INTRODUCTION TO CONVEYANCING
Conveyancing has long been practiced in England by a specialized group of lawyers known as conveyancers. These professionals undergo extensive training in contract and real property law in order to handle the transfer of property rights. While initially a term used primarily by English lawyers, conveyancing has gained importance in India as well. In modern India, the role of a draftsman is crucial in the process of drafting legal documents and deeds. A draftsman must have a high level of qualification in law and should be well-versed in the legal principles relevant to the specific document being prepared.
The term “conveyancing” refers to the transfer of property rights between two living individuals. It involves the art of drafting deeds and legal documents that facilitate this transfer. Conveyancing is not a simple task; it requires a deep understanding of legal knowledge and the principles that have evolved over time. While conveyancing specifically focuses on documents related to the transfer of property, drafting has a broader meaning that encompasses the preparation of any legal documents, deeds, or business-oriented documents.
The word ‘SALE’ defined under Section 54 of “The Transfer of Property Act, 1882” In simple terms, the word ‘sale’ refers to the transfer of ownership of tangible immovable property in exchange for a price. This transfer is done through a contract for sale, where both the buyer and seller agree to certain terms and conditions. The transfer can be made through a registered document, and the property is handed over to the buyer through actual possession or by someone authorized by the seller.
Before discussing the term ‘sale deed’, it’s important to understand the concept of an ‘agreement to sell’. This document is a written agreement between the buyer and seller, laying out the terms and conditions for the sale of the property. It serves to protect the interests of both parties and has legal value. The agreement to sell is essential before the actual sale takes place, and it typically involves the buyer paying a token amount to the seller as an advance.
The ‘sale deed’, also known as the ‘conveyance deed’, is a legal document executed by the seller and buyer, which acts as proof of the sale and transfer of ownership of the property. This document is governed by the Registration Act, 1908 and is crucial for both the buyer and seller. It provides details on how the seller acquired the property, the consideration for the sale, and ensures that the property is free from any encumbrances or liabilities. The sale deed is an important document for the buyer, as it establishes their ownership of the property and allows them to further sell it if needed.
Requirements of Sale Deed:
A sale deed is a crucial legal document in a property transaction, outlining the terms and conditions of the sale. It must be drafted by a legal professional on a non-judicial stamp paper and include specific clauses to ensure its validity and enforceability. The requirements of a sale deed are as follows:
1. Name of the deed:
The parties involved must decide on the specific type of deed that will be prepared, such as a “Deed of Sale”, “Deed of Mortgage”, or “Deed of Lease”, which will determine the transfer of ownership of the property.
2. Parties to the sale deed:
The deed must include the names, ages, and addresses of all parties involved in the transaction. Both the seller and buyer must be legally competent to enter into a contract to ensure the validity of the sale.
3. Description of the property:
The sale deed must provide a detailed description of the property being sold, including identification numbers, total plot area, construction details, and its location with the surrounding areas. A schedule of the property should also be included to specify its exact location.
4. Agreement for sale:
A valid sale deed requires an agreement for sale, in which both parties mutually settle the terms and conditions of the transaction. The sale deed always follows the agreement to sell.
5. Sale consideration clause:
The deed must state the agreed-upon sale consideration or amount that the buyer will pay to the seller upon execution of the sale deed. This amount should match the terms stated in the agreement to sell.
6. Advance payment:
If the buyer has made a token amount payment to the seller, this transaction must be clearly mentioned in the sale deed. The remaining balance to be paid upon execution of the sale deed should also be specified.
7. Mode of payment:
The buyer should determine the preferred mode of payment, such as cash, cheque, or demand draft, and this choice must be agreed upon by the seller.
8. Delivery of possession:
The sale deed should include a clause stating when the actual delivery of possession of the property will occur, typically after the registration process is completed.
9. Indemnity provision:
The seller must clear all statutory charges related to the property, including taxes, utility bills, and any other fees. If there are any encumbrances on the property, the seller must repay any outstanding loans and clear the property of any encumbrances. The buyer should verify the encumbrance status before the sale deed’s execution.
10. Execution:
The sale deed must be executed by both parties, with thumb impressions or full signatures. Each page of the deed should be signed, and any alterations or additions must be authenticated by the full signatures of the parties. Two witnesses should also sign the deed, providing their full particulars and addresses.
11. Registration:
Registration of the property is mandatory for tangible immovable properties valued above a certain threshold (usually Rs. 100). The sale becomes valid only after registration. Both parties must appear before the sub-registrar office within four months of execution, present the original documents, and pay the required stamp duty for registration. A certified copy of the registration document should be obtained for future reference.
12. Testatum:
After finalizing all the terms and conditions, the sale deed is prepared. It should be witnessed by at least two individuals, one representing the seller and the other the buyer. The witnesses must provide their full names, addresses, and signatures.
13. Original documents:
Once the property is registered, the seller must hand over all original property documents to the buyer. The purchaser will obtain ownership, possession, title, and interests in the property.
14. Default clause:
The agreement for sale should include a clause stating that in case of default by either the seller or the buyer, the party rescinding the contract must pay damages to the other party. This clause ensures that the breach of contract does not affect the execution of the sale deed.
It is crucial to draft a sale deed with caution and knowledge of property and related laws. Engaging the services of experienced advocates or legal professionals specializing in property transactions can help avoid potential litigation resulting from poorly drafted sale deeds.