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

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.


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.

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