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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.

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

QUESTIONS

Q:- I am a regular reader of Real Estate Reporter particularly the columns, frequently asked questions and questions & answers on property matters. Recently I was transferred to Mandya and negotiated a house for rent. The owner insisted on an agreement of 11 months only whereas I wanted for three years. Please let me know, what is the secret behind this eleven months agreement?

Q:- I had taken land on lease for 99 years and had constructed 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 lesser”. The lease deed provides for construction of building, I have given portions of the building on leave and license to various businessmen. The lesser 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 Lesser institute legal action against me and other licensees?

Q:- In our Apartments (12 flats) the builder, represented by sellers GPA, has sold the open land in front/rear of ground floor flats to them and a car parking at the main entrance gate to 3rd floor owner.  Schedule of A property measures 7190.5 Sft.  Schedule B property spells out an undivided share, right, title and interest in that piece and parcel of property described in Schedule A mentioned, equivalent to 538.80 Sft. for C type flats;  570.40 Sft. to B type flats;  measuring 688.30 Sft. to A type flats. C schedule spells out individual flats super built up area together with proportionate share in common areas with car parking. That is the sale deed puts the owners in physical possession of 538.80 Sft (C type) 570.40 Sq.ft (B type) and 682.30 Sft (A type) undivided interest in the said schedule property. Also the builder/sellers have retained the right to use the Terrace to put up further floors and the facilities provided including lift are just sufficient for 12 flats.  Is it lawfully right to sell the common land, car parking at the main entrance to the 3rd floor owner.  Is it lawfully right to retain the terrace rights and put up further floors?

Q:- My mother deceased recently. Father has expired long ago. My mother has left behind property worth Rs.60.00 lakhs.  It is herself acquired property. She has not made any will. We are four brothers and two sisters in all.  One of the brother and sister died subsequent to the death of the mother.  The deceased brother and sister have one son each. Since all are settled independently, we want to sell the property.  Please guide us who should join the execution of the sale deed?

Q:- I am a Law student. My sister would be purchasing a house in Malleshwaram and has requested me to prepare a sale deed.  Can I do it?