Difference between Sale Agreement and Sale Deed

May 14, 2023

Posted by PGN Property Management on May 14, 2023 in Uncategorized

The terms “Sale Agreement” and “Sale Deed” are used synonymously but both are distinct, executed at different events.

While an Sale Agreement is a promise of transfer of property ownership on future date, sale deed is an actual transfer of property ownership

What is Sale Agreement?

Sale Agreement is a promissory document that parties are willing to buy or sell the property on future date. The parties sign the agreement upon the satisfaction of terms & conditions listed in agreement. However, it doesn’t involve the transfer of ownership.

Important points to check in Sale Agreement:

Date of agreement execution
Name of the parties, Age, address and PAN Number
Property Schedule including a composite of the property, undivided land share and property sold under the agreement (Schedule A, B & C)
Property dimensions including super built-up area, carpet area and parking area
Transfer of Titles (history of past transactions)
Consideration value, TDS and Transaction terms
Tentative date of sale deed registration
Assurance that property is free from legal encumbrance (such as mortgage lien, court attachment)
Remedy if legal issues besiege the property
Terms about bearing the stamp Duty, Registration fee and other incidental charges
Terms regarding delivery of original documents after the final payment
Term regards the delivery of property possession
Terms regard to cancellation in case seller or buyer retracts from deal
Refund terms in case seller or buyer cancel the deal
Penalty clause

How to execute Sale Agreement?

Follow these four steps to execute Sale Agreement:

Draft the Agreement in Word file
Print the agreement on document or bond paper
Seller, buyer and two witnesses sign the agreement
Franking is the process of stamping the Agreement in sub-registrar office. Frank the agreement 0.1% of consideration value

Agreement Format:

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What is a Sale Deed?

Sale Dee is a legal document that confirms the sale and transfer of ownership from seller to buyer. Mandatory to register sale deed in registrar’s office.

Important points to check in Sale Deed:

Date of Sale Deed Execution
Name of the parties, Age, address and PAN Number
Property Schedule including a composite of the property, undivided land share and property sold under the deed (Schedule A, B & C)
Property dimensions including super built-up area, carpet area and parking area
Transfer of Titles (history of past transactions)
Consideration value, TDS and Transaction details including transaction date, value and number
Assurance that property is free from legal encumbrance (such as mortgage lien, court attachment)
Remedy if legal issues besiege the property
Transfer of rights, interests and claim of the property to the new buyers
Terms regarding delivery of original documents to buyer
Term regards the delivery of property possession

Generally, the Sale Deed is drafted out of terms & conditions covered in Sale Agreement

How to Register Sale Deed?

Follow these six steps to register the sale deed

Draft the Sale Deed in word file
Print the sale deed draft on document or bond paper
Pay the Stamp Duty & Registration fee
In the Registration office:

Seller carries all the original property documents, including pan and aadhaar

Buyer carries the Stamp duty challan, PAN, aadhaar and Printed sale deed (to be registered)

Buyer, seller and two witnesses sign the sale deed, provide bio-metric thumb-impression and webcam photo in sub-registrar office
Buyer collects the encumbrance certificate from registering officer to cross-check the transfer of ownership

Sale Deed Format: