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What is an agreement to sell in Real Estate ?

A agreement to sell is a crucial precursor to the sale deed. It has legal sanctity and states the seller’s intention to sell the property and the buyer’s intention to purchase it in the future. The transaction concludes basis the pre-established terms and conditions between the parties. For more nuances of such contracts, read further.

The sale process for a property begins with a buyer researching and shortlisting a housing unit and the seller agreeing to sell. Upon deciding to enter into a property transaction, the buyer and the seller establish the terms and conditions of the transaction. Once these discussions conclude, the need for paperwork arises. One of the initial documents in this process is the ‘agreement to sell’ or the ‘sale agreement’. The main difference between a sale agreement and a sale is that the first is an executory contract, and the second is an executed contract.

Understanding the meaning of an agreement to sell

It is an agreement in which a seller agrees to transfer the property, subject to certain conditions and covenants, in the coming times. It is not an actual sale but a written intention to carry out the deal later. The contract specifies the terms under which the title of the property concerned will be transferred. The Transfer of Property Act, 1882 (TPA) is the Central legislation regulating the sale, lease, mortgage, and gift matters. Section 54 has defined an agreement to sell as ‘A contract for the sale of immovable property stating that the sale of the concerned property will take place as per the terms mutually agreed upon by both parties.’ However, it clarifies that an agreement to sell does not establish any interest or charge on the property concerned.

If the seller, who is a signatory to an agreement to sell, fails to proceed with the process, the buyer can ask for specific performance as per the provisions of the Specific Relief Act, 1963. Conversely, the seller can also seek the performance of the contract from the buyer. However, for the agreement to sell to have legal value, it must be registered in the respective office of the sub-registrar of assurances. To do this, the buyer needs to pay the applicable stamp duty. A lawyer who deals in such matters can help both parties in this endeavour. Usually, the contract mentions the provision of 2-3 months for the buyer to arrange funds for purchasing the property.

What information does an agreement to sell contain?

Since the registered document will have legal sanctity, certain clauses mutually agreed upon, are mentioned in the contract. These clauses are usually about the penalty for dishonouring the agreement and the right to call off the deal. The agreement also states the names and contact details of the parties, the size of the property (carpet area, super built-up area, etc.), and its address. The property type, freehold or leasehold, is also mentioned. The terms and conditions in the case of mortgaged or leasehold properties will be noted.

There is also a clause stating that the seller promises to give the property to the buyer free from encumbrances. In addition, the amount of token money, which is usually 10-20 percent of the total deal value, is paid when signing the agreement to sell, and the same is mentioned in the contract.

Lastly, unless otherwise specified in the contract, an agreement to sell must be executed at the specified future date. Sale agreements cannot cover sales that have already taken place. And thus, the deadlines are based on a specific future date and conditions.

What is a Completion Certificate (CC)?

The full form of CC in real estate is Completion Certificate. A Completion Certificate (CC) is an important legal document that certifies that a building is constructed according to the laid norms and master plan of the city. This document has all the information related to the project, such as the building materials used, building height, and building plan, among other details like the provision for green belt.

This document certifies that the building adheres to all the prevailing building bye-laws, and has not violated any norms. Homebuyers must note that the CC is mandatorily shown to the authorities to obtain electricity and water connections.

Builders are allowed to apply for a provisional Completion Certificate when there are minor works left in the project. Authorities then provide a provisional certificate valid for six months. After the expiry of six months, the developer is bound to get a final CC.

Who issues a Completion Certificate?

Local authorities issue the CC after a thorough inspection of the premises. If the developer abides by the rules, the concerned authority issues the certificate. It is issued by the local body after due scrutiny in three to four weeks.

What documents are required to obtain a CC?

Listed below are the documents required to receive the CC-

• Filled out application form
• Completion acknowledgement from a registered architect or civil engineer
• A copy of building plan approval
• Structural safety certificate from concerned departments
• Copy of NOCs for sewage, water supply, electricity connection, elevators, and fire evacuation, obtained from concerned departments
• Necessary declarations

How to obtain a Completion Certificate?

The Completion Certificate (CC) of a project can be obtained in the below-mentioned steps-

• The developer must apply the local municipal authority or the local development body for getting the Completion Certificate
• The application must be submitted with supporting documents
• Officers from the concerned certifying body will visit the project site and focus primarily on the construction quality of the property
• Violations of the prescribed construction and building norms may lead to project demolition
• Upon successful inspection, a signed and stamped Completion Certificate will be issued by the local authority

Why is a Completion Certificate important?

Buyers must be aware that buying or moving into a property that does not have a CC is not recommended as it is a risky investment choice. The civic authorities hold the power to slap heavy penalties on the developer, leading to stalling or cancellation of the registered layout of the project. In case the building is already occupied, residents may also have to face eviction in extreme cases.

Difference between an Occupancy Certificate and a Completion Certificate

While the CC examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances, the OC certifies that a property is fit for possession by the buyers.

Iterating on the difference between the two documents, Deepak Kapoor, Director, Gulshan Homz, says, “Completion Certificate is just a reaffirmation that the building has been constructed as per the building bye-laws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants. As these documents are generally not required at the time of property registration, buyers may fail to realise their importance and overlook them. But for their own benefit and peace of mind, it is warranted that buyers of ready-to-move-in and under-construction properties check these documents before taking possession. This can help avoid unnecessary legal dispute or confrontation in the future.”

