Sale Deed: All You Need to Know

July 6th, 2023

Sale Deed Meaning, Purpose, Legal Implications

A sale deed is one of the most important documents to be obtained during the transaction of a property. In fact, to be considered the legitimate owner of a property by the law, the possession of a sale deed is mandatory. The following article elaborately discusses everything you need to know about this crucial document.   

When buying or selling a property, certain legal formalities are mandatory to make the transaction valid. Hence, each transaction of property comprises an array of legal documents. One of the crucial ones among these is the sale deed. Let’s explore in detail about the document– what it is, its significance and more.

What is a sale deed?

A sale deed, as the name suggests, is an essential document required for property transactions. It lets the seller to transfer the rights of property to the buyer, thus making them the legal owner. Once the sale deed is duly checked and signed by both the seller and the buyer, it is important to get it registered. Remember, if the sale deed is not registered, the law won’t recognise the buyer as the rightful owner.

Sale Deed – An In-depth Analysis

We have seen what a sale deed is and how important it is to get it registered. Now, let’s get into the other important aspects of it. What does a sale deed comprise?

Parties of the sale deed

First and foremost, a sale deed should bear the name, address and signature of the seller and the buyer.

Description of the Property

A detailed description of the property with information pertaining to configuration (i.e., 2 BHK/3BHK etc.), total plot area, identification number, details of construction and exact location.

Sales Agreement

The sales agreement, which is prepared before the sale deed, clearly states the terms and conditions which shall be mutually agreed upon by the seller and the buyer.

Clause of Sale Consideration

The sale consideration clause will mention the stipulated amount.

Payment and Mode of Payment

If the buyer has paid an advance, it should be mentioned along with the remaining amount to be paid as well as the mode of payment, i.e., cheque, DD, etc.

Passing of the Title

It shall mention the time when the title of the property is passed on to the buyer.

Possession Delivery

Information regarding the actual date of possession of the property, which the seller will transfer to the buyer, after the registration of the property.

Indemnity Provision

Mostly applicable to the resale of a property, this clause states that all dues such as utility bills, property tax, maintenance charges, etc., should be cleared by the seller prior to the execution of the sale deed.

Default Clause

In case there is default in payment from any of the parties involved, the defaulter should pay a penalty.

Finally, once the sale deed is complete, it should be endorsed by two witnesses. The document should have their respective names in full, signatures and addresses. Also, each page of it should bear the name and signature of the buyer and seller.

How Does a Sale Deed Differ from an Agreement to Sell?

When you are involved in buying or selling a property, a better understanding of the terms and procedures will be of great help. Since there is a wide range of them, it would be easy to get confused. Let’s understand the difference between two of the most crucial documents in property transactions – the sale agreement and the sale deed.

                    Sale Agreement                                                      Sale Deed

Expresses the willingness to sell a property sometime in the future. Indicates the immediate and complete sale of the property.
The seller is responsible for any potential risk till the sale of the property. The responsibility for any potential risk solely lies with the owner.
It is a contract, which would be executed in the future. It is a contract that has already been executed.
A sale agreement may or may not be registered depending on the rules of the state where it is applicable. Registering a sale deed is mandatory, and the stamp duty for the same must be borne by the buyer.
It offers a mere right to purchase a particular property. It guarantees the owner the rights and claims over the property.
A sale agreement will just have the terms and conditions for the sale of the property. A sale deed will comprise all the information about the buyer and seller, the property, payment and more.

Parties Involved in a Sale Deed and Their Roles and Responsibilities

As we have already mentioned, a sale deed will have the details of both the buyer and seller with their roles and responsibilities clearly defined. Let us take a look at them.

Roles and Responsibilities of the Buyer and Seller


  • A buyer, with the help of a legal expert, should check all the documents before proceeding with the registration of the sale deed; once it is executed, any risk associated with it will be the owner’s responsibility.
  • Charges for stamp duty for registration of the document must be borne by the buyer.
  • Make sure that it is ratified by the witnesses as prescribed by the law of the particular state where the transaction takes place.
  • Pay the amount agreed upon at the time of the completion of the sale.


  • Disclose any material defect in the property or in the seller’s title.
  • Produce all documents regarding the title of the property upon request.
  • Answer all the questions to the best of knowledge with regard to the property or the title.
  • The seller must ensure that the property is handed over on time.

Importance of Accurate Identification and Details of Parties

As mentioned above, a sale deed is a document used for the sale and transfer of ownership of a property. In property transaction, a sale deed is one of the most important documents. Hence, it is crucial to ensure that the details such as the identification of the property, its type, location and indeed the parties involved are accurate.

Considerations for Joint Ownership or Multiple Buyers

When the property is purchased in partnership with other(s), it must be clearly specified in the sale deed. Also, each individual’s share must be specified. Suppose if the share is 60:40 and the same is not specified, it is considered that each owner has a 50% share in the property.

