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

- by Sanjay, Murugeshpalya

Though an Agreement to Sell and a Deed of Sale relate to purchase of  property there are differences between these two. Sale of an immovable property is usually preceded by an Agreement to Sell. The subsequent Deed of Sale is based on the Agreement to Sell. Agreement to Sell 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 to Sell. The main ingredients of Agreement to Sell 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 to Sell protects the interest of both parties. The seller cannot alienate the property through an Agreement to Sell.
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 purĀ¬chaser 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:- If there are both agreements to Sell and Sale deed with regard to a common property and sale deed has been executed, then which of the two, i.e. sale deed or agreement to sell should be given weight age?

Q:- I am resident of Bangalore and I have few questions on real estate in Bangalore. I heard there is a GO passed by Karnataka government, banning all the registrations process by CMC. Is this GO applicable only in the city of Bangalore or whole of Karnataka? Has this been lifted or still in place? Do I have to pay VAT and Service Tax if I book apartment from a builder? The apartment builder told me that there will be a construction agreement and a land agreement. Since, the construction agreement more is like a service rendered by builder to the buyer, can I just buy Service tax on the construction cost?

Q:- Is it possible to execute a sale deed on the basis of a Power of Attorney executed in foreign country before the India Embassy and duly adjudicated by the Collector of Stamps in India? 

Q:- I purchased a property and the vendor has executed the Sale Deed in favour of me. Kindly enlighten me whether I have to preserve the agreement entered with the Vendor as a document along with the sale deed?

Q:- I have entered into an agreement to purchase a property at Hongasandra which falls under the area of Bommasandra CMC.  The party is having CMC Katha, tax paid receipts. I have paid 50% of the sale price. Now, the Sub-registrar has refused to register the property. My agreement is going to lapse within one month.  What should I do in this situation?