What is an Occupancy Certificate (OC)?

The full form of OC in real estate means Occupancy Certificate. After you have zeroed in on a property, the Occupancy Certificate is one of the most essential documents to obtain. It is a document issued by the concerned civic body to verify that-

• The property is built according to the approved plan and bye-laws
• It adheres to the building code
• It comprises all basic amenities
• All required clearances, including the fire No Objection Certificate (NOC), are in place

Who issues the Occupancy Certificate?

The competent authority issues the occupation certificate after due scrutiny, and permits the occupation of any building, under civic laws. These are generally handed over by local civic bodies like municipal corporations. The local body generally issues the certificate within 30 days of project completion.

Whose responsibility is it to obtain the OC?

It is the responsibility of the builder to get the OC from the issuing authorities and make it available to the property buyers to prevent any discrepancies in the future. However, in case the owner has taken possession of the property, he/she can also apply for the document at the concerned authority’s office.

What documents are needed to obtain an OC?

Below are the documents which the developer submits at the local civic office to obtain the OC-

• A copy of the approved building plan
• NOC received from the pollution board and the Airport Authority of India (AAI)
• Construction commencement certificate
• Latest property tax payment receipts

How to obtain an Occupancy Certificate?

It is the responsibility of a builder to obtain Occupancy Certificate. The process to obtain the Occupancy Certificate (OC) of a property involves the following steps-

• Submit an application requesting the Occupancy Certificate from the area’s housing board or apply through a prescribed form
• Submit the supporting documents along with the necessary fees
• An officer will be assigned to the project to make necessary inspection visits at the project site
• Based on the property’s adherence to the prevailing building norms, the nodal officer will issue a No Objection Certificate (NOC)
• The builder must submit the NOC at the authority’s office to obtain the Occupancy Certificate

Why is an Occupation Certificate important?

An Occupancy Certificate (OC) is necessary to apply for civic facilities like water, electricity, and sanitation, among others. The local municipal body needs this document, in the absence of which homebuyers can complain to the consumer forum or the State Real Estate Regulatory Authority (RERA) body.

What is a partial/temporary Occupancy Certificate (OC)?

In case of large-scale real estate projects, the local authorities provide a temporary or partial OC for the portion finished by the developer. A partial OC is generally issued for tower-wise construction in a large project, which allows homebuyers to access the basic amenities. However, access to common facilities, like swimming pool, fitness centre, and clubhouse, among others, is not allowed.

In case a homebuyer collects the temporary OC, the builder must later provide the permanent OC upon project completion.

Difference between an Occupancy Certificate and a Completion Certificate

While the CC examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances, the OC certifies that a property is fit for possession by the buyers.

Iterating on the difference between the two documents, Deepak Kapoor, Director, Gulshan Homz, says, “Completion Certificate is just a reaffirmation that the building has been constructed as per the building bye-laws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants. As these documents are generally not required at the time of property registration, buyers may fail to realise their importance and overlook them. But for their own benefit and peace of mind, it is warranted that buyers of ready-to-move-in and under-construction properties check these documents before taking possession. This can help avoid unnecessary legal dispute or confrontation in the future.”

Should you buy a property if the developer does not have an OC?

Before you buy a property, it is always advisable to ask for both OC and CC. If the developer fails to provide OC or CC, the next course of action will be dictated by the buyer-seller agreement. If the developer is delaying the availability of OC/CC, you can even ask for rent for that period. Also, the buyer can reach out to the authorities and register complaints with them.

Although homebuyers are advised to proactively seek these certificates from the developers, the implementation of the Real Estate (Regulation and Development) Act, 2016, has increased transparency and accountability of the builders, and made obtaining these documents easier. Overall, it is always advisable to cross-check the necessary approvals and essential documents before investing to have a seamless property transaction.

What is OC (Occupancy Certificate) in Real Estate – and Why is it Necessary

OC Full Form is Occupancy Certificate.

Occupancy certificate is considered an important document when it comes to buying a new home as it ensures that the property is constructed as per the prescribed laws. Let’s have a look why it is necessary to obtain the occupancy certificate these days.

A legal document issued by the government agency or the local development authority affirming that a constructed property is in compliance with the national building code and is fit for occupancy is called an Occupancy Certificate (OC). Whether a purchaser plans to use the property for the end or wants to sell the space, OC for a property transaction is required.

The factors verified for providing the Occupancy certificate are: 

• If the property is constructed according to law and the approved plan
• Has the building been constructed in compliance with the building code
• If it has all the basic needs required such as drainage, electricity, etc.
• If all the required clearances including the NOC from the fire department is obtained

How to get an Occupancy Certificate?

It is the responsibility of the builder / developer to apply to OC with the local municipal development authority of the property. The certificate will only be awarded after the inspection authority is satisfied that the project is built according to the approved construction plan and mandatory standards. In certain cases, though, the contractor can take partial OC and sell ownership. For instance, in the case of construction projects with mixed uses, a building contractor is allowed to acquire partial OCs of partially completed housing buildings and to pass ownership to the owners of flats. Therefore, it is essential that the buyer receives the document to make the possession of the property legal.

Which documents are required for obtaining an Occupancy Certificate?