Execution and Registration of Sale Deed

As per the Indian Registration Act 1908, for the transaction of an immovable property valued more than Rs. 100, registration is mandatory. Individuals involved – the buyer and the seller – sign the sale deed in the presence of witnesses and the same is registered by the sub-registrar at the local sub-registrar office. Before registering, the sub-registrar verifies the documents for any encumbrances or legal issues. If everything is found satisfactory, the buyer can take possession of the property.

Stamp Duty and Registration Requirements

Depending on the state, the amount of stamp duty levied on properties varies. Usually, it comes in the range of 4% to 6% of the property’s sale value.

Role of Sub-registrar and Documents Needed for Registration

It is the sub-registrar, who, after thoroughly scrutinising the submitted documents and sale deed, registers the sale deed. The following documents are required for registration:

  • Sale agreement
  • Payment receipts
  • Property tax receipt
  • Encumbrance certificate
  • Copy of the building/layout plan
  • No Objection Certificate (NOC)
  • Completion certificate
  • Occupancy certificate
  • Possession letter
  • Allotment letter
  • General Power of Attorney

Read More – Possession Certificate – Everything You Should Know!

Consequences of Non-Registration or Improper Execution

As one of the most important documents required for property transaction, a sale deed identifies an individual or individuals as the legitimate owner of a property. Therefore, not registering it or improper execution of it will have long-term consequences that will cause problems particularly while selling the property.

Importance of Due Diligence

While purchasing a property, due diligence will save you precious resources and time. So, a buyer should check all the documents related to the property including the title, encumbrances, or any other liabilities. He/she must ensure that all approvals, clearances, and NOCs are obtained from the concerned authorities.

From a layman’s point of view, scrutinising these documents and finding discrepancies, if any, would be a monumental task. Chances are high to overlook certain irregularities that would cost you dearly. Hence, it is highly advisable to find help from an experienced legal professional who is well-versed in matters related to property. This way, you can ensure that no unpleasant surprises come your way in future.

Read More- What is Due Diligence in Property Buying?

Rights and Protections Afforded to the Buyer

Once the payment is done, the buyer holds the right to make improvements as they wish in order to increase the value of the property and rent it out.

If the buyer refuses to accept the property, they are entitled to get the money paid for the purchase or any other charges as per the contract.

Remedies Available to Parties in Case of Breach or Non-Compliance

In case of breach or non-compliance, the first thing to do, whether you are a seller or a buyer, is to go back to the original agreement and check the clauses. Either of the parties will have the right to seek monetary damages.

Transfer of Property and Legal Consequences

Legal Implications of Transferring Property Through a Sale Deed

One of the most common ways in which a property is transferred is through the sale deed, which should be registered at the sub-registrar’s office to make the transaction valid. It is a fool-proof method and prevents fraudulent activities.

Change in Ownership and Rights of the Buyer

Once the sale deed is registered, it is legally confirmed that the ownership of the property has been transferred to the buyer. In this capacity, they have the right of possession, right of way, rights to use, transfer, or earn rent from the property.

Tax Implications and Duties Associated with Property Transfer

Transaction through the sale deed attracts capital gain tax and requires payment of stamp duty and registration charges.

Read More- TDS on Property Purchases: Key Considerations for Buyers

Importance of Professional Assistance 

Role of Lawyers and Legal Experts in Drafting and Reviewing Sale Deeds

A sale deed is a legal agreement that establishes an individual’s right of ownership of a property. Naturally, it needs to be prepared without errors. For this purpose, it is important to seek the help of a legal practitioner to draft and review the document and verify that all the necessary clauses are included in it. Doing this will ensure that you don’t face any unforeseen complications in the future.

Sale Deed in a Nutshell

By now, you are well aware of the sale deed – one of the most important documents in property transaction – what does it comprise, its importance, how to prepare it and more. Remember, to be the rightful owner of a property, you need to have a sale deed, ideally prepared and verified by a legal practitioner.  A well-drafted sale deed ensures that you don’t get yourself into any legal entanglements in the future.

Also Read-

Documents Required for Buying a Property

What is Title Deed of Property? All You Need to Know!


1. What do you mean by a sale deed?

A sale deed is one of the most important documents in property transaction. It comprises a range of clauses and details of the parties involved. To make the sale deed valid, it should be verified and registered by a sub-registrar.

2. What is the significance of a sale deed?

A sale deed is a crucial document that establishes the right of ownership. Hence, it is important to have the sale deed registered to make property transaction legally valid. A sale deed comprises all the necessary clauses relevant to the property and transaction.

3. What is the difference between a sale deed and a sale agreement?

A sale deed and a sale agreement are totally different documents, though people often get confused between the two. While a sale agreement indicates that a property will be sold in the future, a sale deed suggests that the transaction will be immediate. In addition to this, there are various differences such as the following: a sale agreement is a mere right to purchase a particular property whereas a sale deed asserts the owner’s rights over the property.

4. What are the contents of the sale deed?

A sale deed comprises all the vital information in relation to the property as well as the transaction. Thus, it will have the names and signatures of the buyer and seller. In addition to this, it will have the names of the witnesses and signatures, a detailed description of the property and all the relevant clauses.

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