Sale and Lease
What is sale deed?
A sale deed acts as the main legal document for evidencing sale and transfer of ownership of property in favour of the buyer, from the seller. Further, it also acts as the main document for further sale by the buyer as it establishes his proof of ownership of the property.
The sale deed is executed subsequent to the execution of the sale agreement, and after compliance of various terms and conditions detailed in the sale agreement as agreed upon between the buyer and the seller.
The sale deed is the main document by which a seller transfers his right on the property to the purchaser, who then acquires absolute ownership of the property. It is also referred to as the conveyance deed.
The buyer should ensure the title of the seller before the execution of the sale deed. It should be checked whether the seller possesses a perfect title to the property or whether there is any charge or encumbrance on the property to which the buyer is subject. The seller should obtain the requisite clearances, approvals and permissions to transfer or sell the property prior to execution of the sale deed. In case of mortgages, the mortgagee may take possession of the sale deed as a security for the repayment of the loan.
How is a sale deed prepared?
Draft Sale Deed
Initially, a draft sale deed is prepared and approved by both the seller as well as the purchaser.
The draft sale deed tends to set down the terms and conditions of sale of the property. The draft sale deed contains details of the parties, details of property in question, sale consideration agreed upon, the advance amount paid, mode of payments, time limits for payment of consideration, time for handing over the original documents of the property, time for handing over the possession of the property, indemnity provisions for the parties etc. The draft sale deed is prepared on non-judicial stamp paper of requisite value as prescribed by the Stamp Act of the State concerned. The purchaser is liable to pay the Stamp duty in accordance with the applicable stamp rules.
On completion of all formalities, a sale deed is prepared. This is the main document for transfer of ownership of property.
- The deed is executed by all the parties concerned.
- All pages of the deed are to be signed.
- The deed should be witnessed by at least two witnesses giving their full names, signatures and addresses.
- The sale deed of immovable property needs compulsory registration at the jurisdictional sub-registrar office.
- All the parties’ concerned need to be present at the time of registration.
- All documents should be presented in original.
- In case the purchaser cannot be present personally before the sub-registrar, he can give a Power of Attorney to a representative to sign and present the documents on his behalf.
The documents should be presented for registration within four months from the date of execution. If it is not done within four months, a grace period of another four months is allowed on payment of penalty. A maximum penalty of 10 times the registration charges may be levied by the registrar. The liability to pay the stamp duty as well as the registration charges lies with the purchaser of the property.
A lease is transfer of an interest in an immovable property which is the subject of the lease and that interest is the right to occupy and use the property for which the lease is given for period and on such terms and conditions as agreed between the parties
The essentials of a lease are;
- Parties to the agreement;
- The identification of the property subject matter of the arrangement;
- Term of lease,
- Date of commencement and expiry.
A lease of an immovable property can be determined through 8 modes and it is only by one of these methods that the lease stands determined and the lessor gets back right of possession of the property;
- By efflux of time limited thereby;
- Where the interest of the lessor terminates on happening of an event
- The interest of the lessor terminates on, or his power to dispose of the same extends to the happening of any event;
- In case the interest of lessor and lessee becomes vested;
- Express surrender before the term is over;
- Implied surrender;
- When the lessee renounces his character.