What is a Sale Deed?
A Sale Deed is one of the most crucial legal documents in the process of transferring property ownership from a seller to a buyer. It is the ultimate proof of sale, marking the completion of the property transaction, and establishes the buyer as the legal owner of the property. Without this document, the sale cannot be legally recognized.
In India, the sale deed holds legal significance under the Indian Registration Act, 1908. According to the Act, any transfer of immovable property valued over ₹100 must be registered for the transaction to be legally valid. This means that the sale deed needs to be executed and registered with the appropriate authorities to ensure that the transfer of ownership is enforceable in a court of law.
Key Elements of a Sale Deed
To ensure legal compliance and clarity in the transfer process, the sale deed should include certain essential elements:
- Names and Addresses of the Parties Involved: The sale deed must specify the name, age, address, and contact details of both the buyer and the seller.
- Description of the Property: The deed must provide a detailed description of the property being sold, including its full address, size, dimensions, and type (residential, commercial, etc.). It should also include a schedule of the property to define its accurate location.
- Sale Consideration: The sale deed should clearly mention the sale price agreed between the buyer and the seller. This section should also indicate any advance payment made and the mode of payment (cheque, demand draft, online transfer). If the transaction occurs in installments, the deed should mention the details of each payment.
- Transfer of Ownership: The sale deed must specify when the ownership and title of the property will be transferred to the buyer. Additionally, all documents related to the property should be handed over to the buyer after registration. The possession date, when the buyer can occupy the property, should also be clearly stated.
- Indemnity Clause: This section ensures that the property is free from any encumbrances, such as debts, legal disputes, or liens. The seller indemnifies the buyer against any losses that may arise from claims on the property after the sale.
- Payment of Charges: The sale deed should confirm that the seller has cleared all dues, such as property tax, water and electricity bills, society charges, etc., before the transaction is completed.
- Registration: As per the law, the sale deed must be registered at the local Sub-Registrar’s office. Both parties, along with witnesses, must be present for registration. The stamp duty and registration charges, which vary from state to state, must be paid to complete the registration process.
Registration of a Sale Deed
When you are registering a sales deed, you have to follow these steps to make the registration process efficient and seem easier.
Both the parties have to submit necessary documents to the sub-registrar to initiate the process. These documents should be there to initiate the process-
- The rates of the property will be determined as per the region, and the same should be disclosed in the deed.
- As per the rules, the price of the region and the one decision should be related to each other. And if the actual price paid is different from the stamp duty value, then the higher of these two should be taken into consideration.
- Subsequently, a non-judicial stamp has to be bought and pasted.
- After all of this, the deed has to be prepared in a type and printed in a stamp format.
- The last step is to submit everything with the sub-registrar office and get the sale registered. And there must be two witnesses by both of the parties to complete the process.
Process of Executing a Sale Deed
The process of preparing and executing a sale deed involves several steps:
- Drafting the Sale Deed: The buyer typically prepares the sale deed with the help of an advocate after verifying all necessary property documents from the seller. These documents include payment receipts, property tax receipts, and an encumbrance certificate that ensures the property is free from pending dues or legal claims.
- Approval by the Seller: After the sale deed is drafted, it is forwarded to the seller for approval. Once both parties agree on the terms, the sale deed is finalized.
- Registration: The final step is registering the sale deed at the Sub-Registrar’s office. Both parties, along with two witnesses, must appear for the registration. The sale is not legally binding until this step is completed.
Cancellation of a Sale Deed
A deed is a legal document that is an agreement between the seller and the purchaser. A deed of cancellation is a legal document that cancels the agreement or contract of sale. The clause for cancellation of a deed can be written in the deed itself or any other document attached to the deed.
The cancellation process can be initiated even when one party requests for cancellation but the cancellation process can be executed only when both parties sign the document.
The cancellation of the deed can be done by both parties as well if there is a related agreement to this. It can be written that if either party demands cancellation, then there will be a cancellation of the sale agreement. This can be done by writing it in the agreement itself or any other document attached to it.
Certain conditions should be met to finish the cancellation process
Some conditions are as follows:
- Both parties must agree on the fact that they want to cancel their sale agreement.
- The said party must have some reason for requesting for cancellation of a deed, such as a default in payment or some fault committed by the other party. Or it can be due to forgery, fraud, or force.
- The party who wishes for cancellation must have legal right over his property being sold, or otherwise, he cannot get done with the cancellation process.
Difference Between Sale Deed and Sale Agreement
It’s important to distinguish between a sale deed and a sale agreement.
- A Sale Agreement outlines the terms and conditions under which the sale of a property will be executed in the future. It shows the intention of the seller to sell the property to the buyer but does not transfer ownership.
- A Sale Deed, on the other hand, is a legally binding document that confirms the immediate transfer of property ownership. The sale deed comes into effect once it is signed and registered, while the sale agreement is merely a promise of a future sale.
Legal Importance and Implications of a Sale Deed
The sale deed not only serves as legal proof of property ownership but also ensures that the buyer gains full control over the property after clearing any dues or legal hurdles. In cases where the sale deed is lost, a certified copy can be obtained from the Sub-Registrar’s office. If the transaction turns out to be fraudulent or voidable, the sale deed can be canceled under certain conditions specified by the Indian Specific Relief Act, 1963.
Conclusion
A sale deed is a vital legal document that guarantees the transfer of property ownership from the seller to the buyer. Without it, the property transaction is incomplete and not legally binding. Therefore, both parties must ensure that the sale deed is properly drafted, executed, and registered to avoid future disputes.
By understanding the sale deed and its components, buyers can protect their property rights and ensure a smooth and legally compliant property transaction.
FAQ’s
Two parties involved in the sales deed are the buyer who is willing to purchase the property and the seller who is willing to sell his property.
No, you need a lawyer to register a sale deed. Without a lawyer, you cannot initiate the process.
The basic requirements are the details of the parties, details of the property, rate of the property, and advance if taken any.
No, you do not need nominees, but you need witnesses(both the parties) to get a sales deed registered.
