming instructions from solicitor to
value security for trustee mortgagees
To [solicitor] of [address, etc.] [Date]
Dear Sir,
Thank you for your instructions received today on behalf of your clients the
trustees of the………….. estate to value the property at……………..
I note that your clients require this valuation for the purpose of considering
whether it is advisable to invest trust funds on the security of the property, and
that they wish to be able to rely if necessary upon the protection afforded by the
Trusts Act, 1882.
For the purposes of my valuation I am to take into account such defects in
the condition of the property as must in my view have any substantial effect upon
its value or the security it extends, but a full survey is not required. [I am to
disregard the value of the business carried on in the premises as a going
concern, and to base my estimate on the value of the property if vacant.] [I am
to note that the upper floor of the property is subject to a tenancy, and I am to
ignore any prospect of obtaining vacant possession and value the tenanted
portion on an investment basis only.]
I shall be pleased to provide your clients with an appropriate report, and take
this opportunity of confirming that my terms of business are those as appearing
in the Schedule annexed hereto.
[Schedule of terms & conditions]
Yours etc.
[Signature of valuer]5
Letter by valuer accepting instructions to represent
a party to a stock valuation
To [client] of [address, etc.] [Date]
Dear Sir,
Thank you for your instructions received today to negotiate on your behalf
with the valuer appointed by [name of other party to valuation] the figure to be
paid for [the furniture, fixture, trade stocks and effects] [passing under the
contract of sale dated the………….. day of…………. between yourself and [other
party] in accordance with clause…………. of the agreement].
I shall be pleased to undertake the work, and take the opportunity of
confirming that my terms of business are those as mentioned in the Schedule
hereto.
[Schedule of terms]
Yours etc.
[Signature of valuer]
6
Letter from estate agent briefly confirming normal
instructions
To [client] of [address, etc.] [Date]
Dear Sir,
We thank you for your instructions received today to find a purchaser for your
property at………. We note that the asking price is to be Rs……… and we will place
the property on our registers and seek a buyer at that figure.
Yours etc.
[Signature of agent]
7
Form of instructions containing onerous commission term
To [estate agent] of [address, etc.] [Date]
Re [description of property]
1. I instruct and authorise you to offer the above property for sale at the price
of Rs………..
Ch. 32] VALUERS?FORMS 17
G : CDD (Vol. 3) ? 218 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
2. I agree to pay you commission at the rate of five per cent on the first Rs………
two and one-half per cent on the next Rs………. and one and one-half per cent
on the remainder of the purchase price if and when (a) a prospective purchaser
signs your ?purchaser?s agreement? and (b) I sign your ?vendor?s agreement?
(receipt of a copy of a form of each of the above agreements is hereby
acknowledged).
[Signature of vendor]
8
Valuation
Under instruction from……….. we have inspected and taken necessary
measurements of the following properties with a view to value the same, for
submission of his return for Wealth Tax as on………..
1. Premises Nos…………..
Both the Municipal premises constitute one property No………. is assigned
to 1st and 2nd floors of the building. We understand that the rent of this portion
is Rs………. per month inclusive of both share of taxes and it is the subject matter
of an Ejectment suit decreed in the owner?s favour but under appeal to High Court
mesne profits have been allowed at the rate of Rs………. per month. No……… is
assigned to the ground floor, is let out to at a rent of Rs…….. per month and tenant
is in pay the occupiers share of taxes. There has been a fresh assessment as
to Municipal taxes. The area of land is 3 cottah, 12 chittacks be the same a little
more or less. Three-storeyed building about 55 years old.
The gross rent of ground floor?Rs. p.m………… Rs………. per year
The gross rent of 1st & 2nd floor?Rs. p.m…….. Rs………. per year
Rs………. per year
Out goings:?
Tax……………………………. Rs…………….
1/6 th for repair…………….. Rs…………….
6% for collection?
expenses……………………. Rs…………….. Net rent Rs………….
We are of opinion that no prudent investor will invest money on land and
building property unless he is to receive a return of 15% on capital invested
allowing for redemption of capital @ 10% as the Bank rates on fixed deposits
for long period is very high.