Ideally, within thirty days after project completion, a builder should submit an OC application to the Municipal Corporation. However, buildings with some design differences and which have flouted authorized building plans do not qualify for the OC. The list of documents required for obtaining occupancy certificate are:

• Copy of approved plan of building
• NOC document copies obtained from pollution board and airport authority
• Certificate for the commencement of construction
• Updated or recent property tax slips
• What happens if you occupy the building without an Occupancy Certificate?
• The constructed building can be declared as an illegal property
• The legal authorities hold rights to evict the residents
• Due to the illicit status, the property is liable to demolition
• Loan approval and sales of the property will be constrained
• Disconnection of supply of water and electricity without any intimation
• Penalty on the property will be imposed, which will require higher property tax payment
• Receiving Khata certificate is be an issue

What is a Partial Occupancy Certificate?

The partial OC is majorly seen in case of large development plans, where the construction is done in multiple phases. In this case the partial OC is given as the developer for tower wise construction.

The main advantage of partial OC is that it provides all the access to the basic amenities and uphold legal rights of the property by homebuyers. However, the amenities such as swimming pools, fitness center and others are not accessible under the accessed. Also, the approval of home loans and the obtaining of the Katha certificate will be a problem.

Occupancy Certificate vs Completion Certificate vs Possession Certificate

The three terms may seem overlapping and confusing but they are very different from each other. A housing project will get a ‘completion certificate’ from the authorities when it is liveable with all facilities. The project will get its ‘occupancy certificate’ when the authorities are sure that the construction followed all rules, laws and by-laws. A possession certificate, on the other hand, is the confirmation of the transfer of the property from the builder to the buyer. The builder issues a ‘possession certificate’ and it has the date when the buyer officially takes over the property.

property.

Completion certificate

Occupancy certificate

Possession certificate

States whether the building has all requirements to make it liveable

States whether the construction norms and building by-laws are followed

States the date of transfer of ownership from the developer to the buyer

Issued by authorities to the builder

Issued by authorities to the builder

Issued by the builder to the buyer

Possession of the building is offered after CC issuance

Builder can apply for utilities like electricity, water supply etc. after OC

Issued within 30 days of OC and CC issuance and buyer can move in

Occupancy Certificate: Protection for Property Owners

An occupancy certificate ensures the suitability of a property for possession. It helps you ensure that neither any untoward accident occurs nor are you offered an unsafe building to reside in. As a buyer vigilance is important so that you are not duped and you can secure your rights over your property. If your builder refuses to give you an OC, you can file a complaint in the consumer’s forum. A legal notice, asking him to hand over the OC, should reach him within a month. You can come together with other buyers and report to the RERA if the project is registered under RERA (Real Estate Regulation and development Act).

Summing Up – Occupancy Certificate: 

An occupancy certificate is an important document of property rights. It helps secure government/municipal services such as electricity, water supply etc. You must remain very vigilant and ensure to receive OC from the builder. You can complain to the consumer forum or the RERA in case your builder misses/refuses to give you one.

FAQs

Can I buy the property in case the builder does not have the Occupancy Certificate?

It is always advisable to order both OC and CC before you buy a house. If the builder will not have OC or CC, the buyer-seller arrangement would be the next course of action. In case of delay in providing the OC or CC, the buyer can request the rent for the concerned period.

Can I sell my building without an occupancy certificate?

Selling a property without OC is not possible, as without the document you are not the legal owner of the property.

What is the difference between the Occupancy Certificate and Completion Certificate ?

Occupancy Permit shall inspect and approve a property that complies with national code, municipal utilities, electricity, sanitation and other authorizations. The completion certificate, on the other hand, is a declaration certifying that the property is suitable for buyers to purchase.

Who issues the Occupancy Certificate?

The municipal corporation (local municipal body) issues an occupancy certificate. They will only do so if they are satisfied that all the rules and local regulations have been followed during construction. The builder will receive the certificate which they will pass on to you.

What if the builder does not give the Occupancy Certificate ?

In case your builder misses giving you the occupancy certificate, ask them upfront. If they still refuse, you can complain to the consumer forum or the RERA.

What is Power of Attorney (POA) in Real Estate – Check what you can and can’t do as an Attorney

Power of attorney (POA) or letter of attorney is a legal document that allows you to appoint one person or organization to manage your property, medical affairs, finances on your behalf in your absence. The person who authorizes the other to act on behalf of him/her is called the principal or donor or grantor. The one authorized to act is the agent. 

Depending on the terms and conditions of the POA, the authorized agent can either have limited or extensive authority to make legal decisions about the property, medical affairs, and finances. As an attorney, the following are the things you can do and don’t. 

Financial and property affairs:
Things an agent can do –

• Buying, selling and renting a property
• Repair and maintain grantor’s home
• Supervise bank accounts
• Bill payment
• Manage investments
• Gift purchase (there are strict rules for this and advice should be taken for each circumstance)

Things an agent can’t do –

• Large financial gifts cannot be given to people
• The agent has no rights to take own decisions related to discretionary funds
• Grantor’s bank account cannot be mixed with agent’s account
• Misuse of position for personal gain
• Tax planning without proper guidance

Health and welfare:
Things an agent can do –

• Plan the grantor’s daily routine
• Decide about personal care and medical treatments
• Take decisions that benefit the grantor
• Take into consideration what the grantor needs

Things an agent can’t do –

• No decisions should be taken that might restrict the grantor’s freedom
• If the grantor is stable, the agent cannot make any decisions
• Cannot make assumptions based on age, appearance, or behavior

What is Sales Agreement in Real Estate ? Definition and Details

A sales agreement, for the seller to the buyer, is the primary document that evidences ownership and vesting exact title to the property.

