Sale Deed : Definition, Advantages, & Components

When buying a property, obtaining the sale deed is extremely important as it is proof that the ownership of the property has been transferred to you (the buyer). The sale deed is a type of conveyance deed, along with other kinds of deed documents like lease deed, gift deed and exchange deed. For those who are selling a property, the sale deed and other deed documents are also crucial in proving your ownership so that the sale can go through.

So, a sale deed is a legal document that confirms the sale of a property as well as the transfer of its ownership from the seller of the property to the buyer. This document is also needed by the buyer in case he needs to sell the property in the future. It is proof that he or she owns the property. Once both buyer and seller agree to the terms and conditions in the sale agreement, it is signed. Only then is the sale deed signed and registered according to the Indian Registration Act.

In this article, we explain in detail the meaning of the sale deed, why it is important and how to obtain it. Also included is the sale deed format, inclusions and what to keep in mind before executing a sale deed. Read on for all you need to know about this important document.

What is a sale deed?

Sale deed is a legal document which will allow the owner of a property to transfer the ownership and other rights of the property to the buyer. The document should be drafted by a legal professional and it should follow the guidelines of the Transfer of Property Act.

This contract is used to facilitate the sale and transfer of property ownership from the seller to the buyer after it has been paid for. It can be used as evidence of the sale and transfer of ownership as both parties, the vendor and the purchaser, need to sign the document in the presence of two witnesses at least.

The sale deed needs to be registered at the sub-registrar office of the locality once it has been drafted by the seller/owner of the property. Sale deeds should be registered under the Registration Act, 1908 within four months by the Sub Registrar. It’s not enough to just draft and sign a sale deed, registration of the sale deed is of utmost importance as until it is registered the buyer will not be able to claim themselves as the legal owner of the property.

Only once the buyer of the property has the rights of ownership transferred to them via the sale deed, they then have the right to sell, right to use and right to lease or mortgage the property.

The advantages of a sale deed

The sale deed is an important document that allows the seller of an immovable asset to carry out its sale and transfer the rights to another person (the buyer). A person cannot claim any rights to a property if they do not have a sale deed. Therefore, there are many advantages and benefits of the sale deed, such as:

  • The legal document is enforceable by law
  • It facilitates the sale and its transactions in a controlled and comfortable manner
  • It takes into account and protects the rights of the buyer and the seller through the terms and conditions in the contract
  • It states the duties of the buyer and seller clearly in the contract
  • When drafted properly, it avoids ambiguity and therefore limits the risk when selling or buying property
  • It describes the property in detail
  • The sale deed is stamped and registered so it is bound to the law

What is included in a sale deed

These are the various details that need to be included in a sale deed:

Party details: The names, addresses in full, contact numbers, ages and occupations of both the buyers and sellers.

Property details: Description of the property including the identity number, location details, dimensions and construction details.

Sale agreement: The agreement is drafted mutually with terms that protect the rights of both the parties and it is executed before the sale deed.

Clause: The clause states that the property being transferred does not have any encumbrance, litigation and charge. It is a declaration from the seller that indemnifies the person buying the property of any pending charges.

Loan: If there is any pending loan taken on the property, it should be settled by the seller before the sale is underway.

Examination: The buyer should be able to go through all documents regarding the property before the registration of the sale deed is done.

Consideration: This is the price at which has been finalised.

Payment: The details of any advance payment made as well as the receipt of sale transactions should be included. Price needs to be stated in figures and in words. The mode of payment and other payment details should also be decided and added.

Passing of title: When the property title is passed to the buyer, the rights of the property are then vested with him or her.

Possession by the buyer: The date of delivery of property to the buyer should be mentioned.

What is the process of getting a sale deed?

Here is a step by step process to obtain a sale deed, which needs to be registered by the Registration Act 1908.

  • There needs to be a lawyer present to ensure the transaction is carried out properly and all the important details are included.
  • All the information mentioned needs to be correct and all the required details should be included.
  • The lawyer will then begin to work on all the document related matters for the sale deed and send you a draft after it is done.
  • You will then have to read and check the details and tell the lawyer to make changes in case it is needed.

Sale deed format

Here is an example of the sale deed format according to the Finance Department, Government of West Bengal.

https://wbregistration.gov.in › Model_Sale_Deed

What is the sale deed number?

When the registration of the sale deed is complete, you will have to pay the stamp duty and registration charges. On the payment slip you will see the number. On each page there should be a government stamp. The sale deed number will be written on the top right corner of each page.

How to find the sale deed number?

