Difference Between Sale Deed And Sale Certificate

In the field of real estate terms ‘sale deed’ and ‘agreement of sale’ are generally used synonymously. However, both these terms are distinctly used for different events. A sale agreement validates the seller and buyer entering into a deal, on the other hand a sale deed could be used as an evidence of the transfer of ownership.

While buying or selling an immovable property, it is necessary to safeguard the activity through a legal contract. However, the type of contract executed and its terms could differ based on the agreement between the parties. Generally, two types of contracts are used during the sale or purchase of a property - a sale agreement- the property transfer is promised to be on a future date and a sale deed-providing for an immediate transfer of the property rights. Therefore, depending upon the deal held between buyer and the seller, the contract shall be drafted.

What is an Agreement of Sale ?

An agreement of sale proves the willingness of the parties to buy or sell a property in the future based on certain terms and conditions. However, an immediate transfer of ownership would not be involved with it and therefore the buyer would have no right or interest in the property in question.

Elements included in an Agreement of Sale-

The agreement of sale will be executed between two or more parties. The important characteristics of a sale agreement are -

• A proposal should be there to purchase and an agreement to sell such property in the future

• A detailed description of the property shall also be included

• An assurance must also be provided that the property is free from any legal encumbrance

• A document explaining the value of the property, including the details of the payment

• Terms related to the delivery of original documents after the final payment has been made

• It is helpful with the execution of the sale deed and registration of the property after the titles are found competent.

• A method related to the delivery of property.

• An agreement to sell will be important for refund of the payment in case there was an improper title to the property, in such a situation the agreement would be helpful as a proof in case of non-completion of sale on the seller’s part.

• Shall be helpful in recovering the advance payment in case the purchaser failed to complete the transaction

In a few States, including Uttar Pradesh, a sale agreement shall not be considered as legally binding on the parties signing it, until the agreement is registered with the relevant sub-registrar of assurances. The process of registering a sales agreement is similar to that of the sale deed. Therefore, it is advised to check the regulations of the local area regarding the same so as to ensure the legality of the agreement.

What is a Sale Deed?

A sale deed is signed for the actual sale or the transfer of a property. A sale deed shall confirm the sale and transfer of property ownership from a seller to buyer. However, a deed would be drawn only after the terms of the sale agreement have been completely settled. Also, as per the Registration Act, 1908, it is mandatory to have the deed registered at the registrar’s office.

Important elements of a Sale Deed

A Sale Deed shall include the information related to the property transaction as mentioned below-

• Details of the parties involved in the transaction

• Description of the property related to the transfer

• Transfer of titles from the seller to buyer

• Consideration involved in the transfer of titles

• Transfer of rights, interests and claim of the property transferred in the name of the new buyer

• Clause explaining the shift of authority on privileges, facilities, and easements of the property from seller to the buyer

• Compensation paid to the buyer for facing losses arising out of the negligence on the part of the seller or any heirs of the asset

• The authority of the seller to sell the property

Generally, a sale deed shall be brief as most of the contractual terms have already been mentioned in the agreement of sale.

Could a sale agreement and sale deed be cancelled ?

Though both documents will be drafted only after the transaction has been finalised, still there can be circumstances where the cancellation of these documents will be required. Cancellation of a sale agreement is quite simple and straightforward, on the other hand the cancellation of a sale deed would require a legal procedure to be followed.

A sale agreement would be cancelled in case either party to the agreement refuses to comply with the terms and conditions mentioned. Here, the sale transaction shall stop and the party at default would pay the necessary compensation to the aggrieved party. Such disagreement can also be taken up in the court of law if the parties do not come to a settlement.

In order to cancel a sale deed, the concerned party should have strong grounds for any apprehension regarding the deal and it is also important that the sale deed must be registered under the Registration Act, 1908. The sale deed, this could be cancelled according to Sections 31 to 33 under the Specific Relief Act, 1963.

Conclusion

As could be inferred from the above discussion, a sale deed is required to be registered, while on the other hand, a sales agreement is signed between the parties. In order to ensure that a foolproof contract has been signed amongst the parties, it is important that you seek proper legal assistance from an experienced advocate. As a professional would help you with drafting the appropriate documents as well as registering it, he would also make sure that the document is favourable for you

Hence, if you wish to draft sale deed in marathi or a sales contract in any other language, it is advised that you contact us at Lead India, as we offer you a team of experienced advocates who have been successfully assisting the clients with drafting and reviewing contracts, registering required documents as well as helping their clients in negotiations or even in the court cases as patent litigators as well.

Therefore, if you wish to talk to a lawyer or seek free legal advice, you may contact us.

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