When an immovable property is to be sold, usually there are two types of agreements – a sale for agreement and a sale agreement or sale deed. The agreement for sale is necessarily needed to be stamped and registered, as per the registration law. There may exist a delay between the registration date and agreement execution. This is generally believed that with an agreement’s registration, the property’s rights would get transferred from the vendor to the buyer.  

For any home buyer, the much-awaited sense of ownership of a dream home follows the execution and registration of the sale agreement. 

Hence, the buyer is always advised to thoroughly scrutinize all the major terms of the sale agreement for ensuring that all rights are well-protected and an absolute title is conveyed to the property. If there is a delay between the registration date and an agreement’s full execution of selling a property, the question arises when the property’s transfer is considered to be complete?  

What is a sales agreement? 

Section 54 – Transfer of Property Act, 1882 (TP Act) clearly defines a particular sale as an ownership transfer of immovable property for consideration. For constituting a valid sale agreement, all the critical components of a sale agreement as mentioned below are to be fulfilled: 

1. The property, being the subject matter of the conveyance/transaction. 
2. The seller, being the earlier owner, transfers the property. 
3. The buyer, being the individual who acquires the title from the property’s seller. 
4. The consideration is the amount paid or payable by the buyer to the seller, and such amount may either be paid fully or promised to be paid in due course or partly paid and partly to be paid eventually. 
5. The act of transferring the ownership of the property from the seller to the buyer. 

The terms of the Contract Act will govern all the contracts, also mandate that the seller and buyer are competent for entering into the contract. Both the seller and buyer should – 

1. Have attained a mature age
2. Should necessarily be of sound mind 
3. Are not prohibited under any judgment or law of a court for entering into the contract

For a sale agreement to be valid and binding, this is necessary to provide all correct and full descriptions of the seller and buyer as well as the property that is subject to sale. Any discrepancy in the identity or description of the property may adversely affect the seller’s title. Where the consideration is agreed to be paid in future, either in full or in part, the buyer may obtain a confirmation deed from the seller upon clearing all necessary payments to pre-empt the possibility of any further future disputes or claims.

Required details in sale agreement

While the law mandates the buyer should necessarily be aware and undertake all the required cautions before entering into a contract mentioning the property sale. Section 55 of the Transfer of Property Act also strongly mandates that the seller is required to provide representations and disclosure in the document to the buyer, which the buyer is entitled to enforce. Those mandatory disclosures and representations that are to be obtained from the seller are: 

1. The seller who possesses absolute ownership of the concerned property is entitled to convey the sale agreement in favour of the buyer. 
2. Absence of any defect in material, third-party disputes and claims or if in case there exists any nature of full disclosure of the same. 
3. Competence of the property’s seller to convey the title in favour of the property buyer. 
4. Nil encumbrance/lien on the property. 
5. Transfer and handover of the title deeds in the custody of the seller to the property’s buyer, with the receipt of entire consideration and handover of the property’s physical possession. 
6. The payment as well as clearance of all the dues of the government from the property’s seller. 
7. Covenant of the seller for executing further documents to fully secure the buyer’s rights, such as the transferring of utilities and municipal records to the buyer’s name. 

In addition to obtaining the representations and covenants, the buyer is also advised for securing indemnity from the seller in the sale agreement against probable defects in title to the concerned property or any breach of the representations, conditions or terms of the sale agreement. 

The indemnity contract would survive the execution of the sale agreement, and the buyer would be entitled to claiming costs and remedies against the property’s seller at any time in the future in case the mentioned title proves to be defective. The buyer of the property should strictly read the indemnity contract for ensuring that this is not limited or restrictive for a certain period and is not conditional. 

What are the components of a sales agreement?

A sales agreement is a document that supports the execution of the sale deed and registration of the same. The components of a sales agreement include

• Proposal of sale and purchase of a property 
• Property Details and description 
• Information about the property being free from legal encumbrance
• Details on the value of the property and payment schedule 
• What will be the method of property delivery
• Delivery of property documents post the final payment 

Things to check before signing a sales agreement

Before signing a sales agreement, you should always double-check about the following things 

• Name of the parties involved in the signing of the agreement
• Schedule of payment
• Details of the property 
• Details relating to possession of the property
• Map of the property
• Address of the property
• Encumbrance certificate
• The minimum time period required for transfer of property 
• Penalty clauses, if any
• Methods of resolving a dispute, in case of occurrence

Difference between a sale agreement and a sale deed

In simple terms, a sale agreement is a promise for the future, which states that a specified property will be transferred to the buyer or the rightful owner at a later date. On the other hand, a sale deed is a document that is to be considered the actual transfer of property ownership between two or more parties.

When it comes to a sale agreement, the liabilities and risks remain with the seller until the property has been transferred to the buyer. For a sale deed, as you could imagine, the risk along with the document is immediately transferred to the new property buyer.

While a sale agreement is an executory contract, which means it is not to be fully implemented until a later date, a sale deed is a completely executed contract binding both parties to the terms therein.

Most importantly, it’s not mandatory to register a sale agreement immediately (regulations may differ across states). However, a sale deed needs to be registered mandatorily with the local and regional government authorities.