In our opinion the useful future life of the building is 45 years. Value of Rs……..
per year for 45 years @……….. on capital allowing for redemption of capital @…….% is………. (vide Parry?s Table page 54). That is the value of Rs………. per year
for 45 years @……….. allowing for redemption of capital @……… % is
Rs…………… x ………….. is……………………. Rs………………
The present value of land 3 cottahs, 12 chittacks @ Rs………. per cottah?
Rs……………
The present value of Rs……….. removed ……….. years@………..% is……….
(vide Parry?s Table page 116).
The reversion of land value of Rs……….. removed……….. years @ ……….%
is Rs…………… x ………….. or ……………………. Rs………………
The present value of Pre. Nos……… is Rs……….. +Rs…………… or Rs…………
Value of 1/4th share is Rs………… say Rs………….. only.
2. Premises No………………….
The area of land 3 Bigha, 2 cottahs be the same a little more or less.
The access from the main Road is a common passage………….. ft wide.
The property was on a 26 years? lease let out to Macferlane & Co. Ltd. which
has expired on…………. The rent was Rs……….. per month when the lease
expired. All structures belonged to the tenants and the tenants have been paying
all taxes.
We understand that a suit for ejectment is pending in Sealdah Court and no
rent has been realised since (dated………)
We are of opinion that in case the suit succeeds the mesne profit would be
the basis of rent, namely Rs……… per month. In valuing the property as on…we
have taken that as on our basis, the valuation cannot be taken as free and open
land, in possession of the owners.
The gross mesne profit Rs………. per month Rs………. per year taking a return
of…………. % the years purchase is…………
The present value of the property is Rs…………….
3. Premises No……………….
The total land is 4 Bigha, 15 cottahs be the same a little more or less including
a tank the area of which is 1 Bigha a little more or less.
The land is vacant but in possession of one…………. who claims to be a tenant.
We understand that a suit for possession was filed by……….. was dismissed by
court, thereafter he has filed an appeal which is pending. Nothing is realised by
way of rent or otherwise.
Mr……………. is not possession, nether he receives any rent. The property was
the subject matter of suit which was dismissed. The result of the pending appeal
is uncertain.
In our opinion the value of the property as on…………. in an open market is
Rs…….. (Rupees………………..).
Ch. 32] VALUERS?FORMS 1920 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
4. Premises No…………..
Single storeyed brick built house together with the land thereunto belonging
by measurement………….. cottah, …………..chittacks be the same a little more
or less.
The property is wholly tenanted paying a monthly rent of Rs………….. per
month.
The structure is old and in our opinion the future life of structure is 30 years.
The gross rent of Rs…………… per month or…………….. Rs…………. per year.
Outgoings:?
Tax both shares paid by owner. Rs………….
1/6th for repair…………….. Rs………….
6% for collection
expenses………………….. Rs…………. Rs…………. per year
Net rent………… Rs………….. per year
We have taken the return @ …….% on capital invested for……… years allowing
for redemption of capital @……… %, the T.P . is…….. (vide parry?s Table page 54).
The value of Rs………. per year for………. years allowing for redemption of capital
@ …% is:?
Rs………….. x…………… = Rs…………..
The present value of land………….. cottah………….. chittacks@Rs………….. per
cottah…………………. Rs…………
The present value of Rs………….. removed………….. years @ …………..% is
………….. (vide Parry?s Table page 116).
The reversion of land value Rs………….. removed………….. years @ …………..%
is:?
Rs………….. x………….. or………….. Rs…………..
The present value of premises No………….. is 😕
Rs…………..+Rs………….. or………….. Rs…………..say Rs………….. only.
5. Premises No……………,,,,,
The area is…………. cottah a little more of less. The structures belong to the
tenant. There is no lease and as such the tenant is a Thika tenant and cannot
be evicted or ejected under any circumstances in view of the existing Ordinance.
The rent for the land is Rs………….. per month and the tenant pays the
Occupiers share of taxes namely Rs…………. per quarter.
The gross rent………….. per month or………….. Rs…………… per yearOutgoings:?
Owners share of taxes Rs………….
6% for collection
expenses………………….. Rs…………. Rs…………. per year
Net rent………… Rs………….. per year
Taking a return of………….. % on capital the year?s purchase is ………………..
