Sale Deed is also known
as conveyance deed. This is the document by which the seller transfers his
right to the purchaser, who, in turn, acquires an absolute ownership of the
property. This document is executed subsequent to the execution of the sale
agreement and after compliance of various terms and conditions detailed in the
sale agreement.
Before
the execution of the sale deed the title of the seller is to be established
beyond doubt. Copies of the documents of title must be scrutinized by an
advocate, well versed and experienced in property dealings.
If
there is any encumbrance on the property, such encumbrance is to be cleared by
the seller at his cost.
Clearances,
and permissions required to be obtained by the seller should be obtained prior
to execution of the sale deed.
Latest
encumbrance certificate of the property, subsequent to the date of the sale
agreement up to the proximate date of sale deed should be obtained, and such
certificate should be of nil encumbrance.
All
the persons having interest in the property should be made parties to the deed.
Particular attention needs to be paid in case of purchase of properties from a
Limited Company, Partnership Firm, Hindu Undivided Family, Trust, Power of
Attorney Holder and Minor.
Draft Sale
A
draft Sale Deed, containing full details of the parties, advance amount paid,
mode of balance amount payable, receipt of the balance amount by the seller,
handing over the original documents of the property, handing over the
possession of the property, handing over the authorization letter to transfer
power and water meters, signing of the application for transfer of khatha,
title of the seller of the property, indemnifying the purchaser in case of
defect in the title, easement rights, will be prepared by the purchaser’s
advocate. Such draft Sale Deed should be captioned as draft Sale Deed and shall
be signed by the purchaser’s advocate.
A
copy of the draft Sale Deed will be given to the seller for his approval. The
seller and his advocate will verify the draft sale deed and approve it, or may
suggest suitable deletions, additions or amendments. The purpose is to bring
forth the correct intention of the parties to the Sale Deed.
On approval
of the draft Sale Deed, the same has to be prepared on a quality or a document
paper. In Karnataka it may be prepared on good quality paper like bond paper or
green paper and the stamp duty may be paid by way of demand draft or pay order
or cash. The exact amount of stamp duty should be ascertained from the SubRegistrar office. Purchaser is liable to pay the Stamp duty as per value stated
in the documents or as per the Sub- Registrar office value whichever is higher.
Execution
After
the Sale Deed is prepared all the parties to the deed shall execute it by
affixing full signatures. Each page should be signed by all the sellers. Any overwriting,
cancellations, erasures and additions have to be authenticated by full
signatures of the parties.
The
execution of the Sale Deed requires to be witnessed by two witnesses. The
witnesses shall give their full particulars and addresses.
Sale
Deed of immovable property of value more than Rupees one hundred needs
compulsory registration. The duly executed sale deed should be presented at the
jurisdictional sub-registrar office. All the parties, including the
confirmation witnesses shall be present at the time of registration and admit
the execution. Purchaser also has to be presented for the execution of the
documents at the Sub Registrars office. In case the purchaser is not in
position to be present before Sub Registrar, he can give Power of Attorney to
any of his persons to sign and present the documents on his behalf. In case
seller signs the Sale Deed, it is compulsory that through the registered Power
of Attorney holder only can represent for him to present the documents before
the Sub-Registrar.
Registration
In
Karnataka, the Sub-Registrars office, take the photos of purchaser, vendors,
witness and also their thumb impressions and print the same on the Sale Deed.
The
vendors has to produce all the original documents pertaining to the property to
the purchaser. If the property is divided into one or more portions, the seller
has to give certified copy or Xerox copy of the documents to the purchaser and
has to give declaration to that effect. Generally, the larger portion holder
should get the original documents.
There
is a time limit for presenting the documents for registration. The time limit
is four months from the date of execution.
Thereafter a grace period of another four months is allowed on payment
of penalty. The maximum penalty is ten times of registration charges.
At
times, the registering authorities may dispute the stamp duty paid. In such
cases, the purchaser has an option of paying the additional stamp duty by way
of cash or payorder. The purchaser may contest it in which case the Sub
Registrar will do the pending registrations and send it to the Registrar of
Under Valuation to arrive at proper Stamp Duty.
Parties
have to quote their Income Tax Permanent Account Number in case the
transactions are done in cash for the property which values more than Rs
5,00,000. Parties, who have not yet been allotted Permanent Account Number,
will have to file Form No.60 or Form No. 61 in case of Agriculturists.
The purchaser’s advocate has to
take all precautions while preparing Sale Deed. It is a most important document
and decides the fate of the purchaser.
The purchaser has to preserve the Sale Deed very safely.
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