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
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 execution of the Sale
Deed. Any previous charges or mortgage should be cleared before execution of
the Sale Deed.Clearances, and permissions which are 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 signature. Each page should be signed by all the sellers. Any overwriting,
cancellations, erasures and additions have to be authenticated by full
signature of the parties.
Execution
of the Sale Deed requires to be witnessed by two witnesses. The witnesses shall
give their full particulars and addresses.
SaleDeed 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 Registrar's 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 the seller
signs the Sale Deed, it is compulsory that only the registered Power of
Attorney holder can represent 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
vendor 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 pay order. The purchaser may contest it in which case the Sub
Registrar will keep registration pending and send it to the Registrar of Under
Valuation to arrive at the 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 the precautions while preparing the Sale
Deed. It is a most important document and decides the fate of the purchaser.
The purchaser has to preserve the Sale Deed very safe.
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