What is Sale deed | Sale Deed Draft | Property Sale Deed
By Pratik Balasaria

Are you thinking of purchasing a home and are wondering what is sale deed? This easy to understand blog post will explain i in detail and will also cover the difference between sale deed and sale agreement, etc. 

What is Sale Deed?

what is sale deed

In simple terms, a sale deed is a legal document. This document showcases the transfer of title, rights and ownership of a property from a seller to the buyer. It etails all the information about this transfer of ownership. It is essential to show legal proof that the property now belongs to the buyer. In the most basic terms this is what is sale deed.

The purchase of a property is legally not completed until both parties have read through the details and are satisfied with all the terms and conditions. Once both the buyer and seller are satisfied, they sign a copy and keep it with them. This is to show proof of purchase in the future. 

A Sale Deed should be drafted by a lawyer after carefully considering all the clauses of The Transfer of Property Act. This is essential to lessen the risks involved in the purchase of a property for both parties. 

Before we move on to talk about its contents, we hope you have understood what is sale deed.

What are the benefits of sale deed?

Now that we have understood sale deed, let us also understand the advantages.

  1. Protects the parties involved – A well drafted sale deed protects the rights of both buyer and seller. This is particularly useful in the off chance that some part of the transaction goes awry. It minimises any legal risks and avoids any ambiguity or chance of confusion. 
  2. Defines the property being purchased: Secondly, it defines the property being purchased in absolutely concrete terms. This includes details like the square footage and location. It includes a well defined description of property in question which is especially advantageous for a buyer.
  3. Legally Binding: Additionally, it is enforceable by the law and thus is a legally binding document. Both parties are also more secure because the money due by either party is specified. It helps avoid any complications further on in the process. It also gives the seller the assurance that his/her property will not be taken for granted. As a legally binding and registered and stamped legal document exists. 

What all should be included in a sale deed?

These papers have a few basic details that must be included in the copy.  Let’s look at what is sale deed components.

1. Details of both parties

Every sale deed should have the complete descriptions of both parties involved. This includes their full names, their complete address, contact details and age as well as occupation. These details should be cross checked to ensure that there is no error in any of the details.

2. A complete description of the property being transferred

It needs to have the id number of the property being transferred. As well as the correct address, square footage and dimensions of the property along with location and construction details. In case construction details are not available, this can be skipped. 

3. Indemnity and encumbrance clause

This clause is essentially a declaration from the seller that the property being sold does not have any encumbrance, litigation or charge. This clause protects the seller from any charges if still pending. If the seller has a pending loan taken with the property in question as mortgage, the buyer of the property is protected from any liabilities. A buyer is completely within their right to examine the property before signing. 

4. Sale Consideration

The sale consideration just means the price at which both the seller and buyer have agreed to transfer the property. Both parties will need to agree to the dates of payment, mode of payment and all other details in advance. This then needs to be specified. The details will also include all details of any transaction made in both figures and numbers. In this section, the parties can also mention any advance payment made if any. Finally it should also have the receipts of the transaction.

5. Delivery and possession of the property

The property papers should specifically mention the date of handover of the property by the seller to the buyer. It is the date by which the buyer can possess the property and from that day onwards the property legally belongs to him.

How to Draft a Sale Deed

It is important to understand what is sale deed process? There are a few steps involved in the drafting process:

  1. Finding a lawyer

    Finding a lawyer that understands your requirements. They will then be in touch to understand what is sale deed requirement. 

  2. The drafting process.

    Once the lawyer has fully understood what is sale deed requirement, they will begin the process of drafting. They will then send it to you within 3 days for review and approval.

  3. Printing on non-judicial stamp paper

    It will be printed on a non-judicial stamp paper once it has been approved.

  4. Appointment with a sub-registrar

    The lawyer will then take an appointment with a sub-registrar in the area where the property is located.

  5. Registration

    It will be registered in the presence of two witnesses and a lawyer. Once you sign the document and pay the registration fees, the deed will be registered.

  6. Registered sale deed issued

    Finally the registered sale deed will be issued by the sub-registrars office.

Documents needed for a sale deed

  • The extract
  • General power of attorney
  • Building plan
  • NOC 
  • Allotment letter
  • Sale agreement
  • Possession letter
  • Payment receipt
  • Property tax receipt
  • Encumbrance certificate
  • Completion certificate
  • Occupancy certificate

Sale agreement vs Sale deed

A sale agreement precedes a sale deed and is signed and delivered on non-judicial stamp paper. I is proof of purchase and legally transfers the right of property to the buyer.

Sale deed sample

what is sale deed

Sale Deed is important

We hope this post was useful in understanding what is sale deed. For more such buying guides and useful property posts, do read our other blogs.

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