What is a Sale Deed? Legal Importance and Registration Process

What is a Sale Deed Legal Importance and Registration Process

A sale deed is one of the significant documents in property transactions

What is a sale deed?

A sale deed is a legal document that describes the sale of a property between the parties  (buyer and seller). It is proof of ownership.  It transfers the rights in the property from the seller (transferor) to the buyer (transferee).

Following rights are transferred to the buyer:

  • Right to sell
  • Right to use
  • Right to lease/mortgage

It is essentially a contract and therefore, all the legal requirements of formation of a contract must be fulfilled.

Also Read: How to cancel Illegal Registration of ancestral property

Legal Importance: Registered Sale deed is a legally binding document.

Proof of ownership:

Once the process of executing the sale deed is completed, the ownership in the property gets transferred to the buyer. The buyer gets absolute right over the property, and he gets the title of ownership.

Details of the parties and the property – help the investor and the parties

Sale deed contains the following elements:

  • Name, father’s name/husband’s name and address of the parties
  • Address of the property, area of the property –full description
  • Payment of sale consideration-mode and time
  • Delivery of Possession
  • Encumbrances on the property –loan, mortgage etc.
  • Compliance of Statutory requirements
  • Statutory payments like utility charges, property tax etc.
  • Clause of Penalty or compensation in case of default
  • Date of execution of deed with registered deed number, serial number, book number, page number etc.

This information is helpful –

  • It avoids ambiguity as the parties are clear about their obligations and rights
  • It guides an investor before finalizing his decision to invest in the property in case of resale.

 Resale –

A sale deed facilitates the resale of the property. It is a primary document conferring the title on the buyer. This title can be transferred by him further based on the deed.

Also Read: What benefits budget 2019 has for NRIs

Process of Registration:

As per the Registration Act 1908, the sale deed needs to be registered compulsorily.

  • The deed is drafted and typed on a non-judicial stamp paper.
  • The buyer has to purchase the stamp paper. Value of the stamp paper depends upon following:
  1. Value of the property –  Sale consideration and Value of the property as per circle rate is compared. Amount of stamp duty is based on higher of the two.
  2. Stamp duty rate applicable is the rate prevalent in the State where the property is located.
  • The sale deed has to be signed by both the parties on every page. The attestation by two witnesses is also required to complete the formation of the deed.

Also Read: What To Do If Your Property Possession Has Been Delayed?

Registration: – The sale deed is registered at the office of the sub-registrar having jurisdiction over the location of the property.

  • The parties seek an appointment with the Sub Registrar’s office. There is provision for online appointment also.
  • The parties need to be present physically at the office of the sub-registrar on the date of appointment. The seller presents the original documents. The Sub Registrar verifies the same.
  • The parties can also mark presence through the power of attorney holder. 
  • The witnesses to the sale deed are also present.
  • The photographs of the seller and the buyer, their thumb prints and signatures are put on the sale deed.
  • All the parties must possess the ID proofs.
  • The buyer pays registration fees
  • Registered sale deed can be collected at the time given.

In few states, property registration is permitted online also. The parties appear before the authority for final signatures and registration of the document.

How to cancel Illegal Registration of ancestral property

How to cancel Illegal Registration of ancestral property

Registering a property means recording the ownership of the property and other transactions related to it in a public record.

Ancestral property is a one in which a person has a share which accrues to him by birth. If a person is entitled to get a share in the ancestral property, he cannot be excluded from it. A father cannot exclude his son from the ancestral property although he can gift his self acquired property to anyone. 

Ancestral property can not be divided or gifted or transferred, excluding the descendants/legal heirs having right to it.

For registering ancestral property, share and title of each family member must be clear.  The property is partitioned and transferred in the name of each descendant as per the share. The partition deed is registered, which confirms the ownership of the share.

Illegal registration can occur in numerous ways. Some of the most often used methods are:

  • Forgery – Signatures are forged, or fake documents are prepared
  • Impersonation- Someone else appears before the Registering Authorities as Owner
  • Misuse of POA – People give power of attorney to family members for effecting transactions on their behalf. POA can be misused. POA has to be very specific and clear.
  • Misrepresentation/Suppression of facts

NRIs are easy targets for illegal registration as:

  • They are not present in India physically for every transaction related to their property
  • Regular inspection of the property is not conducted.
  • Family members are generally given POA who misuse the same

Illegal Registration: The way out

The first step is the cancellation of illegal registration. It is advisable to get legal advice on the issue as cancellation requires careful analysis of the documents and filing an appropriate lawsuit in a civil court.

After cancellation, the next step is mutation.  It is essential to update the municipal records or land records so that the name of the owner is reflected correctly in public records.

Also Read: How to save title of your property from illegal occupants?

A police complaint can be filed for cheating and fraud.

A complaint also lies to the Revenue Authorities or concerned local bodies (Sub Registrar) bringing to their notice the illegal registration and requesting for cancellation of illegal registration.

Corruption in the office of registration is also a significant issue which leads to illegal registration of property. A criminal complaint can be filed with the police against the erring official.

How to cancel a registered document:

Once a document is registered, it is cancelled by filing a suit for cancellation in Civil Court.

The court satisfies itself regarding the illegality in the document.  Cancellation is not ordered at the whims and fancies of the party seeking it. The element of fraud, misrepresentation etc. which renders the document illegal must be present. There must be reasonable chances that if the document is not corrected, it will result in harm to the party.

The suit can be filed within three years from the date of knowledge of the fact of the document being illegal.

The court sends a copy of the decree passed in the lawsuit to the Registering Authorities which record the fact of cancellation of the registered documents in the record and correct the record.

Registering Authority is not empowered to cancel the registered document. The cancellation deed is also registered.