What is a Sale agreement?
Property sale agreement or Sale agreement is a document in writing executed, signed and delivered by the parties to the agreement i.e. Seller and Buyer and witnessed by at least two witnesses. It is prepared on non-judicial stamp paper. In a buy /sale transaction for immovable asset, till the final sale deed is registered, sale agreement is the most important, legally valid and enforceable document.
When the seller and buyer conclude negotiations and finalize a deal, the entire gamut of the terms and conditions for the particular deal are recorded in this document which becomes the basis for subsequent actions by both the parties.
What does it contain?
This document contains the complete identification of the parties and the property, area and measurement of the property, amenities and facilities available to the buyer, details pertaining to the quality of construction, agreed consideration payable by the buyer, mode of payment of the consideration, time frame for conclusion of the deal and handing over possession of the purchased property to the buyer, penalty clauses for delay in completion of the project, registration of the final sale deed and possession by the buyer and all other relevant terms and conditions agreed by and between the buyer and the seller.
Execution of sales agreement
After due execution and delivery of the sale agreement the parties are bound to act in terms of the contract and unilateral violation of any of the terms mentioned in the agreement makes the defaulter liable to compensate the aggrieved party by proper legal adjudication. Though the sale agreement is not a “document to title” but it confers right to the buyer to acquire the property after compliance with the terms of the contract. As provided under section 10 of “Specific Relief Act,1963” party to a contract has to perform in terms of the contract and failure to act makes the defaulter liable to compensate the aggrieved party for all the losses, cost and damages.
A sale agreement may or may not be registered, however if agreed by the parties it may be registered by paying ad-valorem stamp duty and appropriate registration fee pending registration of the final sale deed. In such cases at the time of registration of the final sale deed the stamp duty and registration fee already paid is deducted from the actual payable stamp duty and registration fee. Thus it is clear from the foregoing that it is a very important document and must be prepared very carefully by competent legal professionals.
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This article is contributed by -IndianPropertyLawyers, simplifying property
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