Sale Deed
What is a Sale Deed?
A sale deed is a legal document that signifies the transfer of title, rights, and ownership of a property from a seller to a buyer.
It serves as the most important document providing legal evidence for both the buyer and seller, essential for both parties, i.e., the buyer (transferee) and the seller (transferor). The purchase or sale of the property remains legally incomplete until a sale deed agreement is signed by both parties. Typically, this agreement is executed only after mutual satisfaction and compliance with the terms and conditions.
Advantages of a Sale Deed
Protects Parties
Sale deed registration safeguards the rights of both the buyer and the seller. A well-crafted deed minimizes ambiguity and reduces legal risks.
Defines The Area
For the buyer, a significant advantage lies in having a precise description of the purchased property, including its square footage and location.
Additional Benefits of Sale Deed Registration:
What is Included in the Sale Deed?
In general, a sale deed should encompass the following details:
- Descriptions of the Parties Involved: This includes the full names, complete addresses, contact details, ages, and occupations of each buyer and seller.
- Description of the Property Being Transferred: This section should include the identification number, accurate address, dimensions of the property, and construction details of any buildings.
- Indemnity & Encumbrance Clause: The seller declares that the property being transferred is free from any encumbrances, litigations, or charges. Additionally, the seller indemnifies the buyer against any pending charges.
- Settlement of Pending Loan: The seller must settle any pending loans associated with the property before proceeding with the sale, and the buyer has the right to review related documents before drafting and registering the sale deed.
- Sale Consideration: This refers to the price at which the transfer deal is finalized, including any advance amounts paid. Payment terms, dates, and modes should be explicitly agreed upon, and all transaction details should be clearly stated in the sale deed format, including receipts.
- Delivery & Possession of the Property: The deed should specify the date of handover and possession by the buyer.
What Are the Things to Keep in Mind During Sale Deed Registration?
- Title: Ensure that the seller holds a clear and undisputed title to the property, verified through a title search and obtaining a title certificate.
- Documentation: Have all necessary documentation, such as the sale agreement and power of attorney, ready before initiating the sale deed registration process.
- Tax Clearance: Clear all outstanding taxes, including property tax and stamp duty, before proceeding with the registration.
- Legal Advice: Seek guidance from a qualified lawyer to ensure a smooth and lawful sale deed registration process.
- Valuation: Get the property evaluated by a professional valuer to ensure a fair and reasonable price.
- Survey: Conduct a property survey to accurately describe the property and define its boundaries.
- Registration Fees: Pay the required registration fees to ensure the validity of the registration process.
- Witnesses: Ensure the sale deed is signed in the presence of at least two witnesses who can attest to its authenticity.
Requirements of a Sale Deed
- The sale deed format must include the names and addresses of both the buyers and the sellers.
- A comprehensive property address and description should be provided in the sale deed.
- The agreed-upon sale price between the buyer and seller must be clearly stated in the sale deed, along with any advance payments made.
- Details regarding the mode of payment should be specified.
- The sale deed should outline the timeline for the transfer of property title to the buyer and ensure that all related documents are handed over.
- It is imperative to confirm the clear title of the property, free from any encumbrances.
- A property sale deed only becomes legally binding after it is registered at the sub-registrar office. Both the buyer and seller, along with witnesses, must be present for the enrollment of the deed.
- Stamp duty and sale deed registration charges must be paid to complete the sale deed registration process.
Documents Required for Drafting Sale Deed Agreement
Drafting a sale deed agreement involves gathering several crucial documents to ensure the legality and smooth execution of the property transfer process. The following documents are typically required:
Title Deeds: These documents establish the seller’s ownership of the property and include documents such as the sale deed, partition deed, gift deed, or will, depending on how the property was acquired.
Encumbrance Certificate: This certificate provides details of any legal dues or liabilities attached to the property, such as mortgages, liens, or pending litigations. It helps ensure that the property’s title is clear and free from any encumbrances.
Property Tax Receipts: Proof of payment of property taxes up to the date of sale deed drafting is essential to demonstrate that there are no outstanding tax dues on the property.
Building Approval Plan: If the property includes any constructed buildings, the approved building plan from the relevant local authority is necessary to confirm that the construction complies with legal regulations.
Khata Certificate and Extract: These documents, issued by the municipal corporation, provide details regarding the property’s assessment for property tax purposes and its registration in the municipal records.
Sale Agreement: A copy of the initial sale agreement, if one exists, should be provided to ensure that the terms and conditions agreed upon by the parties are accurately reflected in the sale deed agreement.
Identity and Address Proof: Both the buyer and seller must provide their identity and address proofs, such as Aadhaar card, passport, voter ID, or driver’s license, to verify their identities and residences.
