About Sale Deed
A sale deed is an actual transfer of ownership of a property. It is a legal document used in property transactions as evidence for the sale and transfer of property ownership in favour of the buyer from the seller. Who subsequently becomes the owner of the property in its entirety. A sale deed is also referred to as the final deed or conveyance deed.
When you buy or sell property, the transaction should be carried out and duly signed between and by both the parties i.e., Vendor and Purchaser. And it should be in the presence of at least two Witnesses. When executed, it should be registered under the Registration Act, 1908 within four months by the Sub Registrar. Thus, only with properly executed transactions, a sale can be completed.
Stamping and registration of a Sale Deed
This sale Deed copy should be appropriately stamped as per the requirement under the Indian Stamp Act, 1899 or the legislation of the respective states. The sale deed is registered at the jurisdictional Sub-Registrar of Assurances office upon the payment of requisite registration charges as mandated under the Registration Act of 1908. A document that is not properly stamped or is unregistered will not be permitted as evidence, and this transaction is deemed to be incomplete until all the statutory requirements are completely fulfilled. When a party to the sale deed is unable to be present for the execution and registration and is represented by a holder of power of attorney, this is necessary to examine this document thoroughly and is also duly stamped as well as registered. Specifically, where the seller of the property is authorized by an attorney, then the document’s terms may be suitably scrutinized. This is to ascertain that the attorney is authorized for executing and registering the sale deed, to receive the right consideration and to complete all the necessary formalities for the purpose of conveying the suitable title to the buyer. The buyer is entitled to retain the original Sale Deed as evidence of this property ownership. Conclusively, no matter if you are a seasoned investor or just looking for a property for self-use, ensuring a well-drafted Property Sale deed is a must. Equipped with the information in this article, we hope that your quest for a new home will be a lot less troublesome.Process of Agreement-to-Sale
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Frequently Asked Questions
Sale deed is a legally binding document specifically made to transfer the right,title and ownership of property from one person to another in exchange for a price.
The essential elements of an Agreement of Sale/Agreement to Sell include:
- Parties: Identification of the seller (vendor) and buyer (purchaser)
- Property Description: Detailed description of the property being sold.
- Consideration Amount: Sale price or consideration amount paid by the buyer to the seller.
- Payment Terms: Schedule of payments, including deposit, installments, and final payment.
- Transfer of Ownership: Clear statement of transfer of ownership from seller to buyer.
- Title and Interest: Seller's title and interest in the property, ensuring they have the right to sell.
- Warranties and Covenants: Seller's promises regarding property condition, usage, and any restrictions.
- Possession: Transfer of possession from seller to buyer, including date and time.
- Liabilities and Encumbrances: Disclosure of any outstanding liabilities, loans, or encumbrances on the property.
- Signatures and Witnesses: Signatures of both parties, witnessed by at least two individuals.
- Registration: Registration details, including date, place, and registration number.
- Stamp Duty: Payment of required stamp duty, as per local laws.
- Proof of Ownership: A Sale Deed serves as conclusive evidence of ownership transfer from the seller to the buyer.
- Legal Validation: It validates the sale transaction, ensuring it's legally binding and enforceable.
- Transfer of Title: The Sale Deed transfers the title of the property from the seller to the buyer, ensuring the buyer's rights.
- Protection from Disputes: A registered Sale Deed helps resolve disputes, as it's a government-recognized document.
- Financing and Loans: A Sale Deed is required for mortgage or loan applications, as lenders need proof of ownership.
- Government Records: Registration of the Sale Deed updates government records, reflecting the buyer as the new owner.
- Taxation: A Sale Deed is required for tax purposes, such as payment of stamp duty and capital gains tax.
- Inheritance and Succession: A Sale Deed helps establish clear ownership, making it easier to transfer property during inheritance or succession.
- Court Evidence: A registered Sale Deed serves as strong evidence in court, in case of disputes or litigation.
- Peace of Mind: Having a registered Sale Deed provides assurance and peace of mind, knowing the property ownership is secure.
- Proof of Ownership: To serve as proof of ownership and transfer of title from the seller to the buyer.
- Taxation: To calculate and pay stamp duty, capital gains tax, and other taxes.
- Security: To provide security and assurance to the buyer about their ownership rights.
According to the transfer of property Act 1882, Sale Deed is valid only if registered.
Benefits:-
Benefits:-
- Legal validity
- Public record
- Proof of ownership
- Protection from disputes
- Government recognition
Yes, registration of a Sale Deed is mandatory in Maharashtra, India. According to the Registration Act, 1908, and the Maharashtra Registration Rules, 1961, all Sale Deeds relating to immovable properties must be registered with the Sub-Registrar's office.
Sale Deed is deemed to be invalid if it is not registered. But on the basis of peaceful possession for the long term, ownership in the property is deemed to be valid. In your case, this is considered to be an evasion of stamp duty. If any time any question would arise, to get the Sale Deed registered, you may have to pay the required stamp duty as per the present value.
In Maharashtra, a minor (a person under the age of 18) can be a buyer (purchaser) in an Sale Deed, but with certain conditions:
- Guardian's consent: The minor's guardian (natural or appointed) must consent to the agreement.
- Court approval: The agreement must be approved by the court, typically the District Court or High Court.
- Registration: The agreement must be registered, as registration is mandatory for minors.
Yes, stamp duty is payable on Sale Deed in Maharashtra, as per the Maharashtra Stamp Act, 1958. The stamp duty is calculated which is more than the Ready Reckoner market value or consideration amount (sale value) mentioned in the agreement.
In India, the buyer is liable to pay stamp duty whenever any immovable property is transferred. The amount of stamp duty payable depends on the state in which the property is situated as well as the value of the property.
