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A sale deed is an essential document through which the ownership of a property is transferred from one person to another. A sale deed of property is necessary for purchasing and registering a property. The property is registered based on the details mentioned in the sale deed. The buyer of a property mentioned in the sale deed property will become the new legal owner of the property after its registration. The article provides the sale deed meaning, format sale deed, contents of the sale deed, the agreement to sale deed and the execution of the sale deed.
The meaning of sale deed refers to a legal document that outlines the terms and conditions of the sale. It is executed by the seller and the buyer for the transfer of ownership of the property. It outlines the important information regarding the price to be paid for buying the property, description of the property, how and when the property ownership will get transferred to the buyer, etc.
It is an essential document as it is the proof of ownership of the property. It legally reports the proof of the sale of property from the seller to the buyer. The sale/purchase of the property is not legally complete until the sale deed is signed by the buyer and the seller and is registered.
Below is the format for sale deed:
As per the Indian Registration Act, 1908, an agreement for the transfer of an interest in immovable property of value more than Rs.100, is required to be registered. Thus, the sale deed of a property, such as a flat, building or land must be registered for the sale to be legally valid. The sale deed is executed by two parties, i.e. seller and buyer. The seller is the person who is selling or transferring his/her ownership of a property. The buyer is the person who purchases the ownership of a property for consideration.
The sale deed must be registered in the local Sub-Registrar’s office. An unregistered sale deed has no value in the eyes of law. The sale deed is made on non-judicial stamp paper, that is purchased as per the value prescribed by the stamp duty act of a state.
The amount of stamp duty levied on properties differs from one state to another. The charges on stamp duty vary from 4% to 6% on the property’s sale value. The sale/purchase of a property is valid when the sale deed is registered by a Sub-Registrar and when the buyer and seller sign it in the presence of at least two witnesses.
The sale deed must contain the below elements/clauses:
Name and address of the executing parties
The sale deed must specify the name, age, address and contact number of the buyers and the sellers.
Description of the property
The complete address of the property and description and type of property such as residential flat, Kothi, bungalow, shop, office, etc., should be mentioned. The property’s details, such as the complete address, area of the property and dimensions must be mentioned in the sale deed. It should include the property schedule to define the accurate location of the property.
The sale price agreed between buyer and seller, i.e the amount which the buyer has to pay to the seller upon the execution of the sale deed must be mentioned in the sale deed. Also if any advance has already been paid, it should also be specified in the deed.
The mode of payment such as through a cheque, demand draft, or an online transfer is also important and should be mentioned in the sale deed. If the sale amount is paid in instalments, the date of each instalment should also be mentioned in the deed. It should mention the receipts of the sale transaction.
Passing the title
The sale deed should specify the time when the title of the property will get transferred to the buyer. All the documents related to the property must also be handed over to the buyer. It should provide the information that the possession of the property will be transferred to the buyer by the seller after the completion of the registration process. It should also state the actual date of delivery of possession of the property.
Make sure that the title of the property is free from any charge, litigation or encumbrances, i.e. any other person does not have the right to the property to be transferred to the buyer. In case such a situation arises, the seller shall be made liable to indemnify the buyer against any loss.
The seller should clear all statutory charges such as property tax, electricity bills, water bills, society and maintenance charges and all other dues before the sale deed is executed. It ensures that the seller frees the buyers from all the previous loans, taxes, and charges related to the property. Also, the seller should pay any loans and mortgages before finalising the sale of the property.
A sale deed is not legally binding unless it is registered in the sub-registrar office. Both the buyer and the seller along with their witness must be present at the registrar’s office on the fixed date for the registration of the deed. The stamp duty and registration fees have to be paid for getting the registration done.
A sale deed must be prepared by a buyer of a property after obtaining the required documents from the seller. The buyer may consult an advocate or legal professional to ensure that the seller is the owner of the property and the seller has the title deeds to sell the property.
The advocate will prepare the sale deed containing all the clauses/elements of the sale deed. Once, the sale deed is prepared by the buyer or buyer’s advocate, the sale deed is forwarded to the seller. When the seller approves the contents of the sale deed, it is finalised and the parties can proceed to register it in the sub-registrar office.
Certain essential documents are required from the seller of the property which ensures that the seller is the property owner for preparing a sale deed. The documents required to prepare the sale deed are as follows:
A sale agreement is an agreement between the buyer and seller that the property will be sold by the seller and the buyer will purchase the property by paying the required amount for the sale. The sale agreement does not transfer the ownership of the property from the seller to the buyer. It only shows the intention of the future sale.