Witnesses’ Information: Details of witnesses who will sign the sale deed agreement should be provided, including their identity and address proofs.
Power of Attorney (if applicable): If either party is represented by a power of attorney holder, a copy of the power of attorney document authorizing the representative to act on behalf of the party should be included.
Stamp Paper: The sale deed agreement must be printed on non-judicial stamp paper of requisite value, as per the stamp duty regulations of the state where the property is located.
By ensuring the availability and authenticity of these documents, parties involved in the sale deed agreement can streamline the drafting process and mitigate potential legal complications in the transfer of property ownership.
The Process for Getting a Sale Deed
Document Verification:
- The buyer obtains necessary documents from the seller to initiate the sale deed process.
- It’s recommended for the buyer to engage a legal professional to verify the seller’s ownership and ensure possession of requisite title deeds.
Drafting of Sale Deed:
- The legal expert, either appointed by the buyer or engaged mutually, drafts the sale deed.
- The sale deed incorporates all essential clauses and components necessary for the property transfer.
Approval and Finalization:
- Once the sale deed is drafted, it is submitted to the seller for review.
- Upon the seller’s approval of the sale deed’s contents, the document is finalized.
Sale Deed Registration:
- After finalization, both parties proceed with the registration of the sale deed at the sub-registrar office.
- The sale deed registration involves submitting the finalized document along with the required fees to the registrar.
By following these steps, the buyer and seller can ensure a legally sound and transparent process for obtaining the sale deed, facilitating the transfer of property ownership in accordance with legal requirements.
Points to Remember When Executing a Sale Deed
Points to Remember When Executing a Sale Deed
When executing a sale deed, it’s essential to keep the following points in mind:
Ensure Property Free from Encumbrances:
- Verify that the property is free from any encumbrances like mortgages or liens.
Conduct Title Search:
- Perform a title search to confirm the seller’s ownership rights over the property.
Conduct Property Survey:
- Conduct a property survey to verify the accuracy of boundaries.
Determine Fair Market Value:
- Get a valuation done to determine the fair market value of the property.
Negotiate Purchase Price:
- Negotiate the purchase price to ensure fairness to both parties.
Draft Sale Deed by Lawyer:
- Have the sale deed drafted by a qualified lawyer to ensure legal compliance.
Sign in Presence of Witnesses:
- Sign the sale deed in the presence of witnesses to validate the transaction.
Register with Relevant Authorities:
- Register the sale deed with the relevant authorities to make it legally binding.
Sale Deed Charges
Sale deed charges in India vary based on the property’s location and value. They are typically calculated as a percentage of the property’s value, with the percentage varying by state.
Important Elements of the Sale Deed
Key elements of a sale deed include:
- Property Description: Accurate details of the property, including dimensions, boundaries, and location.
- Buyer and Seller Details: Names and addresses of both parties involved in the transaction.
- Purchase Price: Agreed-upon price for the property and payment terms.
- Mode of Payment: Specifies how the payment will be made (cash, cheque, etc.).
- Possession Date: Date when the buyer will take possession of the property.
- Rights and Obligations: Responsibilities of both parties, such as maintenance duties.
- Indemnification Clause: Protects parties from potential losses or damages.
- Signatures and Witnesses: Signatures of both parties and witnesses to validate the sale deed.
