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What is the difference between an Agreement for sale and a Sale Deed? Is it necessary to enter into a Sale Agreement with a seller ?

- by Suresh, Bangalore

Though an Agreement for sale and a Deed of Sale relate to purchase of property, there are difference between them. Sale of an immovable property is usually preceded by an Agreement for Sale. The subsequent Deed of Sale is based on the Agreement for Sale. Agreement for Sale is a very important document. It records the understanding reached between the parties, which is binding on both. After making preliminary enquiries, the parties with or without their advocates sit and discuss the price and other terms and conditions and thereafter these are incorporated in the Agreement for sale. The main ingredients of  Agreement for Sale are the price consideration, accurate description of the property to be purchased and mode of payment, cost of transfer, specific enforcement and penalty clauses in case of default. An Agreement for Sale protects the interest of both parties. It may be written or oral. The seller cannot alienate the property through an Agreement for sale.

A Deed of Sale is a written document executed between the buyer and the seller. It narrates in brief how the seller got the property, at what price he is selling the property, the sale consideration amount received, his assurances to the Purchaser that the property is unencumbered and in case of any claim the purchaser will be indemnified. Both seller and purchaser shall execute the sale deed. A sale Deed must be registered. After registration and receipt of the balance consideration amount in the presence of witnesses, the property stands transferred to the purchaser.


These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.


Q:- What is the difference between ‘Earnest Money’ and ‘Advance’ in Agreement to Sell?

Q:- What is meant by Defect Liability period in  a construction agreement?

Q:- I have taken some land on lease for 99 years and had con¬structed a multistoried building. The lease deed contains a clause. "Cannot assign, Underlet or sublet or part with the possession of the demised property without the previous permission of the lessor". The lease deed provided for construction of building, I have given portions of the building on leave and license to various busi¬nessmen. The lessor has issued a notice demanding subletting charges from me and has also marked the copies to licensees demanding to pay the subletting charges. What is the remedy? Can the lessor institute legal action against me and other licenses?

Q:- In connection with the purchase of a plot in a township on Mysore Road, I have paid major portion of the sale consideration to the developer. But the developer has not completed even half of the work and the progress work is unduly slow for various personal reasons of the builder. I have lost interest in the plot because of this. Please advise me how to get back my money with interest from the builder?

Q:- My wife and my children have thrown me out of the house because of some difference of opinion. I purchased a site and constructed a house there on out of my own funds and presently, they are enjoying this property. Can I Sell this house in occupation of my wife and children? Will they claim their share in the property?