The value of the property is Rs……… x……….. or Rs………….. (Rupees…………..)
6. Premises No…………..
Single storeyed brick built house together with the land thereunto belonging
by measurement…………… cottah,……….. chittacks be the same a little more or
less.
The property is wholly tenanted. The rent is Rs………….. per month. The owner
pays both share of Municipal taxes being Rs………….. paise per year.
There is no lease.
The structure is old and in our opinion the future useful life of the building
is………….. years.
Gross rent………………………………………………… Rs…
Outgoings:?
Taxes…………………………. Rs………….
1/6th for repair…………….. Rs………….
6% for collection
expenses………………….. Rs…………. Rs…………. per year
Net rent………… Rs………….. per year
Taking the return @…………% on capital for………….. years and allowing for
redemption of capital @……………… % the value of Rs………………. is:
Rs………………..x…………….. (Vide Parry?s Table page 54). Or………. Rs……….
Present value of land…………… cottahs,………….. chittacks?
@ Rs……………… per cottah is……………………… Rs…………..
Present value of Rs…………….. removed…………. years@………..%is………….
(vide Parry?s Table page 116).
The reversion of land value Rs……………. removed 30 years at………… % is:
Rs…………………..x…………………… Rs…………….
The present value of premises No…
Rs……………………..+ Rs…………………… or Rs……………. Say Rs… ………… only.
7. Premises No……………
ALL THAT partly two and partly single storeyed brick built house with stair case
room on the third storey together with the land thereunto belonging by
measurement………….. Bigha, ………..cottahs, ……… chittacks and………. square
Ch. 32] VALUERS?FORMS 2122 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
feet be the same a little more or less at……………… butted and bounded as
follows:?
On the North partly by a road and partly by C.S.Dag No…………. and partly
by premises No…………
On the East partly by a road, partly by C.S.Dag No…………. and partly by
premises No…
On the South partly by Municipal road and partly by premises No………….
On the West partly by Municipal road and partly by premises No………….
We have valued and do value the property at Rs………….. only (Ru-
pees…………..).
A detail of the valuation is attached hereto:?
(Land and Structures Method)
Area of Land- ……… Bigha,…… Cottahs,…….. chittacks-……… sft. @Rs……..per
cottah…………………… Rs. …………..
Structures:?
III. Stair case Room…… Sft. @ Rs………per Sft ……………. Rs…………..
II. Building…………. Sft @ Rs…………. per Sft ……………. Rs…………..
II. Bath & Privy………… Sft@ Rs……. per Sft ……………. Rs…………..
I. Kitchen………….. Sft@Rs…………. per Sft ……………. Rs…………..
I. C.I.Shed………… Sft @ Rs………… per Sft ……………. Rs…………..
Basement floor………… Sft @ Rs…….. per Sft ……………. Rs…………..
Main Stairs……………….L.S ……………. Rs…………..
Small steps (two sets)…………………L.S ……………. Rs…………..
Sanitary, Drainage, water connection including fitting… L.S… Rs…………..
Electric connection with fittings… L.S ……………. Rs…………..
Electric motor pump including-Reservoir complete L.S……. Rs…………..
Rs…………..
Less 25% for Depreciation Rs…………..
Present value of the structures Rs…………..
Outhouses:?
Structures:?
I.Asts……………….. sft @……. per sft…………………. Rs…………..
I.R.T……………….. sft @……. per sft…………………. Rs…………..I.R.T. Baths &
Privy………………. sft @……. per sft…………………. Rs…………..
Boundary wall………… sft @……. per sft…………………. Rs…………..
Gate with Gate?
Pillar……………No…………… L.S………………….. Rs…………..
Rs…………..
Less… % for Depreciation Rs…………..
Present value of out houses Rs…………..
Land value……………….. Rs…………..
Main Building……………. Rs…………..
Out house……………….. Rs…………..
Rs…………..
Say Rs………….. only.
8. Premises No………………..
Total land………………. cottah…………… chittacks be the same a little more or
less occupied by a thika tenant having his own structures.
The rent is Rs…………………. per month.
The thika tenant cannot be ejected under any circumstances in view of the
existing thika tenancy Ordinance.
The only right of the owner is to receive the monthly rent of Rs… only per
month. The taxes are paid by the tenant.
Taking a return of.. % the value is Rs… x… or Rs… only.
9. Premises No………….
Land area originally was (is)……………….. acres.
The Cantonment authorities have under the Cantonment Act absolute power
of resumptions let the entire land without payment of any compensation. We
understand that the Cantonment authorities have as a matter of fact resumed
possession of………… acres on such basis out of the total area originally included
in this building.
There is one small Bunglow which has been requisitioned. The compensation
we understand has been fixed at Rs………… paise which has not been accepted
as such no rent has been realised during the last…………. years or so.
Previous rent was Rs……………….. paise per month or Rs…………. per year.
Outgoings:?
Municipal tax Rs……………….. per month.
In our opinion the value of the property is Rs…………… only.
Ch. 32] VALUERS?FORMS 2324 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
III. ESTATE AGENTS
Synopsis
1. Estate Agent?Meaning of.
2. Estate Agent?Authority of.
3. A Broker?If an Estate Agent.
4. Estate Agent?Duties and Powers of.
5. Estate Agent?Capacity to accept deposit.
6. Stamp Duty.
FORMS.
1. Estate Agent?Meaning of.?An estate agent is a person who holds
himself out as a broker of interests in landed property otherwise than by way
of auction.
But in Abdulla Ahmed v Animendra Kissen Mitter 1950 SCR 30,36: AIR 1950
SC 15: SCJ 153, it was held?
?A house or estate agent is in a different position from a broker at the
stock exchange owing to the peculiarities of the property with which
he has to deal and which does not pass by a short instrument as stocks
and shares do, but has to be transferred after investigation of title as
to which various stipulations which might be of particular concern to
the owner, may have to be inserted in a concluded contract relating to
such property. The parties, therefore, do not ordinarily contemplate that
the agent should have the authority to complete the transaction in such
cases. That is why it has been held both in England and here, there
authority given to a broker to negotiate a sale and find a purchaser,
without furnishing him with all the terms means ?to find a man willing
to become a purchaser and not to find him and make him a purchaser?.
A broker is a mere negotiator and for that purpose alone he may function as
an agent. He is not concerned with the ultimate result of a contract and so he
is not liable to be sued for breach of a contract. A broker merely establishes
contract between the parties to the contract and does not accept any liability for
the fulfilment of the contract?Alapati Ramamurthi G. Krishnamoorthy & Co. v
F . Ramanujam AIR 1961 Andh Pra 408.
2. Estate Agent?Authority of.?There is a fundamental distinction in estate
agency law and practice between the agent who is instructed to make a contract
on his client?s behalf with any person who will offer defined terms, and the estate
agent whose instructions are limited to finding a prospective purchaser with
whom negotiations may take place. Where an estate agent is given authority to
contract, the vendor should avoid employing any other firm with similar
instructions during the agency of the first, and in normal circumstances he may
revoke the authority of the first at any time by notice, in accordance with the
established agency rule?Manser v Back (1848)6 Hare 443.
Where, however, the principal authorised the estate agent to negotiate and
secure a purchaser and before the expiry of the time stipulated by the principalthe agent secured a customer ready and willing to purchase the property and
communicated the offer to the principal, but the principal revoked the authority
of the agent and negotiated directly with the purchaser?s nominee, it was held
by the Supreme Court that the agent was nevertheless entitled to the commis-
sion as he had fulfilled the condition of his appointment?Abdulla Ahmed v
Animendra kissen Mitter, supra.
3. A Broker?If an Estate Agent.?A broker may be termed as an estate
agent for limited purpose only. Primarily and for some purposes, a broker is the
agent of the party by whom he was originally employed. He is also generally the
agent of each of the two parties (i.e. the vendor and the purchaser) for whom
he negotiates. Primarily the broker is employed to find a purchaser or seller and
as such is a mere intermediary. He is thus an agent to find a contracting party
and as long as he adheres strictly to his position as broker, his contract is one
of employment between him and the person who employs him, and not a contract
of purchase or sale with the party whom he in the course of his employment binds
?Imperial Bank Ltd. v L & St. Katherine Docks (1876)5 Ch D 195; Barrow v
Dyster (1884)13 QBD 635].
