Everyone's dream is to own a property. Obviously you need money to buy a property, but many recent instances of fraud and bogus selling of property is something that is beyond money alone.
If there is one important thing that gives legal protection to ownership of your property, it is the sale deed.
Understanding the basics of a sale deed can help you stay protected from getting duped. Let us see the basics of a sale deed, its importance, how it is prepared, what does it contain and how does it work! Read on . . .
What is sale deed?
A sale deed is one of the most valuable legal documents in a purchase or sale of a property. It is governed by the Registration Act and is an important document for both the buyer or the transferee and the seller or the transferor.
The purchase or sale of property is not legally complete until a sale deed is signed between the buyer and the seller. Usually a sale deed is signed only after both the parties are satisfied and comply with the terms and conditions as said in the agreement.
How is it prepared?
To begin with the buyer and the seller agree to prepare a draft sale deed on non-judicial stamp paper. This value of the sale deed will differ from state to state in the country and as prescribed by the Stamp Act of the respective State.
Once the following details in the sale deed is agreed between the two parties the sale deed is ready to be signed. The sale deed would also require to be signed by at least two witnesses with all their details included.
What does it contain?
A sale deed has almost all the details required to carry out the purchase or sale of a property. Beginning with the basic details like the full names of the buyer and the seller, and their addresses, the other details in the draft sale deed would include the details of the property under sale such as its identification number, its exact location, the address, total area of the property, and the detail of the construction if it is a house.
Most importantly the sale deed would require the seller to certify that the property under sale is free from any encumbrance and without any lien.
If there is an existing loan taken against the property the seller should settle the loan and then only execute the sale deed. However, it is always better for the buyer to check this with the local registrar's office.
Besides these the draft sale deed would also include the total amount to be paid for the purchase/sale of the property, advance amount paid if any, the dates on which the payment are made, how it is paid, the time given for the payments, the details of the bank transactions of the payments, etc.
The sale deed would also mention about the receipt issued by the seller to the buyer for the money received towards the sale transaction.
It would also clearly mention the exact date on which the seller would hand over to the buyer the original property related documents and the date of subsequent possession of the property under sale.
The draft sale deed would also mention the indemnity provisions for the buyer and the seller.
How does it work?
The sale deed is registered at the jurisdictional sub-registrar's office. Apart from the buyer and seller of the property under sale the witnesses should also be present at the time of registration.
Sometimes if the buyer or seller is not in a position to be physically present his nominated agent empowered with a Power of Attorney is legally allowed to execute the sale deed.
The original documents related to the sale of the property should be produced within four months from the date the sale deed is to be executed. If this is not possible the registrar might allow a grace period of another four months to produce the original documents however this delay might attract a maximum penalty of 10 times the registration charges related to the property.
Usually, the buyer would pay the stamp duty and the registration charges. And the seller on his part should ensure that all payments related to the property such as property tax, cess, water and electricity charges, and others was paid before the sale deed is executed.
So the next time before you sign on the dotted lines make sure you are cross-checked all details.