Sales Deed

Sales deed is basically a legal Document that provides the transfer of property from the seller to the buyer for a specific form of valuable consideration. The consideration can be of any form of amount. Sale deed must be differentiated from gift deed. Such sale deed would be prepared for some form of considera..

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Sales Deed- An Overview

A Sales Deed is a deed by which a seller transfers his right on the property to the buyer, who acquires absolute ownership of the property. The buyer should ensure the title of the seller before the execution of the Sales Deed. Thus it is governed by registration Act and is an important Document for both the buyer or the transferee and the seller or transfer or.

Such provisions related to a sales deed is defined under section 54 of the Transfer of Property Act, 1882. Any form of transfer of ownership from one person to another person for some form of valuable consideration would come under the purview of a sales deed. This form of Document would consider the final stages of the sale of a particular property.

There is some form of transfer of ownership of property from the seller to the buyer for some form of valuable consideration. The buyer through this deed would become the absolute owner of the property.

All the respective rights, terms and conditions related to the property would be mentioned in the sales deed. If the rights are present for some form of future property then such sales deed would be an agreement to sell. In all property transactions, there is a Document known as the sales deed.

Statutory meaning of a Sales Deed

Sales deed has specific provisions under the Transfer of Property Act, 1882 (TPA). Under section 54 of the TPA, the sales deed is defined as some form of transfer of property from one person to another person for some form of valuable consideration.

Apart from this, the provisions of the Registration Act, 1908 would be applicable to Sales Deed in India. Such deed has to be registered as per the provisions of the above act. In order to be valid the sales deed has be signed by both the parties: the buyer and seller.

Such deed has to be registered within 4 months from the date of execution of the sale deed.

Advantages of Sales Deed

The following advantages can be obtained by registering the sale deed in India:

Advantages of Sales Deed
  • Avoids Any Fraud

    By registering the sale deed, there would be effective compliance carried out by the parties. Both the buyer and seller would compliant with the relevant provisions of the act by registering the sale deed

  • Avoids ambiguity

    A Sale Deed clearly defines the acts, rights and obligations of the parties thereby reducing the ambiguity among the parties to the contract.

  • Provides legal protection

    There is always a requirement of a legal Document if the value of asset involved is high. Therefore it serves as a legal protection in the form of rental agreement.

Procedure for Sales Deed Registration

The following steps have to be carried out for registering a sale deed in India:

  • Know the Circle Rate

    First and foremost, the area of the property must be based on the circle rate. Hence, it is important to understand the circle rate of the property. The circle rate of the property is determined by the revenue department of the State Government or by the local development authorities where the sale is going to occur.

  • Calculate the Respective Stamp Duty

    In the next step; the applicant would have to take estimation of the circle rate and the respective stamp duty. After this a non-judicial stamp paper requires to be obtained by the parties.

  • Preparation of Sale Deed

    In the next step, the sales deed must be drafted by the parties and typed on the stamp paper.

  • Get it registered with the Sub-Registrar

    In the next step, the parties must get the sale deed registered with the sub-registrar. Along with this, the requirement of witnesses (2 witnesses) must be present.

What are the main components of a Sales Deed in India?

The following are the components of a sales deed in India:

  • Parties Information

    First and foremost, the sales deed must have as much as information related to the parties in the sale deed. This will include the name and address of the buyer and seller of the sales deed. Apart from this, other relevant information must be included in the sales deed.

  • PAN information of the buyer and seller

    This clause would contain information related to the permanent account number of the parties of the sales deed.

  • Consideration

    As per the Indian Contract Act, 1872 such information requires being present. There has to be some form of consideration given by either party. In such case, the consideration provided by the buyer would be the sale price for the property and the consideration provided by the seller would be the immovable property.

  • All forms of representations

    The Sales deed must ensure that all forms of representations are present in the form of writing. All warranties must also be attached to the property.

  • Encumbrance Clause

    Apart from the above, the sales deed must contain the clause related to encumbrances which are attached to the property. The property must be free from any form of encumbrances which arise. This would be related to the positive covenants arising from the property. Encumbrances would relate more to negative covenants arising from the property.

  • Stamp Duty Payment

    Sales deed is a legal Document, hence information related to the payment of stamp duty must be provided by the party. Such information must also contain who is paying the stamp duty on the appropriate immovable property.

  • Information on Registration Fee

    This would include the information related to the registration of the sales deed. Here all information related to the property must be included.

  • Clause related to Indemnity

    There must be a clause related to indemnity if there is any form of issues present with the property. Such clause would require the party in breach to indemnify the party in loss for any damages suffered.

  • Resolution of Disputes

    There has to be a clause related to dispute resolution system used by the parties. The method of settlement of disputes must also be mentioned here. If the parties want to consider litigation or other methods such as out of court settlement or dispute resolution.

  • Governing Law and Jurisdiction

    This clause would have information related to the law which would affect the parties. The jurisdiction would be the place at which the parties would have to settle their case in case of a dispute.

  • Witnesses Information

    This would include the information related to the witnesses who are going to be a part of signing the sales deed for the property.

Documents required for Sales Deed in India

The following Documents are required for a sales deed in India:

  • Complete Information on the Sales Deed
  • Information on Rights and Tenancy Corps (RTC) extracts;
  • Joint Development Agreement;
  • Power of Attorney;
  • Information on Katha Certificate and Extracts;
  • The Mutation Register Extracts;
  • An allotment Letter from the respective society
  • Original Loan Document related to the Loan
  • An Agreement of Sale with the Seller
  • Original Title Documents related to the property
  • Sanction plan of the building or the property
  • NOC from the Electricity Department, Pollution Control Board, Water Works and Air Port Authority;
  • Supplementary Agreement or Deed of Ratification
  • In case of a resale of the property a copy of all the previous registered agreements;
  • In case of a resale of the property, No Objection Certificate from the Apartment Association.

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Frequently Asked Questions

Yes Sales Deed registration is mandatory as per the requirements of the act. Apart from this it is important for the buyer and seller to register the sales deed.

It is important to register a sales deed, as it would have some form of legal value in the court of law.

The fee for registration charges have to be paid by the buyer. Apart from this, the buyer would also have to pay the charges related to stamp duty.

No it is not possible to revoke or cancel a sale deed in India. However, if there is a order regarding a competent court, then the sale deed can be cancelled.

Sale deed number is a unique number which is utilised in searching the property. Such identification number is unique in finding the property details.

All information related to the particulars of the sale must be mentioned in a sale deed. This would include the information related to the property and the information of the parties.

No it is not possible for an individual to sell the property without the sale deed.

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