4. Estate Agent?Duties and Powers of.?An estate agent given instruction
to find a purchaser is not usually bound to do anything?Luxor (Eastbourne) Ltd.
v Cooper (1941) A.C. 198, 124: (1941)1 All E.R.33, 43 H.L.. He is unlikely to do
much more than record the particulars of vendor?s property in his registers and
furnish details to persons who make positive inquiries. An agent who has on the
other hand some assurances that he will be the one to reap the benefit may well
agree to carry some of the expenses of advertising the property and is far more
likely to give the sale the attention the vendor would hope for.
Once a suitable offer has been received, the estate agent will probably draw
up a ?subject-to-contract agreement? and ask the prospective purchaser for a
proportion of the price as deposit, which may be of small amount [See, Williams
on Title (2nd Edn.) 75, note (c); Chillingworth v Esche (1924)1 Ch 97:(1923)All
E.R.Rep. 97 CA. However, the deposit is not legal requirement, and wherever
possible the purchaser would be well advised to refuse to make it?See Jex v
Hankin (1927) Estates Gazette Digest 119; and R. v Pilington (1938)42 Cr. App.
Rep. 233, C.C.A.
5. Estate Agent?Capacity to accept deposit.?The want of meaning in
the normal subject-to-contract deposit is shown by the rule that at any rate until
contract the estate agent holds the money as agent for the purchaser, and must
return it to him on his withdrawal from the deal, for whatever reason?Cf.
Chillingworth v Esche (1924)1 Ch 97: (1923) All ER Rep. 97 CA.
In recent years a practice has grown up of taking subject-to contract deposits
as agents for the vendor, leaving the purchaser to sue the vendor for the return
of the money when very probably the vendor has not seen it. Purchasers who
have deposits with estate agents should ensure that the money is accepted ?as
stakeholders subject to contract?. the effect of which is that the agent holds the
money until contract as agent for the purchaser, and thereafter in accordance
with the provisions made in the contract?Ryon v Pilkington (1959)1 All ER 689:
Ch. 32] ESTATE AGENTS 2526 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
(1959)1 WLR 403, CA; Cf. Chillingworth v Esche (1924)1 Ch 97: (1923)All ER
Rep. 97, CA. More strictly, though it is not the common practice, money may be
left with the estate agent ?as agent for the purchaser?.
6. Stamp Duty.?No stamp duty is payable either on a letter to an estate
agent authorising him to contract on vendor?s behalf or on a letter from estate
agent confirming instructions with provision for commission. But a letter from an
estate agent confirming a sole agency agreement on agreed terms or a letter
purporting to be in substitution for original instructions to an estate agent or a
commission agreement in the form of a letter in substitution for original
instructions issued to an estate agent is required to be stamped under Art. 5 of
Schedule I to the Indian Stamp Act, 1809. Similarly, a letter, by purchaser to
indemnify vendor against possible liability for commission in the form of parole
requires to be stamped under Art. 5 of Schedule I to the Stamp Act [See also
note on ?Stamp Duty? under AUCTIONEER, ante].
FORMS
1
Letter to estate agent authorising him to contract on
vendor?s behalf
To [estate agent] of [address, etc.] [Date]
Dear Sir,
I confirm the instructions given to your representative today to sell my
property at……… at a price of not less than Rs………. or such other figure as I
may from time to time fix. You are authorised and empowered to make a contract
of sale on my behalf which incorporates [specify a form of standard conditions].
In the special conditions please state that [refer to terms desired]. You may also
insert a condition requiring a deposit of………… per cent to be paid to yourself
as stakeholder.
Yours etc.
[Signature of vendor]
2
Letter from estate agent confirming instructions with
provision for scale of commission
To [client] of [address, etc.] [Date]
Dear Sir,
We thank you for your instructions received today to find a purchaser for yourproperty at……… We note that the asking price is to be Rs……… and we will place
the property on our registers and seek a buyer at that figure.
