The sale deed is an important document that completes the process of buying, selling or transferring a property from one party to another. It consists of all the important details of the development and the seller. So, if you are a first time home buyer, it is important to understand the basics of this crucial document to safeguard yourself from financial fraud or bogus sellers.
What is a sale deed?
A sale deed is a document that stands as legal proof of ownership of a property. It’s also called the conveyance deed or the deed of sale. This deed is governed by the Registration Act of India and is equally important to the buyer and seller of the property.
The deed is legally complete only when both the buyer and the seller sign the document after agreeing to the terms and conditions stated in it. It essentially provides legal protection for the buyer against any duping or bogus selling of property.
What are the components of a sale deed?
Before being legalised, the sale deed must cover all the relevant information including the seller’s and buyer’s full name, address and age details, to name a few. Following are some of the other mandatory details that the deed must include:
Details of all the parties involved: Apart from the full name, address and age details of both the parties involved, the sale deed should also clearly address both the parties as the seller and the buyer.
Details of the property sold: All the information regarding the property, such as the identification number, location, construction details and total plot area need to be mentioned in the deed.
Sale agreement: The sale agreement must include the total amount to be paid for the purchase or sale of the property, any advance amount paid earlier, dates and modes of payment, attached with the bank transaction details. Both parties must mutually comply to the terms and conditions listed and sign this agreement which precedes the property deed.
Indemnity clause: A clause must be present in the deed stating that the seller has cleared all the bills such as water bill, property tax, cess, electricity bill and other maintenance charges. If the property was originally purchased with a home loan, the seller must repay the loan and get the papers clear of any dues or encumbrances. It’s the buyer’s responsibility to verify all these details before making the purchase.
Default clause: As the name suggests, the default clause states that if there is any default either on the buyer or seller’s part, the defaulting party must pay a penalty to the other so that the execution of the sale deed is unaffected.
Delivery details: The deed must specify the time of handing over the possession of the property. This will ensure a speedy process of buying your first home leaving no possibility for any delay.
Transfer of title: A clear indication of the ownership of the property that is transferred from the seller to the buyer must be cited in the deed. This ensures that all the property rights are passed on to the buyer.
How is it prepared?
The deed of sale is drafted on a non-judicial stamp paper as prescribed by the Stamp Act of the respective state. The buyer of the property is liable to incur the stamp duty charges that are applicable in the concerned state. There must at least be two witnesses present during the time of signing the deed. The witnesses will be required to furnish their full name, address, and signature wherever necessary.
How does a sale deed work?
On completion of all the above formalities, a sale deed is finally ready to be recorded under the Registration Act of 1908. It needs to be recorded at the jurisdictional registrar office in the state where the property is located. All the concerned parties must be physically present during the signing of the agreement. In case the buyer can’t be physically present, he can give the power of attorney to a relative or a friend to sign and present the documents on his behalf.
All the mandatory documents must be presented in original form as photocopies are inadmissible. Keep in mind that the documents should be presented for registration within four months from the date of execution of the sale deed. In case, the deed is not registered within the stipulated time frame, a grace period of another four months might be granted by the registrar on payment of a penalty.
With all the information you’ve gathered, be sure to take your own time to scrutinise the document to its last detail in order to avoid any ambiguities in the future.
Every home Lancor sells undergoes stringent legal auditing before it is sold to the customer. Our dedicated team of professionals ensures our customer’s buying experience is hassle-free.