Introduction
Do you know the legal differences between a sale agreement and a sale deed in the real estate industry? Although often used to be exchanged, these terms have important implications for buyers, sellers, and owners. This is to ensure you are fully informed and protected during your transaction. It is essential to understand these differences—they must stay updated with the latest laws regarding these documents. Keep reading to gain a deeper understanding of these critical terms.
Table of Contents
- Understanding the Agreement of Sale and Sale Deed?
- Things to Check Before Signing the Contract of Sale
- What is the Sale Deed?
- Can the Sale Agreement and Sale Deed Be Canceled?
- Differences Between the Agreement of Sale and Sale Deed
Agreement of Sale and Sale Deed: It’s crucial to ensure that a legal contract protects everyone involved when buying or selling property. The type of contract and its terms may vary depending on the agreement between the parties.
There are usually two types of contracts used in property transactions. A sale agreement promises a future property transfer, while a sale deed involves an immediate transfer of property rights. The drafted contract type will depend on the nature of the deal between the buyer and the seller.
Understanding the Agreement of Sale and Sale Deed?
A contract of sale is an executed contract. A sale is an act in an executory contract. In a contract of sale, sellers and buyers agree to transfer the property at a specified future date rather than immediately. Until this transfer takes place, the indemnity accrues to the seller.
The sale and agreement to sell are also very different—accordingly, the contract to sell precedes the sale deed. If the buyer cannot meet the given conditions, the seller can resell the property as the ownership has not yet been transferred. This may vary depending on the specific terms of the contract.
Things to Check Before Signing the Contract of Sale
Please thoroughly inspect the property when you buy it. Sign the contract of sale only after ensuring all the legal aspects are correct. Check the following fields before signing the sales contract:
- Name of the parties
- The period required to transfer the property from the seller to the buyer
- Payment schedule
- Penalty clause
- Encumbrance Certificate
- Property details
- Possession details
- Aspects of the property like carpet area and open area
- Property map
- Property address
- Dispute resolution methods
What is the Sale Deed?
A sale deed is drawn up on the actual transfer of the property. A sale deed establishes the sale and transfer of property ownership from the seller to the buyer. This is an essential legal document that both parties should carefully review and sign. A sale deed usually contains details such as the purchase price, property description, and any other relevant terms and conditions of the sale.
Ensuring that all the details in the sale deed are accurate and agreed upon before signing is essential to avoid future disputes. It is recommended that you seek legal advice or assistance when drafting or reviewing a sale deed to ensure that all legal requirements are met.
This document serves as proof of the transfer of ownership. Keep it in a safe place for future reference. The Registration Act of 1908 requires the registration of deeds in the office of the Registrar. It is a good idea to have a real estate attorney review the sale deed to ensure all legal aspects are in order.
Also read: Gift Deed: An Overview for Property Investors.
Can the Sale Agreement and Sale Deed Be Canceled?
Even if two documents are created after finalizing the transaction, there are still cases where their cancellation is required. For example, cancellation may be necessary if there is a material error in the documents or new information comes to light that renders the transaction invalid. In these circumstances, a legally valid termination must be ensured.
It is essential to follow the correct procedures mentioned in these documents. All parties involved should be informed. To navigate any complications that may arise, obtain signatures from authorized persons and obtain legal advice. Act promptly and diligently to avoid any potential disputes or legal consequences.
Although canceling a sale deed is easy, legal assistance is required. An attorney can help ensure the necessary documentation meets legal requirements and guide any potential consequences or liabilities arising from the cancellation of the sale deed. It is essential to seek legal advice before terminating to avoid future problems or disputes. An attorney can also help navigate any complexities in the dissolution process.
Differences Between the Agreement of Sale and Sale Deed
The agreement of sale outlines the terms and conditions of the sale. The sale deed, which includes the price and payment schedule, is a legal document that transfers property ownership from the seller to the buyer. The agreement of sale is usually signed before the sale deed. While both are important in a property transaction, the sale deed is crucial for establishing legal ownership.
| Points of difference | Agreement of sale | Sale deed |
|---|---|---|
| Transfer | It implies the future transfer of the property | It signifies an immediate transfer of the property titles |
| Contract | It is an executory contract, i.e. the terms of which have not been fully implemented presently. | It is an executed contract |
| Violation | Breach of the sale agreement may result in a suit for damages and termination of the contract. | A legal complaint for breach of the sale deed must be accompanied by damages. |
| Purpose | Indicates that the property will be transferred to the buyer in the future. | Denotes that the property title will be transferred effective immediately. |
| Registration | The norms concerning registration of agreement of sale differ across all states | It is mandatory to register a sale deed |
Conclusion
Understanding the differences between an agreement of sale and a sale deed is essential. Because sometimes you have a chance to face such situations. So, think carefully and sign the contract documents. Otherwise, they will get into trouble. Search openplot for the latest information like this.
Also read: Gift Deed in India: Things to Consider While Transferring