Stamping and registration of a sale agreement

A crucial requirement for a sale agreement format to be valid, enforcing and binding, the properly formatted copy with all the necessary clauses should be signed by both the parties –seller and buyer. 

This sale agreement copy should be appropriately stamped as per the requirement under the Indian Stamp Act, 1899 or the legislation of the respective states. The sale agreement is registered at the jurisdictional Sub-Registrar of Assurances office upon the payment of requisite registration charges as mandated under the Registration Act of 1908. 

A document that is not properly stamped or is unregistered will not be permitted as evidence, and this transaction is deemed to be incomplete until all the statutory requirements are completely fulfilled. 

When a party to the sale agreement is unable to be present for the execution and registration and is represented by a holder of power of attorney, this is necessary to examine this document thoroughly and is also duly stamped as well as registered. 

Specifically, where the seller of the property is authorized by an attorney, then the document’s terms may be suitably scrutinized. This is to ascertain that the attorney is authorized for executing and registering the sale agreement,to receive the right consideration and to complete all the necessary formalities for the purpose of conveying the suitable title to the buyer. The buyer is entitled to retain the original sale agreement as evidence of this property ownership. 

Conclusively, no matter if you are a seasoned investor or just looking for a property for self-use, ensuring a well-drafted Property Sale Agreement is a must. Equipped with the information in this article, we hope that your quest for a new home will be a lot less troublesome.

FAQs

What is the validity of a registered sale agreement?

A registered sale agreement is deemed to be valid for three years. In the presence of a negative clause in the agreement, for instance, in case the buyer is required to register a property within three months, the limitation is then extended by such a period. 

What are the things that I should necessarily check in a sale agreement

The major things that you should necessarily check in a sale agreement are-
1. Details of the sellers and buyers (name, addresses and age)
2. Description of the concerned property that is being sold
3. The sale amount includes the advance payment that has been paid and also the payment mode.

Does a sale agreement need to be registered?

A sale agreement necessarily needs to be registered as per the provisions mentioned in the Registration Act, 1908.

Is a sale agreement valid if not registered?

A sale agreement is deemed to be invalid if it is not registered. But on the basis of peaceful possession for the long term, ownership in the property is deemed to be valid. In your case, this is considered to be an evasion of stamp duty. If any time any question would arise, to get the sale agreement registered, you may have to pay the required stamp duty as per the present value.

What usually happens when a sale agreement has expired?

Within 45 days of the expiry of the sale agreement, both the seller as well as the buyer would have to revalidate the sale agreement’s duration as per mutual agreement and extend the same on mutually agreed terms. 

Is a sale agreement binding?

A sale agreement is a crucial document in the complete process of sales and purchase of a property. This particular agreement contains all the necessary terms and conditions that bind both parties. This records the necessary understanding that is reached between the parties and binds them.

What is meant by sale agreement possession?

The agreement of selling with possession is a special instrument that requires payment of the applicable stamp duty to a deed of conveyance. This is not in dispute that the property’s possession has been delivered in favor of the applicant. He has, thus, been exercising some rights in or over the concerned land. 

When does a sale agreement become a sale?

A sale agreement becomes a sale when time elapses or all the necessary conditions are fulfilled that are subject to which the property is to be transferred to the buyer.

What is a Sale Deed in Real Estate and Components of a Sale Deed ?

What is a Sale Deed?

A sale deed is basically a legal document that enables the owner or seller of the property to transfer the rights of the property in the name of the buyer. Register the property at the local sub-registrar office once the seller draws the sale deed draft. In several cases, people often ask if it is mandatory to get a sale deed registered. Yes, it is very critical to get the sale deed registered. Until a sale deed is not registered, the buyer can not become the rightful owner of the property in the context of the law. 

The seller is the vendor in the sale deed, and the buyer is the vendee. The meaning of sale deed in Hindi is Bikrinama or Bainama paper. Similarly, the sale deed meaning in Marathi is Vikri Karara. Also, in some cases, people sometimes refer to the sale deed as the title deed. However, there is a difference between a sale deed and a title deed in a legal context. 

Further, at the time of the creation of the sale deed, various components are to be taken care of. Along with the elements, the sale deed must include several clauses per the Transfer of Property Act.

A sale deed includes everything from the obligations and rights of both parties to the property’s details. At the time of creating the sale deed, write the sale deed draft first. Afterwards, as per the requirement of the buyer and seller, a few clauses can be added or removed from the sale deed draft to finalize it. Once the sale deed draft is completed and signed by the parties, register the sale deed in the buyer’s name upon its finalization. 

Documents required at the time of creating the sale deed draft include building plan, allotment letter by the builder, recent tax receipts, recent utility bills (electricity), power of attorney (if applicable), title documents, and in case of resale of property all previously registered agreements. 

At the time of registration of the sale deed, the buyer must pay the stamp duty required. Presently, the charges on stamp duty vary from 4 to 6 per cent on the property’s sale value. Different states levy different amounts of stamp duty on properties.

Components of a Sale Deed

When creating the sale deed draft, several essential components are included in the document. Following are the things that must be a part of the sale deed draft. 

