Vinayak Realtech

If you plan to buy a real estate property, you must know that it involves many legal steps. Any mistake in the legal procedures can raise a question on the ownership and bring legal disputes. Among several documents, the sale deed is one of the most important documents. The paper is designed to state that property ownership is transferred from one person to another. Without a sale deed, you can buy and register a property. In today’s comprehensive read, we will highlight its type, key components, and other factors.

Let’s begin!

What is a Sale Deed?

The sale deed outlines the terms and conditions of the deal. It mentions critical information like the property price and property description. It also states how and when the property ownership will be transferred to the buyer.

As the sale deed gets drafted with the mutual consent of the buyer and seller, it works as proof of the sale of property from the seller to the buyer. The property transfer is not completed until this paper is signed by two parties (buyer and seller).

As a potential property buyer, you must know, there are several types of sale deeds. For example, a deed of transfer/assignment of lease, a deed of lease, a sale deed for flat registration, or a gift deed.

However, many argue that these are not sale deeds. It is because they miss points (depending on the type of deed), like the price of the property or selling conditions. Those legal experts only consider a general sale deed as a sale deed.

A sale deed determines the legality of any property. Before signing the paper, make sure it has all the key components as follows.

Name and Address of Both Parties

The sale is all about specifying the minute details of the transaction, and it starts with mentioning the name, age, address, and contact number of the buyers and the sellers.

Detailed Description of the Asset

The sale deed aims to maintain the transparency of the sale. To do this, it contains a detailed description of the property. For example, complete address of the property and description and type of property (residential flat, Kothi, bungalow, shop, office, etc.). The document also must contain the property dimension and schedule.

Price of the Property

A perfect and valid sale deed has information regarding the price of the property and the mode of payment, such as through a cheque, a demand draft, or an online transfer.

If you have (as a buyer) paid an advance to book the property or as part of the payment, the document also contains that amount and the payment date.

If the property is being sold on an instalment payment, the instalment amount and the date of each instalment should also be mentioned in the deed. It should mention the receipts of the sale transaction.

The Time of Transferring the Ownership

One of the main aims of a sale deed is to specify the time of property ownership. A sale deed must mention the specific time when the ownership, title, and all the documents related to the property will be handed over to the buyer. It should also state the actual date of registration and delivery of possession of the property.

Indemnity

As a buyer, check that the asset 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. It will help you to be saved from any fraud in the future.

While checking the indemnity, make sure that the seller has paid all the related costs of the property. It includes expenses like property tax, electricity bills, water bills, society and maintenance charges and all other dues before the sale deed is executed. If the seller has taken any loan (home loan or mortgage) against the property, it must be paid before drafting the sale deed. This clause will help you get legal protection if the seller has made any due payment against the property.

Registration

A sale deed does not get legal validation if it is not registered in the sub-registrar’s office. In the sub-register office, the buyer and seller must sign the document in front of their witnesses. The procedure requires a handsome payment for the stamp duty and registration fees. The amount can be shared among two parties with mutual consent.

When and How to Use A Sale Deed?

The best time to use a sale deed is during the property sale. It is being made once the price and other factors are mutually decided. Remember, signing this document means the property is sold, and ownership is being transferred.

Take note, this document is not only crucial for this time but also. If you plan to resell the asset, the buyer might ask for it as legal proof of ownership. Hence, keep this document carefully for the rest of your life.

Documents Required for Executing a Sale Deed

For a flawless sale deed, always hire a dedicated lawyer and gather all the documents prior. To reduce hassle and contribute to saving time. You will require documents such as

• Original Property Title Deed
• Sale Agreement
• Encumbrance Certificate
• Identity Proofs of Both Parties
• Address Proofs of Both Parties
• Property Tax Receipts
• Completion Certificate & Occupancy Certificate
• Power of Attorney, if applicable
• Bank Release Certificate (for properties with loans)
• Aadhar card & Pan card ( For KYC) 

Common Mistakes in Sale Deeds

• Missing the property details and encumbrances before drafting the sale deed.
• Not mentioning the property details like measurements and boundaries. It leaves room for confusion and legal disputes.
• Missing details regarding indemnity or possession terms. It can create ambiguity.
• Failure to secure approvals, like those from municipal authorities. It makes the deed invalid.
• Not following the right legal format and language.
• Hiding the legal liabilities, such as loans or legal disputes.
• Not specifying the payment terms. It creates future financial disputes between the buyer and seller.
• Missing a clear resolution process is one of the common mistakes. It can result in a lengthy legal battle in case of a dispute.
• Not updating the sale deed as per changes, such as in property details or payment terms.

These mistakes are quite common and lead to long legal battles. Avoid these mistakes for safe ownership.

Sale Deeds: Wrapping Up

A sale deed is not just a legal document. It is the legal foundation of any property transaction. From finalising the transfer of ownership to ensuring both parties’ rights and responsibilities, it has loads of significance. It contributes important factors like understanding its essential elements, registration process, and even cancellation.

If you are stressing over how to handle it accurately, connect with us. We offer every possible assistance (from papers to legal aid) to our buyers for a smooth deal.

Drop a query to learn more!