What is a Sale Deed – Benefits, Format and How to Register Online
A sale deed is a contract that validates the transfer and sale of immovable property from seller to buyer(s). Properties are not legally valid until both seller and buyer or vendor and purchaser sign the document. Once a sale deed is signed between the two parties, the entire ownership right is bestowed on the buyer. This legal paperwork is drafted by a draftsman, rendering the sale complete.
However, besides knowing the meaning of a sale deed, you should also learn about the other particularities of the document, its format, benefits, registration process, documents needed and the differences between a sale deed and a sale agreement. Read on!
What is a Sale Deed?
A sale deed is a legal document that proves the transfer of ownership from the seller to the buyer. It is an important document that both the seller and buyer must have. The buyer and the seller must come to an agreement before this document is signed and the transfer of property is finalised.
Components of a Sale Deed
This legal document contains the following components, helping one derive discrete details regarding every aspect of transferring property ownership:
- Description of both parties: Sale deed incorporates every detail of the sellers and buyers involved in the transaction. It holds their name, age, residential address, and more. Additionally, both parties must sign in order to execute the deed.
- Property description: This part encircles information about the property you intend to buy. You will get the property location, total plot area, construction details, plot identification number, etc.
- Indemnity clause: The indemnity provision is pertinent to a resale property; it underlines that the buyer must clear all outstanding charges, previous loan, property tax, electricity bills and other maintenance charges before implementation of a sale deed.
- Payment details: It also includes information regarding the property’s selling price, details pertaining to advanced payment, instalment amount, payment methods, etc.
Format of a Sale Deed
Here’s a format of a Sale Deed:
*Image Source: Finance Department, Government of West Bengal
Benefits of a Sale Deed
A sale deed offers these advantages for both buyers and sellers:
- This contract acts as legal proof and recognition, securing individuals from legal disputes.
- This document makes the property transaction transparent and convenient as it contains various components offering every intricate detail of the seller, buyer and the property.
- The document preserves the right of both the seller and buyer involved in the property transaction.
Furthermore, you can secure your property transaction from any fraudulent act after registering a sale deed.
Requirements of a Sale Deed
A sale deed must hold these details:
- Both buyers’ and sellers’ names and addresses
- All property descriptions that are in question
- Information regarding mode of payment and advance payment
- The stipulated time within which property title will be given to the buyer
- Sale price that is negotiated and accepted between buyers and sellers.
Furthermore, there must be a mention of stamp duty and registration charges.
Registration Procedure for a Sale Deed
Following these steps for registration:
- Step 1: Firstly, compute the property value depending on the circle rate prevailing in that region.
- Step 2: Now assess the stamp duty. Stamp duty is determined based on the higher value of either circle rate or actual property value.
- Step 3: Purchase non-judicial stamp paper of the evaluated cost.
- Step 4: The sale deed is prepared and printed on stamp paper.
At this point, both sellers and buyers must make an appointment in the sub-registrar’s office and carry out the property registration. Note that two witnesses must be present at the time of registration.
Documentation Required for Getting a Sale Deed
You must keep these documents in order while registering for a sale deed:
- Title deed draft
- Sale agreement
- Completion certificate
- Encumbrance certificate
- Stamp duty and registration fees receipt
- Property tax receipt
- Allotment letter from builder/ housing board/ BDA
- Identity proof of both the parties.
- Mutation register extracts
- No Objection Certificate from the Pollution Control Board/ Airport Authority/ Electricity Department
- Joint development agreement
- Copy of municipal tax bill
Factors to Keep in Mind before Getting a Sale Deed
Here are the things to bear in mind before executing a sale deed:
- First, refrain from using a copy-paste deed. Do not get your sale deed executed by a non-expert.
- Make sure that the sale deed has an elaborate indemnity provision.
- A sale deed must be self-attested by the two witnesses.
- Intricate property details and information of both parties must be mentioned in the sale deed.
- You should not miss out on the delivery details of the property ownership.
- The property in question must have marketable titles. Also, property ownership must not be conditional.
Also Read
Differences between a Sale Deed and a Sale Agreement
It would help if you also had a well-rounded idea regarding the significant differences between a sale deed and a sale agreement:
| Sale Deed | Sale Agreement |
| A sale deed is needed for the immediate transfer of property ownership. | A sale agreement is required for the future sale of a property. |
| The Registration Act mandates the registration of a sale deed. | Depending on the state rules, you may or may not have to register for a sale agreement. |
| A sale deed is a document that has already been executed. Here, property rights are given to the new owner. | On the other hand, a sale agreement is going to be executed in future. Here, property right is given only to the person who is going to buy the property in future. |
| A sale deed incorporates information about both parties, property, payment details, indemnity details, etc. | A sale agreement holds the terms and conditions depending on which property will be sold. |
| Under the sale deed, the buyer is held responsible for any kind of risks associated with the property. | In a sale agreement, the seller is liable for any discrepancy in the property transaction. |
Final Word
As per the Registration Act of 1908, a sale deed holds utmost importance in legalising any property transaction. This legally binding document facilitates the sale and transfer of property by listing complete details of the pricing, terms and conditions of the property that is being transferred.
FAQs
Ans: If you have misplaced your sale deed, you need to visit the nearest police station and file an FIR, mentioning the details of the papers. However, owners must keep a copy of the FIR for future reference.
Ans: No, a property cannot be sold if the property owner does not own an original sale deed. There is considerable risk associated with selling a property without a sale deed.
Ans: You can locate the sale deed number on the top right corner of the agreement. It is printed in the following format: document number/ year/ initials of Sub-Registrar Office.
Ans: Yes, you can challenge a registered sale deed when required. However, you must be well acquainted with certain clauses and contact a property advocate to take assistance before doing so.
Ans: Yes, we need to have a sale deed while applying for a home loan. It is a crucial document that we need to submit to the lender that ensures the property mortgaged is free of legal disputes.
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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