Tag: Sale Agreement

A Sale Agreement is a Preliminary agreement between Seller and Buyer. It outlines the terms and conditions of Sale and safeguards the interest of both parties. It contains all the essential elements such as:

• Date and place of agreement execution
• Seller & Buyer name, age, address, and identification proof
• History of the transaction (previous owner details)
• Buying price, payment terms, and TDS
• Property Schedule includes flat number, measurement of flat. apartment name, village name, Taluk, Hobli, and District
• Timeline to complete the Sale Deed Registration
• Cancellation clause
• Dispute and Jurisdiction clause
• Two witnesses’ details

OBJECTIVE: We are going to cover the following topics which will give a wholistic understanding of Sale Agreement for a resale flat in Bangalore

• Documents Required for Sale Agreement
• Basic validation of documents for Sale Agreement
• Sale Agreement Execution
• Stamp Duty for Sale Agreement
• Cost of Executing a Sale Agreement
• Denotation of Stamp Duty

DOCUMENTS:

The seller should provide the following documents for Sale Agreement execution

• Parent Deed
• Sale Deed
• eKhata
• Property tax receipt
• Aadhaar

VALIDATION:

Buyers must do the basic validation of documents and we can do the below validation at the comfort of your home.

• Extract the Encumbrance Certificate (EC) on Kaveri Online Services:  Extract the EC since the 1st Parent Deed registration. EC provides a list of all transactions related to property
• Extract Deed certified copies on Kaveri Online Service:  Extract the certified copy since the 1st parent deed registration. The sequence of ownership from the 1st parent deed to the current deed should be in chronological order, continuous and unbroken
• Extract ekhata on eAasthi website to check the current ownership of the property and validate the ekhata on Kaveri Online service using ePID
• Extract the current financial year property tax receipt from the respective municipality’s website

It costs less than Rupees one thousand to extract EC, CC, and ekhata and it takes around 5 working days to get signed copies. These validations might save you from fraud deals

You must hire a lawyer for critical validation, such as disputes and auction properties. Lawyers can meticulously verify the documents, and advise the potential pros and cons which would help us with proactive decision-making

EXECUTION:

We can make a Sale Agreement in three different ways, they are:

• Sale Agreement by Registration
• Sale Agreement by Adjudication
• Sale Agreement by Non-Judicial e-stamp

In this answer, we will cover only the Sale agreement by non-judicial e-stamp paper. Refer to the below execution procedure

• Draft the Sale Agreement
• Share the draft with other party for draft confirmation (usually buyer makes the sale agreement hence the buyer must get draft confirmation from the seller)
• Buy a non-judicial e-stamp paper in a co-operative bank or near the sub-registrar office or court premises. You need the following information to buy an e-stamp paper
  • Description: Sale Agreement for Immovable property (when you purchase e-stamp paper for Sale Agreement, you must insist to the stamp vendor that you need a Sale Agreement for immovable property. Most often don’t specify immovable property and they end up generating the wrong e-stamp paper for movable property which could be the costliest mistake)
  • 1st Party: Seller Name
  • 2nd Party: Buyer name
  • Purchased by: The person who purchases the e-stamp paper
  • Consideration Price: Buying Price
• Print the 1st page of Sale Agreement Draft on non-judicial e-stamp paper and use plan A4 size with at least 100GSM paper to print consecutive pages of Sale Agreement
• Seller, buyer, and Two witnesses sign the Sale Agreement

A Sale Agreement looks like the below image and we highlighted the Description for your understanding

STAMP DUTY:

The Stamp Duty for sale Agreement is 0.5% of the buying price

For Example: The buying price is Rs. 64 lakh

Stamp Duty for Sale Agreement is Rs. 64,00,000*0.5% = 32,000

COST:

Below is the cost incurred for me to execute the above Sale Agreement

• Stamp Duty: Rs. 32,000
• e-Stamp paper processing fee at co-operative bank is 5% of stamp duty that Rs. 32000 * 5% = 1600
• Paper and printing: Rs. 100 (approx.)
• Total cost Rs. 33,700/-

LEAD-TIME:

Time taken to execute the above Sale Agreement for me:

• Drafting and draft confirmation with seller: 1 day (productive time is around an hour)
• e-stamp paper purchase and Sale Agreement printing: 1 day (productive time 30 minutes)
• Seller, buyer, and two witnesses sign: 1 day (Productive time is 30 minutes)

The total time taken to execute the above Sale Agreement is 3 days (productive time is ~ 2 hours)

