The Sale deed is an essential legal document that is made primarily for concluding the sale or transfer of immovable property and transferring the ownership title to the purchaser. A sale deed is registered as per the provisions of the Indian Registration Act, 1908 and is a form of conveyance deed through which the ownership is transferred. Sale is defined under section 54 of the Transfer of Property Act,1882 as ‘Sale is a transfer of ownership in exchange for a price paid or promised or part – paid and part – promised.
What is Sales Deed?
The sale deed is the last stage of the sale of immovable property. The deal starts with negotiating the sale price between the vendor or seller and the vendee or buyer, once the negotiation has been completed the advance is given which is generally the 10% of the agreed selling price of the property. The third step is the formation of the ‘Agreement of Sell’ which is not synonymous with the sale deed rather it is a legal document which contains all the terms and conditions of the sale of property related to the mode of payment, payment schedule, default by a party to the agreement and the consequences of such default etc. all the important conditions are included in the agreement to sell. The agreement is duly signed by both parties.
The sale deed is signed at last when the final payment is paid, it is the final document which transfers the ownership right from the seller to the buyer after it is registered in the registrar’s office. Various rights are transferred once the sale deed is registered; the right to use the property, the right to give property on lease, the right to mortgage the property and the right to sell the property. These rights establish the ownership of the buyer over the property.
Essential Elements of Sale Deed
There are some essential elements of a sale deed which are discussed below:
Details of the Parties Involved
All the details of the buyer and the seller including the full name, age of the parties, father’s name, and full address of the parties.
Schedule of the property
This includes all the details including the location, address and description of the property containing the property orientation, area of the property or details of the construction of the property that is the subject matter of the sale deed.
Information regarding the payments
The payment details of the sale mention the sale price that was agreed upon, the amount of advance paid to the seller, the number of instalments in which the final payment was concluded, the mode in which the payment was carried out and the date of final payment.
Time of transmission of original property documents
The time at which the original documents of the property will be handed over to the buyer is also mentioned in the sale deed.
Passing the possession of the property
The time of transfer of the possession of the property from the seller to the buyer is clearly mentioned in the deed.
Specifications regarding the encumbrances and liens
The whole information about the encumbrances which are the rights of other people over someone else’s property is given in the sale deed. It is essential that there are whatsoever no encumbrances or lien on the property at the time of execution of the sale deed.
Indemnity provisions
The indemnity clause is inserted to indemnify the buyer. The seller indemnifies the buyer against any loss that occurred to the buyer.
Safegurds That Shall be Taken Regarding a Sale Deed
Confirm a clear title
The buyer as a precaution shall always check whether the title of the property and there is no dispute as such. For doing so it is required to look at a chain of titles which means that the history of around 30 to 40 years should be looked upon. Taking into consideration how the property was transferred, no liabilities on the property and if it has been inherited by all the heirs and no one is left as they can claim after you purchase the property.
Relating to Encumbrances and liens
It is better if the property is clear beforehand and there are no encumbrances or liens which can be some tax dues, society charges, leases etc. In case there are encumbrances or liens or the property the buyer shall make sure to enter a clause in the agreement to sell directing the seller to clear all the dues and indemnify the buyer against those dues.
Sale deed shall be absolute
The sale deed that is to be executed shall be absolute. The buyer shall thoroughly check the sale deed and ensure that there are no ambiguities; there shall be no conditions which can hamper the absolute transfer of title to the buyer.
Process of Execution of Sale Deed
Drafting of the sale deed
The drafting of a sale deed has a lot of importance as the drafting shall be mistake-less and so the sale deed shall always be drafted by a legal expert or a lawyer on a non-judicial stamp paper purchased by the buyer.
Payment of the stamp duty
The stamp duty is usually paid by the buyer which varies from state to state but the maximum limit is set by the Indian Registration Act, 1908. The approximate stamp duty that is levied is around 3 to 10% of property value, for example, in the capital city of India, the stamp duty is 6% for males, 4% for females and 5% for joint ownership (herein husband and wife).
Signatures of the parties
The sale deed is signed and executed by both the parties; seller and buyer, the thumb prints are also required along with the signatures. The signatures of two witnesses are also included one from both sides.
Registration of the sale deed
The sale deed is then registered at the Sub-Registrar’s office having local jurisdiction over the property. Appointments for the registration process can be booked online or offline modes. The seller presents the original documents of the property before the sub-registrar for verification. Both the parties shall be present and if in case a party is unable to attend s/he can give the power of attorney to someone.
The witnesses of both parties shall also remain present at the time of registration and all the parties must be carrying the ID proofs.
Collection of the Registered Sale Deed
The last step is to collect the registered sale deed from the sub-registrar’s office at the time prescribed. The sale deed can be collected with the help of the token slip given after the signing of the sale deed.
Documents Required for a Sale Deed
There are certain documents prescribed by the Transfer of Property Act,1882 that shall be presented before the sub – registrar for the purpose of verification. These are listed below:
- Sale deed draft
- Two passport size photographs of the parties and witnesses
- ID Proofs
- Certificate of incorporation if a company
- Copy of property register card
- Municipal tax bill
- PAN Card etc.
Get Your Sale Deed Drafted with WeVaad
The drafting of a sale deed holds much importance and thus shall be drafted by legal experts or a lawyer. Although there are various websites which provide free formats and templates, it is the best option to get your sale deed drafted by a lawyer as you do not want any discrepancies in the deed.
WeVaad is an online dispute resolution platform providing services such as arbitration, mediation, and conciliation online along with the services related to finding a lawyer, online legal consultation and agreement drafting. If you are someone looking for a legal expert to get your sale deed drafted, you have come to the right place as we have a panel of legal experts who can solve all your legal queries and help you.