Requirements of a Sale Deed

Last Updated at: Oct 09, 2020
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sale deed

A sale deed is the most crucial document of your housing deal. It is the document that you need to provide as proof of ownership. Many people, however, mistake it for other similar documents such as the Sale Agreement or the Deed of Assignment.

To understand it better, a sale deed, or the conveyance deed, is one that is drafted at the time of sale. It is a document that renders the sale complete. Through the sale deed, the seller transfers the rights of ownership of the property in question to the buyer. Once the document is drafted and signed, the ownership rights completely get transferred to the buyer in the deal.

Also, any pending impediments, such as property tax, water and electricity charges and so on, needs to be paid in full before the sale deed is formatted. Hence, the sale deed usually contains all such relevant information pertaining to the property under sale.

As the document holds so much importance, a highly skilled individual would need to draft it, rather than anyone with a little knowledge of what it conveys or signifies. Here is how a sale deed need to be drafted, for it to be legally binding and properties transferred without any hassles.

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Why formatting a sale deed needs an expert?

Drafting a sale deed was once the work of skilled draftsmen who used to apply their education and expertise in law to draft unique documents to finalize a deed. In those days, the draftsmen and lawyers used to consider every deed as separate (since the copy-paste option was, of course, not available) and draft it according to the demands of circumstance.

If you, thus, notice older documents written in hand, or even those typewritten, the documents of sale had clarity and consequence, so as to make it completely and irrevocably binding to the law.

This skillful execution is now lost mostly, with sale deeds being churned out using shoddy templates and just altering the names of the seller and buyers.

However, what many of us do not understand is that what may or may not be ‘binding’ and compulsory, may not be so, for the other person, and thus, one is required to study the sale deed carefully, examine it with the help of a lawyer or any expert in sale deeds, before signing the same, or even drafting it for approval.

Sale deed is the Conveyance Deed

The term ‘Conveyance’ denotes transfer of property between two living persons or ‘Inter-vivos’. Conveyancing a deed for sale, is thus, done in accordance with the ‘Transfer of Property Act, 1882’ and the Registration Act, 1908 and any deed prepared should adhere to the rules prescribed by the Act.

The conveyance document describes what all has been agreed upon by both properties regarding an immovable property under question, and what settlements need to be paid by the buyer to the seller. Any person signing such deed, will be legally bound to the contract, and cannot, at any point of time, retract from the conditions laid down on the deed.

It is, thus, essential for the persons concerned in the deed to thoroughly examine the document, and entrust it to a legally adept expert to ensure nothing is amiss or not agreed upon. Several legal terminologies are such that only a legal expert or one with the proper qualification would be able to do justice to it and bring into notice anything which is not correct.

Elements of a Sale Deed

A sale deed contains all relevant information pertaining to the sale, and is the most valid and crucial document in any sale of immovable property.

The Sale Deed needs to be drafted on a non-judicial stamp paper of value as set by the state government. Each state has a predetermined value of stamp paper for drafting sale deeds.

Apart from the stamp papers required to draft the deed, any outstanding amount for legalizing the deed can be paid through Challan, stamping or any other means through which the state government demands.

The sale deed, at the time of drafting, should have the following details:

Type of deed to be prepared: The property can either be sold, mortgaged or leased. Depending upon the requirement, the ‘sale deed’ will carry the name as ‘Deed of Sale’ or ‘Deed of Mortgage’ and so on.

Name and address of the executing parties: Full name, address and any other information such as age and residence address of the parties need to be specified at the beginning of the document. Any sale deed is not valid until it carries the names of both the parties in their relevant places – as seller and buyer or lessee and lessor.

Property description: Any immovable property under sale will need to be described, with address, if it’s a house, number of rooms and so on, and plot area, construction area, any additions to it, number of balconies, and anything else that is deemed relevant need to be included.

Sale agreement: This is a document wherein both parties agree to ‘sell’ and ‘buy’ and also give a detailed account of what compensations needs to be paid, and at what date, any advance is paid, and agreed and signed upon by both parties. An agreement of sale proceeds the sale deed, and is a legally binding document, as the sale deed itself. The mode of payment and the date needs to be mentioned to prevent any disagreements at a later date.

Delivery and the passing of title: The signing of the sale deed by both parties (on each page of the document) irrevocably transfers the title of the property to the buyer, to and when they have adhered to the compensation and paid it in full. Any rights of the property now legally will belong to the buyer.

Registration of the document: The registration of immovable property is done in accordance with the Registration Act, 1908. The parties (buyer and seller) need to be present in person, with all relevant documents (or their representatives or authorized agents) in the local sub-registrar’s office to sign/thumb print on the sale deed, and also to close the deal.

Proof of Registration: The proof of registration/a certified copy of the registered property with the name of the buyer, will be available from the office for future reference.

Each and every single detail needs to be thoroughly analyzed and checked by an expert before signing to prevent any legal hassles.

A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.