1. Details of Both the Parties: Details in terms of the name of both parties, contact numbers, and age are recorded in the sale deed draft. 
2. Property Details: This section includes the property’s details, such as its complete address, area of the property, including the dimensions, details of construction. 
3. Indemnity Clause: This particular clause is added to the property to ensure that the seller frees the buyers from all the previous taxes, loans, and charges related to the property. Also, the seller will pay up any mortgages and loans before finalizing the sale of the property. 
4. Payment Details: The price at which the owner will sell the said property should be specified in the sale deed. Along with the sale price of the property, the information related to the advance payment made by the buyer must be stated clearly in the sale deed. Information on the amount paid in instalments, date of each instalment should also be mentioned in the document. 
5. Mode of payment: The method of payment, i.e., how the amount will be made for the property purchase, must be recorded explicitly in the sale deed. The standard modes of payment, such as bank transfer, cheque, and cash, are clearly stated in the sale deed. 
6. Possession of Property: The sale deed will record the date the buyer will get possession of the property. 
7. Witnesses of the Property: The testimonium clause of the property includes that two witnesses are mandatory for attending the sale deed. At least one witness from both sides, i.e., buyer and seller, should sign the sale deed. The witness has to share their complete name, address, and age. 

In addition, the seller of the property must also make some mandatory disclosures to the buyer in the sale deed. These disclosures include defects in the property related to material, declaration of disputes, if any, execution of conveyance of property correctly, and clearance of taxes and other charges related to the property, among others. Considering that the sale deed includes all the rights and the obligations of both parties in detail, its implementation reduces the risk for both parties.

Getting a Certified Copy of Sale Deed

With the establishment that the sale deed document is of the utmost importance, the property owner should maintain the sale deed with complete care. However, if the property owner loses the sale deed at any given point in time, the owner must file a complaint at the nearest police station. 

After filing the complaint (FIR) at the police station, a non-traceable certificate is issued to the property owner. Post the issuance of the non-traceable certificate, publish an advertisement in the newspaper about the loss of sale deed. The ad must include essential details. As the next step, you need to file an affidavit and the application to the sub-registrar office to get a certified copy of the sale deed. 

The affidavit must be notarized and must have a copy of FIR, non-traceable certificate, advertisement, and details of the property attached to it. The affidavit must also have a signed undertaking attached, stating that the information shared is genuine. Also, a specific amount of fee has to be paid to obtain a certified copy of the sale deed. Once the process is complete, the certified copy of the sale deed will be issued after 2 to 4 weeks.

What is the Sale Deed Number?

The Sale Deed Number gets generated after the document registration and the payment of stamp duty and registration charges. You can find the sale deed number on the payment slip. Also, it is mentioned on the top right corner of every page of the entire sale deed document.

Format of the sale deed number: Document Number/Year/Sub Registrar Office initials

Sale Deed Documents Required for Property Registration

Here are a few major sale deed documents required for property registration.

• Sale Agreement
• Title Deed Draft
• Extract
• Sharing Agreement signed by the builder and property owner
• Allotment Letter from the Housing Board
• Power of Attorney, if any
• No-Objection Certificate, in case of property resale
• Blueprint of the authorised parties
• Completion Certificate
• Property Tax Receipts
• Encumbrance Certificate
• Stamp Duty Receipt
• Identity proof of all the parties and witnesses involved
• Possession Letter
• Property Papers from the bank, in case a loan has been taken against the property
• Occupancy Certificate
• Passport-size photographs

Cancellation of a Sale Deed – Is It Possible? 

Cancellation of the sale deed is the revocation of purchase rights in the case of a property. However, it can be cancelled only under specific instances. To cancel a sale deed, one of the parties involved is not so satisfied with the deal agreed upon. The said party has to agree to the claim of dissatisfaction in front of the court of law. Also, there must be a genuine reason why one of the parties wants to cancel the sale deed. Once the reason is established, the petitioner must get an order from the civil court and present it to the registrar to get the sale deed cancelled. The sale deed can be cancelled under Sections 31 and 33 of the Special Relief Act, 1963. A sale deed can be cancelled for the following reasons: 

• The deed was created under undue influence
• The deed is void if a minor has executed it 
• Fraudulent activity in the creation of the deed or transfer and transaction
• Misinterpretation of facts to get a deed signed
• If the execution of the sale deed can cause harm or injury to the petitioner. 

Things to Remember When Executing a Sale Deed

Here are a few major things to remember when executing a sale deed.

• The sale deed must include a clause that transfers ownership rights to the buyer once the purchase is complete.
• The title of the property must be free of all encumbrances.
• The registrar’s office must verify the encumbrance status.
• All utility bills including water bills, electricity bills, property tax, etc. related to the property must be paid.
• There must be no further dues such as maintenance charges, pending.
• A sale deed must specify all terms and conditions under which the property has been sold.

The Bottom Line

Lastly. a sale deed is a vital document as it establishes property ownership. The sale deed also includes all the details related to the property, buyer and seller, and payment along with other things. The buyer pays the stamp duty for registering the sale deed. The sale deed must be maintained by the property owner properly. If the sale deed is lost, getting a certified copy of the sale deed from the sub-registrar office is a lengthy process. In case of any discrepancy, one can challenge the registered sale deed for witnessing a sale deed at least one person from each party’s side must sign.

FAQs

Why is a sale deed required?

The sale deed document is, in a way proof of ownership document. It is a critical document, especially when you have to sell your property. In addition, before the sale deed document is finalized, all property-related taxes need to pay in full. 

Is there any validity of the sale deed ?

The critical factor in the case of a sale deed is its registration. In the case of a registered sale deed, the validity is until the owner plans to sell the property to another person, as in the case of the sale of the property, the owner’s name on the sale deed changes. 