Similarly, when an Sale Deed is executed, stamp duty is also payable on it. The amount of stamp duty payable on an Sale Deed depends on various factors such as the property’s value or Consideration Amount, the nature of the transaction. (Sale/Purchase/Exchange/Lease), etc.
The party who executes the Sale Deed is liable to pay stamp duty. In most cases, the buyer pays stamp duty on an Sale Deed . However, there are some instances where the seller may also be liable to pay stamp duty.
Stamp Duty is applicable on various documents, including Property Sale Deed s and Leave and License (rental) agreements, among others. The Stamp Duty in Maharashtra is usually in the range of 4-7% of the consideration value mentioned in the document.
There are four charges in deed. (Defend on property location)
- 1) Stamp Duty -
- Stamp Duty is decided by sale value or market value of property whichever is higher. Stamp Duty is some per percentage of sale value or market value whichever is higher.
- As per Article 25 (b) of the Maharashtra Stamp Act:
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(i)within the limits of any municipal Corporation or any cantonment area annexed to it or any urban area not mentioned in sub clause (ii) 5% (ii) within the limits of any Municipal council or Nagar Panchayat or Cantonment area annexed to it, or any rural area within the limits of the Mumbai Metropolitan Region Development Authority, or the Influence Areas as per the annual statement of rates published under the Bombay Stamp (Determination of True Market Value of Property)Rules,1995. 5% (iii) within the limits of any Gram Panchayat area or any such area not mentioned in sub-clause (ii). 4% - Reduction of 1 % of stamp duty for women under Article 25(b)
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As per Order R & FD No Mudrank-2021/UOR/UOR12/CR.107/M-1 (Policy) dated 31st March 2021, Maharashtra Government reduced the stamp duty from 1st of April 2021 by one percent as otherwise chargeable under clause (b) of Article 25 of Schedule-1, on the document or instrument of conveyance or agreement to sell of any type of residential unit i.e the flat or individual bungalow or row houses or any residential house or any independent house or any type of tenement executed or being execute between “the women/women purchaser/s and any seller or other executant of the said document or instrument. - 2) State Cess -
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- Local Body Tax (LBT) - Local Body Tax (LBT) of 1% is applicable on registration in Maharashtra
- Metro Cess - Metro Cess of 1% is a tax levied by the Maharashtra government on the registration of property. only in Metro City i.e. Mumbai, Pune, Pimpri Chinchwad, Nagpur, Thane It was introduced in 2019 to fund the development of metro rail projects in Maharashtra.
- 3) Registration Fees -
- Registration fees is also a variable of sale value upto certain limit then it is fix for all value above certain limit.
Note: registration value if 1% of sale value or 30,000/- whichever if higher. - 4) Document Handling Charges (DHC) Fees -
- online through collected Sub Registrar office for document handling, for every page of the document, a fee of Rs. 20/- is applicable.
Yes, Provided also that where proper stamp duty is paid on a registered agreement to sell an immovable property, treating it as a deemed conveyance and subsequently a conveyance deed is executed without any modification then such a conveyance shall be treated as other instrument under section 4 and the duty of one hundred rupees shall be charged.
LBT is a tax levied by local authorities (municipal corporations or councils) on the transfer of property.
Local Body Tax (LBT) of 1% is applicable on registration in Maharashtra of documents, including:
- Agreement of Sale/Agreement to Sell
- Conveyance Deed
- Gift Deed
- Exchange Deed
- Partition Deed
Metro Cess is a tax levied by the Maharashtra government on the registration of property transactions, including Agreement of Sale/Agreement to Sell, Conveyance Deed, Gift Deed, and other documents. It was introduced in 2019 to fund the development of metro rail projects in Maharashtra.
Metro Cess is charged at a rate of 1% of the consideration amount (sale value) on the registration of documents.
Yes, an Sale Deed can be cancelled under certain circumstances:
- Mutual Consent: Both buyer and seller agree to cancel the Sale Deed.
- Defect in Title: If the seller doesn't have clear ownership or there's a defect in the title.
- Non-Payment: If the buyer fails to pay the consideration amount.
- Breach of Conditions: If either party breaches the conditions mentioned in the Sale Deed.
- Fraud or Misrepresentation: If the sale is induced by fraud or misrepresentation.
- Fraud or Misrepresentation: If the sale is induced by fraud or misrepresentation.
- Rescission: If the buyer wants to cancel the sale due to a significant change in circumstances.
the registered document can be cancelled only by order of the court it cannot be cancelled unilaterally. If cancelled through court or agreement between parties then it would be valid. See if done unilateral court won't validate same , rest. the document need to be pursued.
Yes, an Sale Deed can be revoked in Maharashtra under certain circumstances:
- Notice: The party seeking revocation must serve a notice to the other party.
- Filing a Suit: If the dispute can't be resolved, a suit can be filed in court.
- Court Order: The court may order revocation of the Sale Deed if grounds are established.
Time limit for revocation: - 3 years: From the date of registration of the Sale Deed (Section 31, Specific Relief Act, 1963)
No Refund Policy.
According to Sec. 54 of the Transfer of Property Act, 1882, 'sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. If a sale deed is executed without payment of price, it is not a sale. It is of no legal effect.
A civil court can cancel a sale deed under Specific Relief Act: HC. A duly signed sale deed may be cancelled by a civil court at the insistence of the seller, as prescribed under Section 31 of the Specific Relief Act, the HC has ruled.
A sale deed is made on a non-judicial stamp paper. It is governed by the Registration Act 1908. These parties are also referred to as the 'Vendor ' and 'Vendee' in legal documents.
Note that the legal heirs have every right to object to the transfer and make the sale invalid, provided the same is filed under the limitation period, i.e. within three years from the date the legal heirs of B becoming aware of the same.
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