Sale Deed: Essentials about a Sale Deed
Having an authorized property without any legal issues is very important for a new property investor. With a number of frauds and illegal lands being sold to people, it is quite difficult to sense the trouble in the initial stages. In such cases one of the most of the most important legal protection towards the ownership of the property is the sale deed.
It is mandatory that every investor should know the importance and the basis of a sale deed. This will help him against being cheated by any developers or owners.
What is a sale deed?
This deed is the third type of deed and is also known as bargain deed. It is one of the most valued legal documents in the sale or purchase of a property. The sale deed is governed by the Registration Act and should be considered important by both the buyer and the seller. A property without a signed sale deed is incomplete and cannot be sold or purchased by either the buyer or the seller. A sale deed is signed only after the satisfaction and cooperation of both the parties on various terms and conditions.
It states that the grantor has every right to convey title but cannot make any warranties against encumbrances. This kind of deed is implied by the court officials who hold the property by force of law rather than just the title.
What does a sale deed contain?
This deed consists of almost all the details which are required in order to carry out the purchase or sale of a property. Details like complete name of the buyer and the seller along with their addresses are included. Other details like the details of the property under sale, the identification number, the property location, the property address, the total area of the property and others will be included.
- One of the most important statements a sale deed has is that, the deed will require the seller to certify that the property under sale is free from all the encumbrances and is without any lien.
- The sale deed can be executed by the property seller only after he settles the loan which he has taken for the property.
- The draft sale deed will include the total amount which is to be paid for the purchase/sale of the property, the advance amount, the date of payment, the mode of payment, the deadline to make the payment and the details and the transactions of the payment. This deed will also have the protection provisions for the buyer and the seller.
- It contains the details about the receipt which is issued by the seller to the buyer for the money received towards the sale transaction.
- The deed contains the precise date of transferring the property related documents to the buyer along with the possession of the property under sale.
How is a sale deed prepared?
As mentioned earlier, a sale deed is prepared with the mutual consent of both the parties on a non-judicial paper. The value of the deed differs from state to state based on the prescribed Stamp Act of the State. Also the sale deed will be signed by witnesses apart from just the buyer and the seller.
How does a sale deed work?
- The jurisdictional Sub-Registrar’s office registers the sale deed and at the time of registration there should also be witnesses present apart from the buyer and the seller. In case the buyer or the seller is not in a position to present them physically, they can represent their nominated agent who will be empowered with a legal power of attorney in order to execute the sale deed.
- The deadline to produce the original documents will be four months from its execution. In case the documents are not produced within the given period, the Registrar will allow a grace period of another four months for the documents to be produced. Further, this will also levy a maximum penalty of 10 times the registration charges related to the property.
- At the time of property selling, the buyer pays charges like the stamp duty and the registration charges, whereas the seller pays for the property tax, the cess, water and electricity charges.
Henceforth, both the buyer and the seller should make a thorough check before signing the sale deed.
