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Sale Deed Drafting

Sale deed is the most important document in case of transfer of property ownership. Like many other deed documents such as lease deeds, mortgages, gift deeds, and exchange deeds, a sale deed is a class of conveyance deed. When selling a property, a sale agreement and other documents come in handy.

The sale agreement will include the new owner's name in the documents. It is important to register the sale agreement as per the Indian Registration Act., while drafting the form of a sales contract, several aspects need to be considered. What is a sale deed, what is the format of a sale deed and what is the meaning of a sale deed in Hindi and other languages are given in the following.

Description of Sale Deed

A sale deed is a legal document that enables the owner or seller of the property to transfer the rights of the property to the name of the buyer. Register the property at the local sub-registrar's office after the seller drafts the sale agreement. the sale agreement is very necessary until the sale agreement is registered, the buyer cannot become the rightful owner of the property in terms of the law.

Documents required while drafting the sale agreement include building plans, builder's allotment letter, recent tax receipts, recent utility bills (electricity), power of attorney (if applicable), title documents, and in case of resale of the property. All previously registered contracts.

At the time of registration of the sale agreement, the buyer must pay the necessary stamp duty. Currently, the stamp duty levy on the sale value of the property ranges from 4 to 6 percent. Different states charge different rates of stamp duty on properties.

Drafting of Sale Deed

There are steps involved in the transfer of property through a sale agreement;

  • Step 1 : Understanding Your Needs

Hire a lawyer and discuss your needs with him.

  • Step 2 : Drafting

Based on your responses, the attorney will draft a sales agreement within 3 business days for your review and approval.

  • Step 3 : Printing of Sale Agreement

After you approve the draft sale agreement, the sale agreement will be printed on non-judicial stamp paper.

  • Step 4 : Fixing an appointment with the Sub-Registrar

The lawyer will make an appointment at the office of the Sub-Registrar in whose jurisdiction the property lies.

  • Step 5 : Registration of Sale Agreement

You will sign the document along with two witnesses and a lawyer at the Sub-registrar's office and register it by paying the registration fee.

  • Step 6 : Registered Sale Agreement

Once the agreement is signed and the registration fee is paid, the Registered Sale Agreement will be issued by the Sub-registrar's Office.

Elements of a Sale Deed

While drafting the sales contract, several essential elements are included in the document. The following are the things that should be a part of the draft sale agreement.

Details of both parties

Details regarding the name, contact number, and age of both parties are recorded in the draft sale agreement.

Property Details

This section includes details of the property, such as its complete address, property area, dimensions, and construction details.

Indemnification Clause

This specific clause is added to the property to ensure that the seller releases the buyer from all past taxes, liens, and charges related to the property. Also, the seller will pay off any mortgages and debts before finalizing the sale of the property.

Payment Details

The price at which the owner will sell the said property should be mentioned in the sale deed. Along with the sale price of the property, the information regarding the advance payment to be made by the buyer must be mentioned in the sale agreement. The amount paid in installments and the date of each installment should also be mentioned in the document.

Method of Payment

The method of payment, i.e., how the amount will be paid for the purchase of the property, must be recorded in the sale deed. Standard modes of payment, such as bank transfer, check, and cash, are mentioned in the sale deed.

Possession of Property

The date of possession of the property by the buyer will be recorded in the sale deed.

Property Witnesses

The property certificate clause includes that two witnesses are mandatory to witness the sale deed. The contract of sale should be signed by at least one witness from both sides, i.e. buyer and seller. The witness has to state their full name, address, and age.

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Obtaining a Certified Copy of the Sale Agreement

Having established that the sale agreement document is of utmost importance, the property owner should maintain the sale agreement with utmost care. However, if the property owner loses the sale agreement at any time, the owner must file a complaint at the nearest police station.

After filing a complaint (FIR) at the police station, a non-traceable certificate is issued to the property owner. After issuing the non-traceable certificate, publish an advertisement in the newspaper about the sale contract loss. The advertisement must include the required details. As a next step, you need to file an affidavit and application in the office of the Sub-Registrar to obtain a certified copy of the sale deed.

The affidavit must be notarized and must contain a copy of the FIR, non-traceable certificate, advertisement, and details of property attached to it. The affidavit must also be accompanied by a signed undertaking stating that the information shared is true. Also, a certain amount has to be paid to get a certified copy of the sale agreement. After the process is completed, a certified copy of the sale agreement will be issued after 2 to 4 weeks.

Details of Sale Deed Number

A sale deed number is generated after document registration and payment of stamp duty and registration fee. You can find the sales contract number on the payment slip. Also, it is mentioned in the top right corner of every page of the entire sales contract document.

Sale Deed Documents Required for Property Registration

Here are some key sale deed documents required for property registration.

  • Agreement of Sale
  • Draft Title Deed
  • Extract
  • A sharing agreement signed by the builder and the property owner
  • Allotment letter from Housing Board
  • Power of Attorney, if any
  • Non-impairment certificate in case of resale of the property
  • Blueprint of official parties
  • Certificate of Completion
  • Property tax receipts
  • Certificate of Encumbrance
  • Stamp duty receipt
  • Identity proof of all parties and witnesses involved
  • Letter of Possession
  • Property documents from the bank if loan against property
  • Certificate of Occupancy
  • Passport size photo

Things to Remember while Executing Sale Deed

Here are some key things to remember when executing a sales deed.

  • A clause transferring ownership to the buyer after the completion of the purchase must be included in the sales contract.
  • The title to the property must be free of all encumbrances.
  • The Registrar's office must verify the status of the encumbrance.
  • All utility bills related to the property including water bills, electricity bills, property tax, etc. must be paid.
  • There should be no further dues like maintenance charges, pending.
  • The sale agreement must state all the terms and conditions under which the property is sold.

Frequently Asked Questions

What are the notes on the sale deed?
A sales deed contains the following information: Details such as name, age, and address of the seller and the buyer. Property details like total area, construction details, and an exact address. The final deal price of the property also includes the advance payment paid and the mode of payment.
What is a contract of sale under the law?
Also known as a conveyance deed, it is a legal document used in property transactions to evidence the sale and transfer of ownership of a property from a seller to a buyer. A sales contract is signed after the buyer and seller agree on the terms and conditions.
What is the validity of the sale deed?
The period validity for an unregistered sale deed is of 3 years from the date of execution. Any shortfall in stamp duty is paid by court order. However, under Section 54, such an unregistered sale deed, though valid under the Registration Act, cannot confer the title on the purchaser.
Who prepares the sales contract?
A draft of the sale is prepared by the seller and contains the details of the transaction. The document must then be notarized by a lawyer, otherwise, it will have no authority when presented to an authority or court.
When a sale deed is void?
A contract or document which is not enforceable in law is said to be void under Section 2(8) of the Indian Contract Act. If and when a contract is said to be void: its consideration is prohibited by law. If allowed, it would be against any law.
On what grounds can a registered sale agreement be canceled?
If any party involved is dissatisfied with the contract and sues for the same in a court of law, the contract of sale can be rescinded. The petitioner must obtain an order from the Civil Court and submit it to the Registrar, who will then proceed with the cancellation process.
What makes a sale deed valid?
A deed of absolute sale is signed by both parties before a notary public. To be valid, an absolute sale deed must indicate the date and place of filing, proper identification of the property, and the name and address of the buyer and seller.

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