A sale deed is a legal document that shows how property rights, ownership, and title are transferred from the seller to the buyer in a real estate transaction.
It's the most important document because it serves as proof for both parties. The buyer and the seller, the transferee and the transferor, both need it. Both parties must sign deeds which state a legal agreement between them.
Did you know?
According to Registration Act, 1908, the sale deed is one of the crucial documents for selling and purchasing property across India.
What is a Sale Deed?
A sale deed protects both parties from legal actions, and the deed safeguards the interests of both the buyer and the seller. This kind of law protects the interest of citizens, buyers and sellers. On paper, having a detailed description of the property, including its square footage and location, is a significant advantage for the buyer.
Additional Benefits of a Sale Deed
- It turns the sale into a legal document; a sale deed can be enforced in court.
- A sale deed saves time because it lists all the due money.
- In addition, the presence of a registered and stamped legal document ensures that your property will not be taken for granted. This makes the sale process more stable and comfortable.
Information Included in a Sale Deed
Also Read: Best Business Ideas to Start in Bangalore
All of the following information should be included in the selling deed:
- Each buyer and seller's full name, complete address, contact information, age, and occupation are included in the description.
- A deed of sale form includes the property's ID number, accurate address, square footage, and other details.
- If the property being transferred has no outstanding debts, lawsuits, or charges, this clause is called an "indemnity" or "encumbrance." Besides, the vendor promises to absolve the purchaser of any future claims.
- To proceed with the sale, the seller must pay off a pending mortgage on the property. Inspection of all essential documents is available before registering.
- When a transfer is completed, the price at which the sale consideration is paid is known as the sale price. Any advance payment should be included here if applicable. The parties should agree on payment dates, methods of charge, and other specifics in advance of the transaction.
- Both numbers and figures should be used when describing pricing and transaction details. Additionally, the sales receipts from the transaction should be included in the sales document.
- This should be included in the deed: The date of handover to and possession by the buyer.
How To Obtain a Deed of Sale?
The following steps are involved in the sale of property by sale deed:
Step 1: Understanding your need. Hire a lawyer and go over your needs with them.
Step 2: The attorney will write the sale deed for your review and approval within three business days based on your responses.
Step 3: The sale deed will be printed on non-judicial stamp paper after you have approved the draught.
Step 4: Scheduling a meeting with the sub-registrar: The attorney will schedule a meeting with the office of the sub-registrar whose jurisdiction the property is located.
Step 5: The sale deed will be registered when you, two witnesses, and an attorney go to the sub-office registrar to sign it and pay the registration fees.
Step 6: The registered sale deed will be issued by the sub-office registrar after the deed has been signed and the registration fees have been paid.
Also Read: Best Eco-Friendly Business Ideas in India
Sale Deed Requirements
- The selling deed must include the purchasers' and sellers' names and addresses. A complete address and description of the property must be provided.
- The buyer and seller must agree on a sale price before signing the contract. Therefore, the selling paperwork must specify the amount due by the buyer upon closing of escrow.
- The advance payment should be indicated in the sale agreement if it has already been made, and the mode of payment must be clearly stated.
- The sale deed must specify the date on which property ownership will be transferred to the buyer. Additionally, the buyer must be given all paperwork relating to the home.
- There must be no encumbrances on the property's title. A sale deed is not legally binding unless it is enrolled in the sub-office. The buyer, seller, and witness must be present in the registrar's office on the day of the deed's enrollment.
- Stamp duty and registration costs must be paid to complete the registration process.
Types Of Sale Deeds
1.The Deed to the Property
Ownership, title, and other property rights are transferred from a seller to a buyer through a sale deed under section 54 of TPA (Transfer of Property Act). It is an essential document for both buyer and seller because it formally demonstrates the transaction's validity.
2.Title to Real Estate Mortgage
In a mortgage deed, under section 58 of TPA, all vital information concerning the loan is included, including the persons involved, the collateral property, the loan amount, and so on.
3. Deed of Lease
To complete a lease, it is necessary to have a lease deed. Primarily, it attests to a lessee's ownership of the leased property. A little additional information about the Transfer of Property Act's lease provision under section 105 of TPA.
4. Deed of Gift
A gift deed is a legal document showing a gift has been given. Section 122 of the Transfer of Property Act, 1822, allows a donor to transfer an existing piece of property to a recipient through a gift deed.
5. Deed of General Warranty
A universal warranty deed is frequently used in residential real estate transactions. The seller or grantor is legally obligated to honour the warranties communicated and committed under the contract.
6. Deed of Limited Warranty
A special warranty deed does not as well protect the buyer as a regular one. The seller's guarantee does not cover the property throughout its existence but only during that time when the grantor held it. This guarantee is issued to the buyer or grantee.
7. A Deed of Adoption
Creating a parent-child relationship between two persons who are not biologically related is called adoption. Under Hindu Adoption and Maintenance Act, 1956, rights, advantages, and responsibilities are given to the adopted child by the adoptive family.
8.The Deed of Quitclaim
Typically, a quitclaim document is signed by family members, divorced spouses, and friends who have a personal connection to each other. In most cases, it is performed by persons who know each other.
9.Trust in the Deed
It's a transaction in which a trustee is given a piece of property, such as a promissory note, as collateral for a debt. As per section 3 of the Indian Trust Act 1882, the trustee has the authority to sell the property if the trustee fails to perform their duties.
10. Deeds Requiring a Court Order
This deed is done without the owner's consent because of a court order. When the sellers cannot pay for the property, these deeds are created and executed without their permission.
11. Fiduciary Deed
The term "fiduciary" refers to the connection between a trustee and a beneficiary, particularly in the context of a deed.
12. Deed of Grant
For a predetermined fee, the seller issues a grant deed transferring real estate ownership from them to the buyer. Unlike a warranty deed, it does not cover title defects but does guarantee that the seller has full possession of the property and that it is free and clear of all obligations, under the Government Grants Act 1895.
13. Conveyance Deed Number
It is possible to transfer property ownership via a conveyance deed in several ways, including a transfer of ownership in the form of an exchange or a lease, for example. It can also be called a gift deed, a mortgage deed, a lease or sale deed, or a deed of trust.
14. Authority to Act in Another's Name
A deed of power of attorney gives someone the authority to act on your behalf.
15. Deed of Relinquishment
In a legal document, a relinquishment deed, rights, titles, and interests of a legal heir are revealed for the benefit of third parties.
Documents Needed For a Deed Of Sale
Here is the list of required documents for the sale deed.
No Objection Certification (NOC)
Developers may need as many as 19 NOCs from various authorities when they plan to build a house.
- This document is required to secure a mortgage and is signed by the builder or housing authority representative instead of a stamp-paper agreement.
- You'll find all you need to know about your purchase in this document: the fine print, including payment terms, possession deadlines, and other essential details.
- The buyer receives this paperwork from the developer as proof of ownership.
- Keep the builder's original payment receipts when you purchase a new home.
Property Tax Receipt
- You must make contact with the previous owner. Verifying the property's legal status is much easier with its help.
- A statement that the property is free and unambiguous must be included in the encumbrance certificate, which is part four of the application.
Certificate of Completion
- These documents attest that previously authorised plans constructed a structure.
- The occupancy certificate attests that the structure was constructed under an approved blueprint.
A sale deed is a legal document demonstrating property rights, ownership, and title transfer from the seller to the buyer in a real estate transaction. The property's ID number, exact address, square footage, and other specifics are all included in a sale deed.
The registration of new properties necessitates using this document, and a deed is also required if you intend to sell the property in the future. Once the sale document has been recorded, the final step is to compare the offices of the Sub-Registrars.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.