Who makes the sale deed ?

The original owner of the property, whose name is there on the sale deed, prepares the sale deed at the time of selling the property. The property owner, with the help of a lawyer or property advocate, drafts the sale deed. 

Can you sell a property without the original sale deed?

Buyers need to exercise caution if they plan to buy a property that doesn’t have an original sale deed. Considering that the sale deed is a critical document, there could be considerable risk in buying such a property.

Can a registered sale deed be challenged?

Yes, one can challenge a registered sale deed. However, there are specific clauses associated with it. Connect with a property advocate and seek guidance for challenging the sale deed. 

Is a sale deed necessary for a home loan?

Yes, a sale deed is a critical document; thus, it is required for a home loan. At the time of applying for the home loan, the owner of the property has to submit the original sale deed to the bank. Once the loan amount is repaid, the lender will return the sale deed to the owner. 

Can the sale deed be executed by power of attorney ?

Executing a sale deed through power of attorney is inappropriate and an invalid way of property transfer.

What to do if I have lost my original property documents ?

If you have lost the original sale deed of the property, you need to file an FIR at the nearest police station. The FIR copy must be kept safe with the owner for future reference purposes.

What is a Conveyance Deed in Real Estate & Why Is It Important?

Conveyance Deed Meaning

A conveyance deed is a legal document used to transfer the property title from one person to another as a gift, an exchange, a lease, a mortgage, etc. A gift deed, mortgage deed, lease deed or sale deed can also be called a conveyance deed.

Importance of Conveyance Deed

A conveyance deed is an important document that one needs when one owns a property:-

• Serves as evidence: If a legal dispute arises, the conveyance deed works as evidence. It will help resolve the issue soon.
• Proof of ownership: A conveyance deed works as proof of ownership. It mentions the ownership right of property. 
• Transfer property rights legally: With a conveyance deed, you can quickly transfer property rights to another person.

Note: Please remember that conveyance deeds should be registered at the sub-registrar’s office after stamping on non-judicial paper. The transfer is made public, and then the process of conveyance deed is completed. 

What is the difference between a sale deed and a conveyance deed?

Conveyance deed is a broader term that includes any property ownership transfer in the form of a gift, mortgage, lease, exchange, etc., in favour of the buyer. A sale deed is a legal document to transfer ownership through a property sale. All sale deeds are conveyance deeds, but not all are sale deeds. All deeds used to transfer property rights are conveyance deeds, and the sale deed is among them.

What should be there in a conveyance deed?

The conveyance deed should have the following:

• Defined boundaries of the property
• Power of attorney (if any)
• Chain of title that includes all legal rights to the present seller
• The details on how the property will be handed over to the buyer
• A memo stating how property ownership has been received
• Signatures of both parties that imply the buyer and seller
• Other terms and conditions that are concerned with the property transfer
• Things to check before executing a conveyance deed
• The seller must clarify that the property is free from any legal encumbrance.
• In the case of mortgage property, the mortgage must be cleared before the deed is signed. Buyers can check these details at a local sub-registrar’s office.
• The conveyance deed must include the exact possession date on which the property will be handed to the buyer.
• Within four months of the execution of the deed, all the original property documents should be submitted at the local sub-registrar for registration.
• At the time of registration, the conveyance deed has to be signed by at least two witnesses.

Types of Conveyance Deed

Following are the different types of conveyance deeds:-

Freehold Property Conveyance Deed: This conveyance deed is created for a property converted into a freehold property by an authority. 

Leasehold Property Conveyance Deed: Leasehold property deed of conveyance is for leasehold ownership of property. A leasehold property is a property where an owner has the right to everything within the property’s walls; nothing can be done on external walls.  

Mortgage Property Conveyance Deed: A mortgage property conveyance deed is for the mortgaged property. 

What is the use of a Conveyance Deed?

As we discussed, a conveyance deed is a legal document used to buy and sell a property. The presence of this document will save you from fraudulent activities. You must ask for a copy of the conveyance deed when buying a property.

What is the procedure for obtaining a conveyance deed?

A conveyance deed is drafted on a non-judicial stamp paper of requisite value and is registered at the nearest sub-registrar office. The buyer should pay post-registration, stamp duty, and registration fees. Each state has different charges for stamp duty and registration charges.

Who Prepares Conveyance Deeds?

To prepare a conveyance deed, you will need the help of a lawyer. They will create legal documentation of the transfer of ownership and authority. To ensure that it is a legal transaction, the government intervenes, and for the same, there is a requirement for a lawyer. Also, in some cases, you might need a real estate agent to document the deed properly between two parties. On the conveyance deed, a buyer has to pay a stamp duty.  

List of required documents for Conveyance Deed

• Registered Agreement for sale of property with the seller
• Mutation entries/ Property card
• Location plan and survey plan from the revenue department
• Layout plot plan and structure plan approved by the appropriate authority
• Certificates such as Commencement Certificate, Completion Certificate, Occupancy Certificate (exempted if not available), architect certificate
• An entire list of owners
• Stamp duty payment receipt
• If the seller executes the deal, power of attorney or development agreement is required
• Draft conveyance deed
• Importance of conveyance deed
• In case of any dispute, conveyance deedserves as an evidence
• It certifies that the property is free from disputes
• Acts as proof of land ownership
• Legally transfers the property rights to the buyer

What if the Conveyance Deed is Lost?

