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.All statutory payments like property tax, water and power
charges and any other payments due on the property should be cleared before the
execution of the Sale Deed. Any previous charges or mortgage should be clear
before execution of the Sale Deed.
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 Deed
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 Sub
Registrar 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 paymentof 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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