Below are the differences between the sale deed and the sale agreement:
|Sale Deed||Sale Agreement|
|A sale deed is an actual transfer of ownership of a property.||A sale agreement is a promise of a future transfer of property ownership.|
|A sale deed refers to the immediate and complete sale of the property.||A sale agreement indicates the sale of the property in the future.|
|Under the sale deed, the buyer is responsible for the risk associated with the property.||Until the sale of the property, the seller is responsible for bearing the risk associated with the property.|
|A sale deed is a contract that is executed.||A sale agreement is an executing contract, i.e. yet to be executed in the future.|
|A breach of sale results in a legal case for monetary compensation in the form of damages, injunction or execution.||A breach of the sale agreement results only in a suit for damages.|
|It is mandatory to register a sale deed and the buyer is liable to pay the stamp duty.||The registration of the sale agreement depends on the rules of the state. Registration is mandatory in some states while it is not mandatory in other states.|
|Under the sale deed, the rights and claims of the property are handed over to the buyer.||The sale agreement only gives the buyer the right to purchase a property in the future.|
|The sale deed includes information related to the parties involved, property and payment details, along with other information.||The sale of the agreement only includes terms and conditions based on which the sale of the property will be executed.|
The sale deed is an important document. It acts as a title deed ensuring the buyer has the ownership of the property. Thus, the property owner must keep the sale deed in a safe place. Any person can obtain a certified copy of the sale deed from the sub-registrar office where it is registered. A person can file an application to the sub-registrar for obtaining a certified copy of the sale deed and pay the required fee. The sub-registrar will issue the copy of the certified copy of the sale deed within 2 weeks.
However, if the property owner loses the sale deed, he/she must file a complaint at the nearest police station. A non-traceable certificate is issued to the property owner after filing the complaint (FIR) at the police station. The property owner should publish an advertisement in the newspaper about the loss of the sale deed after getting the non-traceable certificate. The property owner should file an affidavit and application and pay a fee to the sub-registrar office to get a certified copy of the sale deed.
The affidavit must be notarized and contain the attachments of the copy of FIR, advertisement, non-traceable certificate and details of the property. It must also contain a signed undertaking stating that the information in the affidavit is genuine. After the process is complete, the sub-registrar office will issue the certified copy of the sale deed in 2-4 weeks.
Either party, i.e. the buyer or seller, can cancel the sale deed by filing a suit for cancellation in court when the other party does not agree. The buyer and seller can even cancel the sale deed by mutual consent by registering a cancellation deed. When the sale deed is cancelled, it will result in the cancellation of the sale of the property and the property ownership will revert back to the seller mentioned in the cancelled sale deed.
The Specific Relief Act, 1963, provides the conditions under which a sale deed can be cancelled by either party, which are as follows:
Upon cancellation of the sale deed, the court will send a copy of its decree of cancellation to the sub-registrar office where the sale deed was registered. The sub-registrar officer will note the facts of the cancellation of the sale deed.
A sale deed is a document which establishes property ownership. It also includes the details related to the property, buyer and seller, rights of the buyer, etc. The sale deed establishes the ownership of the buyer over the property. The buyer mentioned in the sale deed is the legal owner of the property. However, the sale deed must be registered with the sub-registrar office for it to be valid. Without sale deed registration, the ownership of the property will not get transferred to the buyer.
The sale deed is drafted by the buyer/purchaser of the property. The buyer must obtain the documents relating to the property from the seller to ensure the ownership of the seller, property location details and ensure the property is free from any charges. The buyer can draft the sale deed containing all the elements of a sale deed or get it drafted by a legal professional.
A sale deed agreement constitutes the terms and conditions of the sale of a property. It is an agreement between the buyer and seller stating the intention of the buyer to sell the property upon payment of the consideration/sale price by the buyer. The sale deed agreement is the base document upon which the sale deed is drafted. However, it does not involve an immediate transfer of ownership and the buyer has no right and interest in the property upon the execution of the sale deed agreement.
The sale deed is a proof of ownership document of a property. It is a critical document, especially during the sale of the property. It is a legal document used during a property transaction as evidence of the sale and transfer of ownership of a property from the seller to the buyer. It is also referred to as the title deed, final deed or conveyance deed.
The sale deed is valid only after it is registered in the sub-registrar office and signed by the buyer, seller and two witnesses. Once the sale deed is registered, it is valid till the owner sells the property to another person.
If you have lost the original sale deed of the property, you need to file an FIR at the nearest police station. The FIR copy must be submitted to the sub-registrar office along with the application for obtaining the certified copy of the sale deed. The sub-registrar will issue the certified copy of the sale deed in 2-4 weeks.
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