Sale Deed Sample Format
| Format |
|---|
| This Deed of Sale is made and entered into this [Date] day of [Month], [Year], by and between: 1. [Name of Seller], S/o/D/o [Name of Father/Mother], aged [Age] years, residing at [Address], hereinafter called the ‘Seller’ (which expression shall mean and include his/her legal heirs, successors, successors-in-interest, executors, administrators, legal representatives and assigns), AND 2. [Name of Buyer], S/o/D/o [Name of Father/Mother], aged [Age] years, residing at [Address], hereinafter called the ‘Purchaser’ (which expression shall mean and include his/her legal heirs, successors, successors-in-interest, executors, administrators, legal representatives and assigns). WHEREAS, the Seller is the absolute owner and possessed of the property described in the Schedule hereunder and hereinafter referred to as the ‘Schedule Property’ free from all encumbrances and disputes whatsoever. ANDWHEREAS, the Seller has agreed to sell and convey the Schedule Property to the Purchaser for a total consideration of [Sale Amount] in [Mode of Payment, e.g., cash/cheque/bank draft] and the Purchaser has agreed to purchase the same for the aforesaid consideration and to that effect the parties entered into an agreement on the [Date of Agreement]. NOW THIS DEED WITNESSETH: 1. Consideration: In consideration of the sum of [Sale Amount] (Rupees [Sale Amount in Words] only) paid by the Purchaser to the Seller, the receipt of which is hereby acknowledged by the Seller, the Seller hereby sells, conveys, and transfers unto and to the use of the Purchaser, the Schedule Property absolutely and forever. 2. Description of Property: [Detailed description of the property, including survey number, area, boundaries, etc.] 3. Covenants by the Seller:
4. Possession of Property: The Seller shall deliver possession of the Schedule Property to the Purchaser on [Date of Possession]. 5. Registration: The Purchaser shall get the Deed registered at the Sub-Registrar’s Office within [Number] days from the date of execution of this Deed. 6. Witnesses: This Deed is signed and delivered in the presence of two witnesses whose names and addresses are mentioned below:
[Signatures of Seller and Purchaser] [Signatures of Witnesses] Schedule [Detailed description of the property, including survey number, area, boundaries, etc.] |
Difference Between Sale Deed and Sale Agreement
| Sale Deed | Sale Agreement |
|---|---|
| An actual transfer of property ownership takes place through a sale document. | The promise of a future transfer of property ownership is contained in a selling agreement. |
| An immediate and complete sale of the property is referred to by a sale deed. | A sale agreement suggests that the property will eventually be sold. |
| According to the sale document, the buyer is in charge of the property’s risk. | The risk connected to the property must be borne by the seller up until the sale of the property. |
| A sale deed is an accomplished contract. | A selling agreement is an executing contract, meaning it will eventually be carried out. |
| A lawsuit is filed after a breach of contract to recover money in the form of damages, an injunction, or execution. | Only a lawsuit for damages can be brought about by a breach of the sale agreement. |
| The buyer is liable for paying stamp duty and registering the sale deed. | According to state regulations, the selling agreement must be registered. In some states, registering must be done in order to vote, but not in others. |
| The buyer receives all of the property’s rights and claims as outlined in the sale deed. | The buyer is only granted the right to acquire a property in the future under the terms of the sale agreement. |
| The sale document contains information about the individuals involved, the property, and payment information, among other things. | Just the terms and conditions under which the property will be sold are included in the sale of the agreement. |
Execution of a Sale Deed
The Indian Registration Act of 1908 mandates that any agreement for the transfer of real estate interest exceeding ₹100 in value must be registered. For a property transaction, such as the sale of a flat, building, or plot of land, the sale deed must be registered to be enforceable. The sale deed is a document signed by both the buyer and seller, where the seller is the individual transferring ownership of the property, and the buyer is the individual purchasing the property for a specified sum.
The sale deed must be submitted to the local sub-registrar office for registration. From a legal standpoint, an unregistered sale deed holds no value. The non-judicial stamp paper used for the sale deed is purchased according to the stipulated amount set by the state’s stamp duty legislation. Stamp duty rates for real estate transactions vary by state, typically ranging from 4% to 6% of the property’s selling price. Once signed by the buyer and seller in the presence of at least two witnesses, and registered by a sub-registrar, the sale or purchase of a property becomes legally binding.
Getting a Certified Copy of Sale Deed
Obtaining a certified copy of a sale deed in India involves specific steps and procedures, which may vary slightly based on the state and location. Here’s a general guide:
Identify the Location: Determine the location where the property transaction was registered, usually indicated on the original sale deed.
Contact the Sub-Registrar: Visit the relevant sub-registrar’s office with details including property location, survey number, and date of registration, along with the names of the seller and buyer as mentioned in the original deed.
Application and Fees: Fill out the application form provided by the sub-registrar’s office and pay the necessary fees, including application fee, inspection fee, copying fee, and user charge.
Documentation: Submit copies of relevant documents, including your ID proof, proof of address, and an affidavit stating the reason for needing the copy if required.
Verification and Processing: The sub-registrar will verify the information and process your application, which may take several days to a week depending on workload.
Collection of Certified Copy: Once processed, collect the certified copy of the sale deed from the sub-registrar’s office.
What is the Cancellation of a Sale Deed?
The cancellation of a sale deed refers to the process of reversing the sale of a property. This action can be initiated by either the buyer or the seller, with specific requirements varying based on jurisdictional laws.
There are several reasons why individuals may seek to cancel a sale deed. For instance, the buyer might discover undisclosed major defects in the property, or the seller might fail to fulfill agreed-upon payment obligations.
To effectuate the cancellation of a sale deed, the involved parties must enter into a cancellation agreement. This agreement should be documented in writing and signed by all parties involved. It should outline the terms of cancellation, including the return of the purchase price and settlement of any outstanding debts.
Furthermore, it’s crucial to register the cancellation agreement with the appropriate authorities to ensure its enforceability against third parties.
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