Property

Conveyance Deed and Sale Deed: Two sides of the same coin?

Nikhil Chachra
Nikhil Chachra 03 min read 2955 Views
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It is everyone’s dream to be a proud owner of a house. Isn’t it? No matter big or small, after all your owned house is your own. While the process of buying a house in India is fairly complicated, it is a known fact that the business of real estate is marred with lack of transparency and corruption at the grass root levels. To make matters worse, there are hardly any government authorised information outlets from where you can get complete information about the process of buying a house and the legal formalities involved.

In the absence of this valuable information, the entire process of owning a house becomes even more nightmarish for prospective buyers, let alone knowing the difference between what a particular document means and why that document is important in the purchase process. Ask any individual who is going through the process and he or she will tell you certain realities that are horrifying to hear.

Nevertheless, we resolve to clear the air for you. By the end of this article, you will have a reasonable understanding about mandatory property documents like conveyance deed, sale deed, difference between these two documents and so on.

What Is A Conveyance Deed?

It is a legal document that is used to willingly transfer the title of the property from one person to the other. The transfer of title can be in the form of either a gift or a lease or an exchange or a mortgage or a sale. A conveyance deed essentially has the following characteristics:

  • Conveyance is an act of transferring ownership of property from one person to the other.

  • Deed is the legal document that is a binding contract between two parties and in India it is governed by the Registrations Act 1908.

  • Conveyance Deed is the most important document required to buy a property.

  • Without conveyance deed, property purchase is invalid.

People Also Read This: Society Conveyance Deed: All You Need to Know

What Is A Sale Deed?

Before going further, we must also understand this. It is a legal agreement between the buyer and seller of the property where seller agrees to transfer his or her ownership to the buyer through sale on meeting certain mutually agreed terms and conditions. The important characteristics of a sale deed are:

  • A sale deed is one type of a conveyance deed

  • A sale deed and an agreement to sell are two different legal documents.

  • An agreement to sell does not transfer ownership or title of property from seller to buyer.

  • Sale deed includes general terms and conditions of property sale like details about the property being transacted, current owners (seller), new owner (buyers) of property, detail of loans (if any), utility payments like water and electricity, statutory payment like property tax, details of transfer of property title, rights and ownership, agreed amount of transaction and payment mode (full or part) and indemnity clauses.

Those who read this Article also Consulted a Lawyer about Conveyance Deed and Sale Deed.  

 

What is the Difference Between Conveyance Deed and Sale Deed?

The two terms, conveyance deed and sale deed, are used very frequently in real estate transactions and not many of us know the difference between the two. To put it simply, these terms many-a-times are used interchangeably. However, there is only a small difference between these two documents – a sale deed is a type of conveyance deed whereas the conveyance deed is not considered as a sale deed.

Type of Conveyance Deeds

While there are so many jargons that you hear related to property documents, it is important to know various types of conveyance deeds that can be executed. There are three:

  • Freehold Conveyance – This means the owner of the property has free right on the property including both internal and external structure. This is issued to the owner of the property by the designated state authority (for example, Delhi Development Authority in case of properties in Delhi) marking the property as ‘Freehold’.

  • Leasehold Conveyance Deed – This means the owner of the property only has rights within the four walls of the property and not the external structure. Generally, the common area and the building is owned by the landlord.

  • Mortgaged Conveyance Deed – This means that the property is mortgaged with a bank or financial institution. However, the owner can enter and enjoy the privileges related to the property.

People Also Read This: Lease Deed Registration: Everything You Should Know

Contents Of A Conveyance Deed

It is also important to know the contents that go in a conveyance deed before two parties sign it. A conveyance deed document should have details about area of the property (demarcation), details of annexed property, full chain of titles leading up to the current owner (seller), details of property handover to buyer, possession letter(s) and all terms and conditions of the property transaction. Any person must also take care of following while executing a conveyance deed:

  • The owner of the property (seller) must certify that the property is free of any legal restrictions or disputes.

  • The seller should also produce the authorised payment receipts of utility payments like water, electricity and gas to the buyer.

  • The seller should also clear the property tax dues prior to execution of the deed and share the authorised payment receipts with the buyer.

  • The buyer must pay TDS on property sale amount to the respective state government and submit the receipt to the seller.

  • In case there is some loan taken against the property, it should also have details of the loan. The seller should clear the outstanding amount to the lender before executing the deed.

  • The seller should convey the exact date by which the final possession of property will be given to the buyer.

  • The conveyance deed should be executed in presence of two witnesses and they must sign the conveyance deed to mark their presence.

  • The conveyance deed should be submitted to the local registrar’s office along with all original documents for registration within four months of execution. This should be followed by payment of stamp duty and registration fee to the respective state government.

          Those who read this Article also Consulted a Lawyer about Conveyance deed. 

It is important to clearly draft legal document(s). It is even more important to get them executed carefully. Afterall, when it comes to matters as sensitive as property, you cannot afford any lapses. Talking to a Legal Expert is a right thing to do.

LegalKart takes pride in simplifying the interaction between you and an advocate, whether it is your first interaction or a second opinion. Talk to a LegalKart Expert today and get unbiased and honest answers to your problem. Right advice, ultimately can make a difference.

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