What is a Sale Deed?
A Real Estate transaction in Bangalore is considered legally complete only after it has been signed by the Seller and Buyer. The document that finalises or completes the Real Estate transaction is called the Sale Deed. After a Sale Deed is signed by both parties it serves to identify that the Buyer is now the legal owner of this property. Thus it transfers the ownership of the property from the Buyer to the Seller and provides legal protections to the Buyer of the property.
What is the difference between a Sale Deed and a Conveyance Deed?
A “Conveyance Deed” and a Sale Deed are actually the same thing. The term “convey” when used in relation to real estate transactions simply refers to a change in ownership of the property from the Seller to the Buyer.
What is a Sale Agreement or Agreement of Sale?
Before the Seller and the Buyer execute a Sale Deed, the first step they must both take is work out the details of the transaction via a document called a Sale Agreement or Agreement of Sale. The Sale Agreement is done on non-judicial Stamp Paper and contains the following details:
- How much money will be paid in total for the property?
- What portions of the total amount will be paid at what points in time (ex. 25% of the funds as soon as the Sale Agreement is signed and 75% within 3 months)?
- What forms of payment do the Buyer and Seller consider acceptable (ex. Cash, Cheque, Demand Draft, etc)?
- When will the Seller give possession of the property to the Buyer?
- Are there any obligations that the Seller agrees to perform before the Sale can happen?
- What happens when the Buyer fails to keep up their side of the deal?
- What happens if the Seller fails to keep up their side of the deal?
The Sale Agreement is a legally binding document. It involves the payment of a small amount by the Buyer to the Seller when the agreement is signed by them and their witnesses.
What is in a Sale Deed?
A Sale Deed contains the following details:
- Details about the Buyers and Sellers: Full Names, Age, Addresses, Occupations,
- Details about the Property: Exact Location, Property Address, Total Area, Construction Details
- Details about how the property was acquired by the Seller
- Details about why the Seller is desiring to sell the property
- Details about the final Sale Amount that has been agreed to by the parties, the amount already paid when the Sale Agreement was executed and the remaining amount that is being paid when the Sale Deed is signed.
How is a Sale Deed executed?
- As discussed above, before a Sale Deed can be executed, an Agreement of Sale must have been signed by the Buyer, the Seller and their Witnesses.
- The Sale Deed is prepared on non-judicial stamp paper.
- The Sale Deed is signed by the Sellers, the Buyers and Witnesses in order to finalise the transaction.
- The Buyers hand over the money towards the the purchase of the property to the Sellers.
- The Sale Deed is registered at a Registrar or Sub-Registrar’s Office.
If I am a buyer, what precautions must I take before signing the Sale Deed?
- Make sure No Encumbrances exist on the property. If any outstanding Encumbrances exist (for example, any Bank Loans that have not been cleared), then the Seller’s must take care of these before the purchase.
- Make sure all taxes, cess, electricity and water charges have already been paid by the Seller.