We take this opportunity of confirming that our terms of business are those
as mentioned in the Schedule appended below.
[Schedule of terms]
Yours etc.
[Signature of agent]
3
Confirming letter from estate agent including abnormal
commission term
To [client] of [address, etc.] [Date]
Dear Sir,
We thank you for your instructions received today concerning your property
at………… and have placed this on our registers at an asking price of Rs………
We take this opportunity of confirming that commission at the following rate
[viz. five per cent on the first Rs……… two and one-half per cent on the next
Rs…….. and one and one-half per cent on the remainder of the agreed price]
will become payable on the introduction by us of a person willing to sign a contract
to purchase the property on terms acceptable to you.
Yours etc.
[Signature of agent]
4
Letter from an estate agent confirming a sole agency
agreement
To [client] of [address, etc.] [Date]
Dear Sir,
We thank you for your instructions received today to find a purchaser for your
property at……… We note that the asking price is to be Rs……… and we will place
the property on our registers and seek a buyer at that figure.
We understand that we are to be your sole agents for the period of three
months from today, and that during this period you will neither revoke our
Ch. 32] ESTATE AGENTS?FORMS 2728 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
authority nor consent to the disposal of the property to anyone not introduced
by us.
[Insert provision, if any, as to advertisements, best endeavours, etc.]
Our commission at [insert rate] is to become payable on sale to a person
introduced by us [or payable on the introduction by us of a person willing to sign
a contract to purchase the property on terms acceptable to you], or on sale to
a person introduced to you during the said period, whether by us or not, or on
breach by you of this agreement.
Yours etc.
[Signature of agent]
5
Letter from estate agent offering sub-agency instructions
To [prospective sub-agents] of [address, etc.] [Date]
Dear Sirs,
We have received instructions to find a purchaser for the property at…….. and
would like to offer you a sub-agency.
Our terms are [half] any commission actually received by us on a sale to
an applicant introduced to us by you.
Yours etc.
[Signature of head agent]
6
Commission agreement in substitution for original
instructions
To Messrs. [name of agents] [Date]
Re [description of property]
In consideration of your now introducing to me at my request a bona fide
person whose name is recorded in the document signed by you and now handed
to me and who is prepared to pay the price of Rs………. accepted by me for the
abovementioned property, I agree to pay you commission at [insert rate].
[Vendor?s signature]7
Commission agreement in substitution for original
instructions
[Alternative form]
To Messrs [name of agents] [Date]
Re [description of property]
On sale by me of my above-mentioned property to the person whose name
and address is [or any of the persons whose names and addresses are]
contained in the document signed by you and now handed to me, I agree to
pay you commission at [insert rate].
[Vendor?s signature]
8
Agreement by purchaser to indemnify vendor against
possible liability for commission
To [vendor] of [address, etc.] [Date]
Re [description of property]
In consideration of your entering into a contract for the sale to me of the above
property, at the price of Rs…….. and otherwise on the terms of the draft which
I have [today] approved and signed, I indemnify you against any claim, demand,
action or other proceeding which may be instituted by any person [insert, if
appropriate, apart from Messrs……………] for commission or other remuneration
alleged to be due upon the said sale, and against all costs and expenses to which
you may reasonably be put by any such claim, demand, action or proceeding.
[Signature of purchaser]
9
Form of agreement subject to contract with
receipt for deposit
MEMORANDUM that this…………. day of………….. [purchaser] of [address, etc.]
has agreed subject to contract to purchase and [vendor] of [address, etc.] [insert
if desired by his agent.. of… thereunto lawfully authorised] has agreed subject
to contract to sell the property lying and situate at………. at the price of Rs……….
and upon the following special conditions:
Ch. 32] ESTATE AGENTS?FORMS 2930 CONVEYANCING, DRAFTING & DEEDS [Ch. 32
1. A deposit of………….. per cent of the said price to be paid to [agent] as
stakeholder subject to contract.
2. [Set out any other terms negotiated.]
[Signature]
RECEIVED as stakeholder subject to contract this………. day of……….. from
[purchaser] of [address, etc.] the sum of Rs……….. being the deposit of…………
per cent of the purchase price referred above.
[Agent?s signature]