Are you looking at how a Sale Deed works in India? What is the importance of a Sale Deed document at the time of property transfer from the seller to the buyer? Explore the intricacies of the Sale Deed Act in this article.
Introduction to the Sale Deed in India
A Sale Deed in India is a legal written document providing evidence of property ownership. It is a type of deed that transfers the ownership rights of a property from the seller (transferor) to the buyer (transferee). In other words, it is a document that proves the transfer of property ownership rights from an existing owner to a new owner.
A sale deed is a legal document that showcases the transfer of title, rights, and ownership of a property from a seller to a buyer. A Sale Deed in India is generally used when the real estate is being sold and includes information about the real estate’s seller and buyer, the description of the property, and any other pertinent information. The document names all parties involved and indicates that the Deed transfer occurs of free will. A seller’s deed is a legal document transferring the property’s ownership from one party to another. It is a type of document that also verifies the voluntary transfer of the property’s ownership rights.
Contents of a Sale Deed Document
As per the Sale Deed in India Act, the contents of a Sale Deed Document
- The names of both the parties involved in buying and selling the property
- The description of the property
- The price of the property agreed upon
- Signatures of the parties involved in the transaction
- Signature of concerned witness to the contract.
The Sale Deed Act in India
As per provisions of Section 54 of the Transfer of Property Act of 1882, commonly known as the TP Act, a sale is defined as the transfer of ownership of immovable property for a price. However, a Sale Deed must contain the following significant elements to consider a valid sale of the property. The elements are:
(a) The subject matter of the transaction/ transfer, which is the property
(b) The previous owner, that is, the seller transferring the property
(c) The new owner who is obtaining the ownership title from the seller or the transferor
(d) The consideration is the sum paid or payable by the buyer to the seller, which may be entirely paid, or promised to be paid, or partially paid and partly promised to be paid.
(e) The act of transferring the property ownership rights to the buyer from the seller.
By the provisions of the Indian Contract Act of 1872, it is mandatory that the parties involved in the transaction of the property sale, that is, both the buyer and the seller, must be competent to enter into a contract. The three main points that highlight the competency of any party to the contract are as follows:
(a) They have reached the age of maturity;
(b) They are not of unsound mind; and
(c) They are not barred from entering the contract by any law or court judgment.
To be valid and enforceable, a Sale Deed in India must include a complete and accurate representation of both the parties involved, that is, the seller and the buyer, as well as the subject matter, that is, the property being sold to another party. If there is a mismatch in the description of or identity of the property, it is only most likely to hamper the originality of the seller’s title. The buyer obtains a deed from the seller to preclude any future liability or conflicts, provided that the buyer promises to pay the consideration in part or whole.
Mandatory Disclosures by the Seller to the Buyer
Though the buyer in a Sale Deed could be responsible enough as to the knowledge of the terms and conditions of the transaction, however, according to the provisions of Section 55 of the Transfer of Property Act of 1882, a seller needs to mandatorily make disclosures and fair representations in the document to the buyer. This would entitle the buyer with the power to enforce an act in the event of a violation of the conditions specified therein. The following are the statutory information and representations that the buyer must obtain from the seller:
(a) The seller who had absolute ownership of the property, now, after the Sale Deed document, shall entitle the ownership rights in favour of the buyer of the property.
(b) Full disclosures in case of substantial flaws, third-party claims or conflicts, if any, are to be made to the buyer.
(c) The seller is also required to be competent enough to convey the property’s ownership title in favour of the buyer.
(d) The property to be transferred should be restriction-free and without any claims.
(e) The seller must transfer and hand over the title in the Deed from his custody to the buyer. Besides, the complete transfer is to be made on full receipt of the consideration and handing over the physical possession of the property.
(f) All government dues must be paid and cleared by the vendor.
(g) The seller’s commitment is needed to execute the further paperwork that suitably safeguards the buyer’s rights during the transfer of municipal records and other utility services to the buyer.
In addition to securing the representations mentioned above from the seller, the buyer is also urged to get indemnification in the Sale Deed from the seller. This is mainly for the benefit of the purchaser of the property against any defect in the title of the property or breach of the Sale Deed’s representations, terms and conditions.
Conclusion
While transferring property between two individuals is easy, it gets a little more complicated when there are multiple owners. A Sale Deed document, therefore, is one such document that acts as an aid to this issue during the property transfer.
The Sale Deed is a handy document, especially in a dispute. A sale deed provides an assured level of protection and a legal way of selling the home to a new owner. Hence, a Sale Deed is a must for any property you intend to sell because it will serve as a legally binding document that provides evidence of true property ownership rights. If you are looking for a Sale Deed registration, please visit Vakilsearch to guide you through the process.
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