The sale deed number is on the sale deed document and will be written like so: Document Number / Year / Sub Registrar Office initials. An example of this is as follows, 537/2023/HVL2. Here, HVL2 is HAVELI sub-registrar number 2. In India, every property transfer needs to take place with an original sale deed.

Registration of the sale deed

The process for registration of the sale deed requires a few steps.

  • Property papers should be kept with the sub-registrar
  • The registration should include details such as property value, stamp duty according to market rates and actual price, and the value of the non-judicial stamp paper
  • The deed should be executed on stamp paper
  • Both parties need to be present to execute it and there should be two witnesses
  • The sale deed will finally be registered with the sub-registrar

What are the different documents that are needed for property registration?

There are various sale deed documents that are needed for registration. These are:

  • Draft of the title deed
  • Extract
  • Both parties ID proof, as well as ID proof of the witnesses
  • Passport-size photographs
  • Sharing agreement between owner and builder, if any
  • Power of attorney, if any
  • Blueprint by the officials
  • Allotment Letter from the Housing Board
  • Original Property Papers with Bank, if any loan is taken
  • Sale Agreement
  • Copy of existing agreements if any resale has taken place
  • No objection Certificate, if any resale
  • Property Tax Receipts
  • Encumbrance Certificate
  • Completion Certificate
  • Stamp Duty Receipt
  • Possession Letter
  • Occupancy Certificate

What does a sale deed imply?

After the sale deed is signed, it is implied that the seller has given the buyer the title to the property. It shows that both parties have followed the terms and conditions set in the sale agreement and that payment has been made in full according to the agreed price. The ownership of the property is now legally with the buyer.

How can I get a certified copy of a lost sale deed?

In case you lose your sale deed, there is a process you have to follow in order to obtain a certified copy of it.

  • You (the owner) will first have to file an FIR at your local police station. You need to register your mobile number too to track the status online.
  • Make sure you keep a copy of the FIR with you in case you need to show it to the bank or potential buyers in the future.
  • Go to the sub-registrar office to submit an application for a certified sale deed copy.
  • You will have to take out a national and regional newspaper ad stating that you have lost these property documents.
  • Have a copy of both the FIR and the newspaper ad with you. You have to wait for four weeks to see if the property papers are found.
  • If they do not turn up, you have to get an affidavit on stamp paper with details of the lost deed. It should be signed and notarized from a public notary.
  • Attach the FIR document, the newspaper ad and FIR to the SRO with the required fee amount.
  • When the documents are verified, the SRO will legally issue a certified copy of the sale deed to you.

What you should keep in mind before you executing a sale deed?

Before you execute a sale deed there are a few things you need to keep in mind to make sure that the process is smooth and correct.

  • Don’t just copy the format for the sale deed from another document. You need a professional to help you make sure your sale deed is relevant to your property and situation. Getting the papers corrected later on is very hard so you should ensure that the documents are correct from the start.
  • Always put in the correct information and details regarding the buyer and seller, the property and ensure that the ownership and titles are absolutely clear.
  • The sale deed needs to be connected to the sale agreement.
  • There should be clear instructions and understanding about the mode of transactions and the history of the payments for the property. This also applies to any payment plans for the future.
  • You will need witnesses when signing the sale deed.
  • The seller will have to hand over all old documents regarding the property to the buyer.

Difference between a sale deed and a sale agreement

The transfer of rights of a property is a process that has multiple stages. The sale agreement is a document that is initially signed to give an agreement between a buyer and a seller legal status. Only after this is the sale deed prepared and the transfer of the property title to the new owner can be completed. Here are some of the main differences listed below:

Sale DeedSale Agreement
This legal document shows the transfer of property ownership.This document states that there will be a transfer of property ownership in the future.
With the sale deed document, the rights and interests of the property are transferred to the new owner.With the sale agreement, the buyer is granted the right to purchase a property when the terms and conditions are met.
Sale deed has information on the buyer and seller. These include details like ages, addresses, and other information.Sale agreement contains all the terms and conditions for which the property will be transferred.
To execute a sale deed, the buyer pays stamp duty and a registration fee.The sale agreement is executed on non-judicial stamp paper by the seller and the buyer. It is signed before the sale deed.

Is a sale deed a valid document?

Yes, a sale deed is a valid document that states information and details about a property and the transaction for it. This document facilitated a transfer of ownership from the seller to the buyer. Sometimes, a sale deed is called an absolute sale deed. This is because an absolute sale deed implies complete authority and ownership of a property, and the details that led to the sale and ownership change.

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