Sale Deed – Meaning?

Sale Deed is a legal document describing the transfer of right, title and ownership of Property by a Seller to a Purchaser at a price either fully paid or to be paid in installments at a future date.

A Sale Deed is executed only after entering into an Agreement to Sale and it is governed by the Registration of Property Act, 1908. An Agreement to Sale should ideally be executed before the Sale deed to bring out the mutually agreed terms and conditions of sale. The entire amount of sale transaction also known as sale consideration is paid at the time of registration of Sale Deed. However, deferred payment of sale consideration doesn’t attract passing of the title to the Sale Deed.

Contents of a Sale Deed: The foremost thing to decide is the title. It becomes important to ensure if the title to the property is free of all encumbrances. Scrutinizing the title documents is a process of knowing the original owner of the property, flow of title and the present owner of the property. After ascertaining that there are no encumbrances, it is also important to ensure that all the statutory payments like water bill, electricity bill or property tax have been paid and no further payments or permission are required for the transfer of property through a sale deed.

The Sale Deed contains the complete details of Buyer and Purchaser, full description about the property which is going to be transferred, details of settlement of loan, if any, the total sale amount and the advance payment mentioning the date of payment along with the mode of payment and indemnity stating the liability of Buyer and Seller if either of them fails to fulfill the terms of the agreement. Sale Deed also mentions the date when the subsequent possession of property with complete title will take place on the payment of remainder amount or fulfillment of some condition.

Execution of Sale Deed: The execution of Sale Deed takes place by affixing either thumb impression or signatures of both the parties. Each Page of the Sale Deed is signed by the parties and any addition, subtraction or alteration has to be verified with signatures by both the parties.

Registration of Sale Deed: Every sale of tangible immovable property exceeding the value of Rs 100/- requires compulsory registration in order to make the execution of sale valid. By the purview of Section 17 of Registration of Property Act, 1908, both parties are required to be present before the jurisdictional sub registrar’s office within four months of the execution of the Sale Deed along with all the original documents. Stamp duty is paid by the purchaser according to the stamp duty rates of the respective state. After this, the registered copy of the sale deed is handed over to the purchaser by the sub registrar office.

Conveyance –
a generic term for any written document which transfers (conveys) real estate property or real property interests from one party to another.
So by the above definition its very clear that if someone willingly transfers their legal right of the property to another party they would need to create a document which transfers this right. Such a document is called Deed of conveyance.
The important point here is – Willingly. Now in case of housing societies the builder/promoters have to ideally create deed of conveyance and hand over it to housing societies that to within 4 months after project completion. However, due to lack of knowledge many builders do not create such documents. There have been cases where builders have later on denied to create such documents and asked additional money to provide signatures on these documents. You will find all sorts of reasons for not creating the document. This results in issues for societies in future. Therefore, government has amended the Maharashtra Ownership Flats Act, 1963 (MOFA) to make sure if builders run way from such responsibilities the societies do not suffer. This amendment is called Deemed Conveyance. This amendment allows society owners to gain the legal rights of the land even if the builder is not willing to transfer the rights, in front of designated competent authority.

Deemed Conveyance –
The Promoter (Builder/ Developer) is legally required to convey the land and the building within 4 months of formation to the society or any legal body of the flat purchasers. However, it has been the experience that many promoters (Builders/Developers) have not conveyed the land and building to the legal bodies. Therefore, government has amended the Maharashtra Ownership Flats Act, 1963 (MOFA) and provided for the deemed conveyance in favor of the legal bodies. Under the provision, deemed conveyance means after the expiry of 4 months of formation of the legal body, the land and building is deemed to have been conveyed to the legal body and to bring the same in the revenue record, Competent Authority has been designated who will hear the parties on the basis of applications received from the aggrieved party and transfers the title in favor of the legal body by passing the necessary order and deemed conveyance certificate and appoint an authorized officer to execute the conveyance deed in favor of the society and execute on behalf of non-co-operative builder or the land owner. Getting the title of land and building by adopting the above procedure is known as deemed conveyance.