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 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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