logo logo

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.

image

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

QUESTIONS

Q:- I have constructed a residential complex, which I would like to let out.  My son suggests having leave and license agreement, instead of lease or rental agreement.  Please inform what difference between rental agreement and leave is and license agreement.

Q:- What is the difference between Agreement to sell and Sale deed? Can the Title of a property be transferred only on the basis of a registered Agreement to sell?  Is it necessary to make a registered sale deed to transfer such property though there is an Agreement to sell between two parties and is also registered?

Q:- I had entered into a sale agreement for purchase of a house at Basavanagudi. The agreement is dated 01.07.2000. 1 had paid Rs. 20, 000/- as advance on the date of the agreement and Rs. 80,000/- on 30.09.2000 towards sale price. As per the terms of agreement, seller has to get the sale deed registered in my favour on or after 30.06.2001. He is not willing to execute the sale deed and as per the information is negotiating with others for sale of the property for more money. Seller is my friend who says that limitation period is three years are over and I cannot take any legal action and assures me that he will refund the money after he finds another purchaser. I am ready with money for registration. Please advice what to do?

Q:- Can the intending purchaser of an immovable property, back out of the sale transaction on the ground of non-fulfillment of obligation by the vendor?

Q:- I have purchased a house in Malleswaram jointly with my wife. The sale deed is registered in me and my wife’s name. However, I want to transfer the entire property to my wife. Have I to execute a sale deed in favour of my wife. If so what are the stamp duty and registration charges?