In case the conveyance deed is lost due to negligence, then you need to take the following steps:-

• An FIR (First Information Report) should be filed with the police
• An advertisement about the loss of conveyance deed can be in the newspaper
• Prepare an affidavit and get it notarized. An affidavit should have all the property information and FIR 
• You can also get a certified copy of the deed from a sub-registrar’s office. However, you will have to pay some charges to get this document.

Cancellation of a Conveyance Deed

According to Sections 31, 32 and 22 of the Specific Relief Act, one can cancel a conveyance deed if a person believes the deed is revocable or can cause them harm if left unsettled. If the deed was registered according to the laws of the Indian Registration Act of 1908, one could cancel the conveyance deed via mutual agreement of the involved parties. 

What is Deemed Conveyance Deed?

A deemed conveyance deed is where the transfer of right, title, and land interest is done in the name of the housing society. The deemed conveyance deed is done once the state government issues it. However, to have it, one should apply for it with the required documents to the concerned authority. One must ensure both parties are available when the deemed conveyance deed is made because the authority will pass the law only after hearing the parties.    

Documents Required for Deemed Conveyance Deed

You will have to submit the following documents to apply for a conveyance deed:-

• Land documents like land records and municipal records 
• Agreement copy between land owner and developer
• An agreement copy of each flat should be registered and stamped
• Approved building plan. 

Conditions Attached with Deemed Conveyance Deed 

• A cooperative society should be made 3-4 months before applying for deemed conveyance deed.
• A minimum of 60% of the flats should be sold.
• A resolution for the deemed conveyance deed should be passed among the society. 

Key Things to Remember in Conveyance Deed

• A sale deed can be a conveyance deed but not vice versa
• Conveyance deeds are regulated under the Registrations Act and executed on non-judicial stamp paper.
• A conveyance deed should be registered with the sub-registrar once both parties sign it.
• A conveyance deed must be signed at least by two witnesses

Summing Up: Conveyance Deed

A conveyance deed is a legal instrument that legally transfers the rights to the property buyer. A property purchase is incomplete if a conveyance deed is not prepared. According to the Registrations Act, one must register it with the sub-registrar. Also, two witnesses must sign the deed.

FAQs

Why conveyance deed is required?

The conveyance deed is a legally document that signifies that the seller of a property has transferred all the authority and the ownership regarding a property to the buyer.

What are the two types of conveyance?

Conveyance may occur either through a sale of the land or property or transfer as a gift or inheritance. 

Can conveyance deed be challenged?

Yes, a conveyance deed can be challenged in the court of law.

Is conveyance deed necessary for home loan?

Yes, if you are planning to avail a home loan, you will have to submit the conveyance deed.

What is conveyance certificate?

It is a legal document that is exchanged between a a transferor and a transferee and consists of ownership rights of the property being transferred.

FAQs

Q:What is a Builder Buyer Agreement?

A:A builder buyer agreement is a document which specifies the modalities, conditions and clauses between a builder and a homebuyer.

Q:Is a Builder Buyer agreement a legal document?

A:Yes, a builder buyer agreement is legal.

Q:Is Builder Buyer Agreement binding on the builder?

A:Yes, a Builder Buyer Agreement is binding on the builder.

Q:Is Builder Buyer Agreement admissible in court?

A:Yes, a Builder Buyer Agreement is admissible in a court of law.

Q:What if a builder deviates from Builder Buyer Agreement?

A:In such cases, the homebuyer can approach RERA and file a complaint against the builder.

What is BBA in Real Estate and What is the full form of BBA in Real Estate?

BBA Full Form is Builder Buyer Agreement.

What is Builder Buyer Agreement (BBA)?

A Builder Buyer Agreement (BBA) is actually the ‘Agreement for Sale’. The Builder Buyer Agreement certifies the concerned property is transferred in the name of the new owner, and this transfer is subject to mutually acceptable terms and conditions. The Builder Buyer Agreement governs the entire sale of property. It includes clauses, annexures, conditions and peculiarities about the sale or transfer of property.

Latest Update: Builder Buyer Agreement

Builder is legally Bound to get the “Completion Certificate (CC)”: Supreme Court 

In a recent development, the Supreme Court has opined that a builder is legally bound to get the Completion Certificate for the structure. The builder must get the Completion Certificate even if the flat owners take possession before issuance of such certificate. 

The SC said that although it was not right on the part of flat owners to take possession before the issuance of the Completion Certificate, this should not prevent the builder from applying for Completion Certificate. It is not the duty of the flat owner but the builder to get a Completion Certificate.

A builder buyer agreement is a document which specifies the modalities, conditions and clauses between a builder and a homebuyer. Clauses of the builder buyer agreement are related to the property concerned, delivery details, and conditions related to default and delay in project delivery among other clauses.

At one point, the Indian real estate industry was marred with instances of stalled real estate projects and home buyers’ money got stuck in such unfinished projects. Before the commencement of RERA, there was no solid resort or mechanism for aggrieved homebuyers. However, the Builder buyer agreement is one document which protects the interests of the homebuyers and ensures that the delivery is in accordance with the agreed terms and conditions.

In light of the Supreme Court’s direction to frame a Builder Buyer Agreement which conforms to the Real Estate (Regulations and Development) Act, 2016, the importance of the Builder Buyer Agreement has increased manifold.