DENOTATION:

The Stamp Duty paid for Sale Agreement is offset in the stamp Duty payable for Sale Deed

For Example:

• The Stamp Duty for Sale Agreement is Rs.32,000
• The Stamp Duty for Sale Deed is Rs. 3,20,000
• The actual stamp duty payable for Sale Deed registration is Rs. 3,20,000–32,000 = 2,88,000/-

At the time of Sale Deed registration, Select the Denotation of Stamp Duty in your application to offset the Stamp Duty

We assist Sale Agreement for resale flat, please write to us pgnproperties@gmail.com or Whatsapp +91-97424-79020

Thank you for reading…

Below are a few important clauses to check in a sale agreement

• Title:

Generally, property sale agreements are executed under the following titles

1. Agreement of sale
2. Agreement for sale
3. Agreement to Sell
4. Sale cum construction Agreement:

Choose the right title for your agreement

• Date & place:

The 1st line of the agreement must have date and place of the agreement execution.

• Parties (Seller & Buyer)

Seller’s name, age, address, and Aadhaar/PAN number

Buyer’s name, age, address, and Aadhaar/PAN number

• Property schedule

The property schedule is the description of the property. Generally, a property schedule has three sub-schedule. They are Schedule A, Schedule B, and Schedule C

Schedule A: Land conversion details (from agricultural to residential). Land survey number and measurement of the land where this apartment is built

Schedule B: Area of undivided land share

Schedule C: Super buildup, build up, and carpet area of your flat

• Mother deed:

Details of how seller acquired the property. Details include mother deed registration number, date, Khata and property tax ID.

• Payments: (advances, tax, and remaining settlement)

1. Total consideration price
2. Token advance
3. Payment at the time of sale agreement sign
4. TDS
5. The remaining balance of sale consideration

Payment terms in figures and words, Mode of payment

Beneficiary name, bank account number, bank name, transaction numbers, and transaction date.

• Deed Registration date:

Tentative date of sale deed registration. The seller or his GPA holder should agree to execute the Sale Deed in favor of the buyer.

• NOCs and their charges:

Seller obtains “No Objection Certificate” (NoC) from Bank, society office. Seller pays NOC-related charges to Apartment Association and obtains NOC before the registration of deed of sale

• Free from encumbrance

Seller conveys the Schedule Property free from all encumbrances, attachments, court proceedings

• Charges & Bills:

Seller pays any maintenance charges, water charges, electricity bills, and any other bills raised against the scheduled property by the Resident’s Welfares Association until the date of registration of sale deed.

• Stamp duty & Registration charges:

The buyer or his nominees shall bear the stamp duty and registration charges and other incidental charges in respect of the sale deed for the Schedule Property.

• GPA or agreement with other parties:

The seller should confirm that they have not entered into any agreement or GPA with any other person or persons prior to your sale agreement

• Delayed possession:

In case of delay in delivery of possession, seller shall pay 18% interest on net amount paid by buyer, for the duration for delay

• Produce original documents:

Seller should produce up-to-date property tax and any other relevant documents for the purpose of registration of sale deed as demanded by the Sub Registrar and also produce all the original documents at the time of Registration.

• Termination:

if any side decides to retract from property transaction and does not make payments or execute the documents, they will be liable for a penalty of an amount of Rs. 2,00,000/- (approx figure)

Specifically, if the seller back out from the transaction, the seller shall return all payments received as advance (including TDS paid by buyer, if any) and also pay Rs. 2,00,000/- as penalty.

If buyer backs out or does not complete the entire transaction in the timelines envisaged, provided the seller provides all necessary documents, The buyer will forfeit Rs. 2,00,000/- as penalty.

In mutual termination, either side’s payments (without interest) should be completed within 15 days.

• Delivery of possession and original documents:

Seller should deliver the vacant possession and all the original title deeds of the Schedule Property to the PURCHASER after payment of balance sale consideration amount and at the time of registration and execution of the Sale Deed. The documents include mother deed, tax paid receipt, occupation certificate and khata.

• Cooperation of mutual parties:

The parties herein should mutually co-operate in smooth implementation of the terms and conditions of this Agreement of Sale.

• Dispute Jurisdiction:

Jurisdiction of court in case of dispute.

In Bangalore, we provide end-to-end assistance for sale agreement execution. To opt for our service, please write to us pgnproperties@gmail.com or whatsapp to +91-97424 79020.

Thank you for reading….