All you need to know about the sale deed

What are the steps in the process of buying a property?

Let’s first discuss the steps in buying a property. When purchasing a property, the first step is negotiating the price with the seller. To confirm the booking, you must pay an advance to the seller. A builder must first pay a 10% deposit and sign a booking form before purchasing a property. After the buyer and seller agree on terms, they sign a contract that includes a time period for payment (generally two to three months). But this is not a sale deed. It’s important to note the information, facts and details in a sale deed and here’s everything you need to know.

A sale is completed when the seller transfers ownership rights to the buyer. The deed of sale is drawn up and registered with a specific state authority, making it valid.

How is a Sale Deed Executed? – RoofandFloor Blog

What is Sale deed?

The deed of sale is a legal and final document transferring ownership of a property. It describes the terms of the sale and is signed by both the buyer and the seller. Depending on its purpose, a contract of sale may also be called a contract of sale or a contract of sale mortgage. A bill of sale is governed by the common law, the Contracts Act, the Transfer of Property Act, etc. It uses certain terms that are standard across all jurisdictions, but certain details relate more specifically to the Indian context such as consideration (usually the same as the amount paid).

Benefits of Sale deed:

  1. Protects Parties – A well drafted deed protects both the buyer and the seller by preventing ambiguity and minimizing legal risks.
  2. Defines The Area – Buyers find it helpful to specify the square footage and locations of properties on paper.
  3. A sale deed is a legal document that concludes a sale. It is enforceable by law.

Clauses / Elements in the Sale deed you should know:

The sale deed includes the following details:

  1. Details of the party – The details of the party include the names, ages, and addresses for both buyers and sellers.
  2. Details of the property The location of the property, a description of the property, and construction details.
  3. Payment details – Payment details will show you the price of your property. It also lists the payment mode like a credit card (Visa, MasterCard, Discover) or direct transfer from a bank account.
  4. Handing over the original papers of the property and the possession details.
  5. No dues on the property – On the property, no dues, such as loans, tax, liability, and other dues.
  6. Indemnity clause –  An indemnity clause in a sale deed provides protection for the buyer’s interests. It is important to draft the document with care to avoid future disputes. Indemnity clauses under the sale deed seek compensation if there are any losses or expenses in the future.

What is the process for executing a Sale deed?

  1. Draft sale deed – To execute a sale deed, you need to first draft a sale deed. This document records all of the property owner’s rights, duties, and interests in the property. This includes encumbrances, liens, loans, taxes, mortgages and deeds for neighboring properties if they do not belong to the same legal entity.
  2. Pay Stamp Duty – Stamp duty is a tax paid to the Indian government on the sale of real estate. It is usually paid by the buyer and varies from state to state. For more details see our detailed video on stamp duty.
  3. Signed – Both buyer and seller must sign the sales deed. This document ensures that they have both agreed to the terms of the sale transaction. The deed must be registered within four months of the date it was signed in order to be valid.
  4. Registered – A sale deed serves as both proof of ownership and an essential legal document required for taxation purposes. It is an affidavit signed by both the seller and buyer. This is submitted to the revenue department when registering property under several tax laws. It must be registered within 4 months of signing the document. If this deadline is exceeded, you risk losing your right to purchase the property.
  5. The seller gives the original documents – The seller delivers the original documents and the buyer pays to execute the sale deed.

The following are the important, procedural, and legal terms you should know about sale deed if you are planning to sell your house.

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CREDAI and Builders’ Rift over Code of Conduct

Firstly, several developers declined to abide by the code of conduct laid down by CREDAI. Following this, the association has expelled several developers, while some have resigned discontinuing their involvement with the organisation.

Opposing the self-regulation code, the builders refused to sign the association’s code of conduct. The bone of contention for builders was the code of conduct that primarily outlines transparency clauses that builders have to follow.

Ultimately, CREDAI expelled some builders, as they did not comply with the directives despite the body having issued several notices to them. DLF, Hirco and Hiranandani Realtors have been expelled from the Chennai Unit, whereas four builders have resigned from the Bangalore unit.

CREDAI has further decided to expel non-compliant builders in NCR and informed the expelled builders that they can be a part of CREDAI unit only if they sign the code of conduct.

 

Affordable Housing Policy to be implemented by the State Government from 15th April.

From April 15, the state government’s affordable housing policy is set to be implemented. With a preliminary notification already out, the policy will be implemented after the final notification in a month’s time.

This decision took place at a recent meeting between Additional Chief Secretary (Urban Development Department) TC Benjamin and representatives of Confederation of Real Estate Developers’ Associations of India (CREDAI) from Pune, Nagpur, Kolhapur, Nashik and Aurangabad.

The government in the notification has made it mandatory for all projects on more than 2,000 sq m land to reserve 20 per cent of the land or constructed space for small-sized housing.

Benjamin said that, “The state has a dearth of such housing and this initiative will help bring about more such houses in residential projects. It will have to be implemented by the builders after April.”

Builders expressed reservations about whether the 20 per cent of the land should be reserved in the same area. However, it was decided that they could have a little farther but in the same zone. To this Benjamin added that, “They have to provide the housing with almost the same kind of infrastructure.”

However, most of the builders had reservations about having the economical housing on the same campus but agreed to have it a little farther away from their projects.

Pune CREDAI representative Satish Magar, who attended the meeting, said, “We are open to the policy but had some issues, which we discussed.”

Income Tax Department to Probe Suspected Real Estate Deals.

The Income Tax department is looking into all the alleged deals of real estate to check the contribution of black money and tax dodging of such dealings in the last few years. The process starts in New Delhi and eventually would move to other metros.
“Analysis of the Property deals will start with New Delhi and appropriate actions would be taken as required”, Sudhir Chandra, Chairman CBDT said. In the past few years after IT department had received complaints about the black money involvment, IT department has raided many real estate developers, including the major ones.
IT officials says that they had uncovered lot of black money from most of the builders. A new process is being levied which would keep an eye on sources of funding for developers projects which includes individuals as well as property dealers.
Approx 40-60 percent of the cash componenet is unaccounted on papers. This helps builders to avaoid tax on cash  incomes. The deaprtment is focusing very closely more on dealers rather than small ones. The amount of assets detained by the IT department had been more than doubled in the last four years, while the number of raids had came down. IT department searched 529 groups in 2006-07. The number of searches dropped to 454 in 2007-08, 429 in 2008-09 and 409 in 2009-10.

Rush is back

We often read that recovery in realty market is visible now. Such news has reached to general people and they have started looking at property of their choice at affordable rates. Competition between builders results into rate cuts and attractive offers for buyers. It can be easily figured out by taking a look on the increment in property registration in major cities. With the improvement in macro-economic conditions and affordability of buyers, developers witnessed a stronger response to new launches across cities over the past quarter.