A sale deed is a legal document that contains details of transfer of property ownership from a seller to a buyer. This is one of the most valuable legal documents while purchasing or selling a property. This document needs to be registered mandatorily and is governed by the Registration Act.
Draft Sale Deed
A draft Sale Deed, containing full details of the parties, advance amount paid, mode of balance amount payable, receipt of the balance amount by the seller, handing over the original documents of the property, handing over the possession of the property, handing over the authorization letter to transfer power and water meters, signing of the application for transfer of Khatha, title of the seller of the property, indemnifying the purchaser in case of defect in the title, easement rights, will be prepared by the purchaser’s advocate. Such draft Sale Deed should be captioned as draft Sale Deed and shall be signed by the purchaser’s advocate.
A copy of the draft Sale Deed will be given to the seller for his approval. The seller and his advocate will verify the draft sale deed and approve it or may suggest suitable deletions, additions or amendments. The purpose is to bring forth the correct intention of the parties to the Sale Deed.
On approval of the draft Sale Deed, the same has to be prepared on a quality or a document paper. In Karnataka it may be prepared on good quality paper like bond paper or green paper and the stamp duty may be paid by way of demand draft or pay order or cash. The exact amount of stamp duty should be ascertained from the Sub Registrar office. Purchaser is liable to pay the Stamp duty as per value stated in the documents or as per the Sub- Registrar office value whichever is higher.
Sale Deed vs. Title Deed
A sale deed is a legal document that transfers the ownership of the property from the seller to the buyer, during a sale. When a property is sold, the sale deed confers title to the buyer.
A title deed is a legal document that can also be used to transfer the ownership of a property from one person to another in instances such as a gift, exchange, mortgage, etc. A title deed is useful when a person does not want to sell a property, but may want to add another person to the title. A title deed generally includes a description of the property that is being sold and the name of the person who legally owns the property. It can also have names of multiple owners.
Agreement of Sale
An agreement of sale is a contractual agreement between the seller and the buyer before the actual sale takes place. It usually contains details about the terms and conditions of sale of a property. This document also includes the amount at which the property is to be sold, often known as sale consideration, and the future date of full payment.
Both the seller and the buyer must understand the terms and conditions listed in the agreement of sale and comply with them throughout the sale process. This enables the process of sale to go through without any obstacles. The agreement of sale is signed before the sale deed is executed and the sale deed is drafted based on the agreement of sale.
If I am a buyer, what precautions must I take before signing the Sale Deed?
1. Make sure No Encumbrances exist on the property. If any outstanding Encumbrances exist (for example, any Bank Loans that have not been cleared), then the Seller’s must take care of these before the purchase.
2. Make sure all taxes, cess, electricity and water charges have already been paid by the Seller.
PREPARATION OF SALE DEED
It is a life time ambition of every individual to have a shelter over head. This ambition was achievable in the past only by a very few people in view of financial and other constraints. Due to technological development and social changes with higher purchasing power, nowadays, people could own house and house sites with much ease.
A person may own an immovable property by way of acquisition, succession, transfer or assignment. One of the modes of transfer of immovable property is by way sale and the execution of Sale Deed results in the transfer of right, title, interest and ownership in the property transferred in favour of the Purchaser. Transfer of immovable property in India is governed by the provisions of Transfer of Property Act, 1882.
