Essentials of a Sale Deed Format in India

Ashish M. Shaji

21 May, 2021

Sale Deed denotes the performance of a legal document required for validating a transaction of purchasing a property between a seller and purchaser. It is regulated under the provisions of section 54 of the Transfer of Property Act 1882^[1]. In this article, we shall discuss the sale deed format and the process to draft it.

What is Sale?

Sale refers to the transaction of transfer of ownership in exchange for a price, paid or promised or partly paid or partly promised. In Sale, a seller decides to sell a property to another person on an immediate basis, and if the transfer is made for some future date, then it will be called an agreement for sale.

Sales Deed is a written document that serves as a legal proof of transfer and will include details concerning transfer of ownership. Further, it is enforced by the provisions of the registration act and is made on a non-judicial stamp paper of a particular value as specified by the government. 

The parties to this deed includes seller or transferor and buyer or transferee. Both parties must get the deed registered within 4 months time of execution and sign it.

What are the benefits of a Sale Deed?

The benefits of this deed are as follows:

• Avoid fraudulent transactions

A registered deed allows the regulatory authorities to keep an eye on any fraudulent transactions concerning properties.

• Evidentiary value

Such a deed has evidentiary value, which means either of the parties can establish the validity and the title of the document in a court of law.

• Creates title

Such deed establishes title over the new owner of the property.

• Easier taxation

Such deed contains the details about the cost involved in transferring the property, which makes the process of calculating tax easier.

What are the essential components of a Sale Deed Format?

The essential components are as follows:

• Name and the details of the parties;
• PAN details;
• Latest Photographs of the parties;
• Consideration;
• Tax Liabilities;
• Representation and Warranties;
• Absolute Partial Rights;
• Payment of Stamp Duties;
• Registration Fee Details;
• Indemnity;
• Name of the person paying Stamp Duty;
• Dispute Resolution;
• Governing Law;
• Description of the property and its schedule;
• Signature of Parties;
• Signature of Witnesses;
• Details of the witnesses.

How to draft a sale deed?

The process to draft and register is provided below:

Discuss Requirements-

The applicant should seek the assistance of a lawyer to know the requirements of this deed.

Draft a Sale Deed-

Now, based upon such discussion, lawyer will draft the deed in 3 to 4 days, and afterwards, he will send the draft to you for review and approval.

Print the Deed-

Once it is approved, the lawyer will get the deed printed on a non-judicial stamp paper of the value prescribed by the government.

Fix appointment with the sub-registrar-

Fix an appointment with the sub-registrar within whom the property is located.

Register the deed-

The applicant can then visit the sub-registrar’s office along with his lawyer and two witnesses to sign the document. It is worth mentioning here that if you don’t register this deed then you are taking a huge risk as an unregistered deed can’t be submitted in a court of law as evidence. If any dispute arises in future with respect to the ownership, rights, liabilities of the property then you cannot use the deed to be submitted as evidence. You won’t be recognized as the rightful owner.

Issuance-

Finally, the sub-registrar issues a registered deed to the applicant.

Mandatory Disclosures to be made

According to section 55 of Transfer of Property Act, seller and buyer must make certain disclosures and representations in the Sale Deed. A seller needs to make the following disclosures to the buyer:

• Any material defect in the property;
• Defect in Seller’s title;
• Third party claims;
• Any defects that cannot be discovered by the buyer with prudence or ordinary care;
• Disputes regarding which the buyer is unaware;
• To produce all documents required by the buyer regarding the seller’s title for examination;
• To answer any questions raised by the buyer about the property;
• Execution of the conveyance or sale deed after the payment;
• To take care of the property and documents until the property is delivered;
•  Should offer the property’s possession in the manner accepted by the buyer;
• Make payment and clearances of all government charges and rent accrued till the date of possession delivery;
• Ensure nil encumbrance or lien over the property.

Conclusion

In a nutshell, sale deed is an essential document that validates the transaction of purchasing a property between a seller and purchaser. Further, it is enforced by the provisions under the Registration Act of India and is executed on the Non-judicial stamp paper of a specific value.

Read our article: Sales Deed Registration: Process