What are the Components of a Sale Deed?

Last Updated at: Nov 07, 2022
What are the components of a sale deed?
The Andhra Pradesh State Government recently launched the Layout Regularisation Scheme (LRS) to regularise unauthorised layouts in the state. Individual plot owners in unapproved layouts having registered sale deeds before August 31, 2019, can apply under the scheme. 


A sale deed is one of the most essential legal papers in a real estate purchase or sale. It is regulated by the Registration Act and is an essential document for the buyer or the transferor as well as the seller or the transferee. Unless the buyer and seller sign the sales document, the purchase or sale of the property is not complete legally. Usually, a sale deed is signed only after both parties are satisfied and comply with the terms and conditions as said in the agreement. To begin with, the buyer and the seller agree to prepare a draft sale deed on non-judicial stamp paper. This value of the sale deed will vary from state to state within a country and as recommended by the Stamp Act of the particular state jurisdiction.

In addition to selling an asset, people tend to either mortgage or lease their real property, so the agreement must indicate if it’s a Deed of sale or a mortgage deed.

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Components of Sale Deed

  1. Signatories: Once the following details in the sale deed is agreed between the two parties the sale deed is ready to be signed. It would also require at least two witnesses to sign the sale deed, with all their details included.

2. Details: A sale deed has almost all the details required to carry out the purchase or sale of a property. Beginning with the basic information, such as the given names of the buyer and the seller, and their addresses, the other information in the draft sale deed will also include the description of the property being sold, including its id number, its precise location, the address, the square footage information of the property and the information of the building if it is a residence.

3. Encumbrances: Most importantly the sale deed would require the seller to certify that the property under sale is free from any encumbrance and without any lien. 

4. Existing Loan: If there is an existing loan taken against the property the seller should settle the loan and then only execute the sale deed. However, it is always better for the buyer to check this with the local registrar’s office. 

5. Total Consideration: Besides, the draft will also include the total sum to be charged for the purchase/sale of the land, the advance payment sum if any, the dates on which the payment is received, the time allowed for the payments, the specifics of the payment transactions, etc. 

The selling deed is registered at the jurisdictional office of the sub-registrar. The testimonials should also be present at the time of filing. Their presence is mandatory in addition to the buyer and seller of the property on sale.

Sales Deed – Legal Procedures 

The Sale Deed draft is written and published by “stamp act” on a non-judicial stamp document. According to the stamp rules, it is the buyer’s responsibility to pay the stamp duty. The final major sales document is prepared after completion of all these formalities. Some legal formalities are as follows:-

  1. All Sale Deed pages must be signed
  2. Two witnesses give their full names, ids and signatures to witness the sales deed
  3. The property includes registration with the office of the judicial sub-registrar.
  4. At the time of registration, all the parties involved and concerned should be available.
  5. All documents are required in their original state.
  6. The buyer’s identities for authenticating the document, such as their photographs, fingerprints and signatures, must be stamped onto the paper.
  7. The original document should be registered in under four months from the date of execution. When failed to do so, the original registration fees may be charged ten times as penalty.

The buyer shall be responsible for the payment of the stamp duty and the entry fee.

Advantages of Sales Deed

  1. Avoid fraud: Filing a deed sales enables the authorities to track the fraudulent property transaction. 

2. Avoiding ambiguity: The sale deed clearly defines the parties’ acts, rights and obligations thereby reducing ambiguity between the contracting parties.

3. Easy Taxation:  the expense of selling the property can be calculated in a specific manner. It will allow making the taxation process simpler.

4. Provides legal protection: If the value of the asset involved is high, a person often needs a legal document. The registration form has legal merit and will confirm the form ‘s title to any case. It thus serves as statutory protection in the rent agreement form. 

5. Establishes title: The sales deed will properly determine the property title.