Legal Guide

Sale deed under Transfer of Property Act, 1882 

by Bhavya Choudhary · 4 min read

Sale deed under the Transfer of Property Act

Introduction

In the Transfer of Property Act 1882, section 54 defined “what is a Sale?”, “how its made?” and what is a contract for Sale?

The sale means the transfer of ownership from the seller to the buyer in exchange for some amount of money or consideration as required.

Here, the amount of money can be 

  • Paid or promised
  • Part-paid or part-promised.

The seller is also known as a “transferor,” and the buyer is also called a “transferee.” Let us discuss all the Sale deeds under the Transfer of Property Act.

The Meaning of the Sale

As per section 10 of the Indian Contract Act 1872, the transfer of any immovable property should be made with free will, and no undue influence should be included. 

The sale is the transfer of property ownership from one party to another under certain rules and regulations. The sale deed under the Transfer of Property Act is made and registered with the sub-registrar of the district.

The buyer enjoys a few rights.

  • Right of possession of the property
  • Right to enjoy the purchased property
  • Right to alienate the purchased property
  • Right to sell or lease
  • Right of the title of the property
  • This type of transfer is “absolute” in nature and cannot be claimed or retained after the rights of ownership are given to the buyer. To form and constitute a perfect sale, total rights and privileges must be transferred from the seller to the buyer.
  • In a transaction, the intention and substance are also vital. The seller must make a deed registration with the local sub-registrar to make the sale deed under the Transfer of Property Act valid legally.
  • Section 55 of the Transfer of Property Act deals with rights and liabilities and safety from fraudulent acts.
  • It conveys fair dealings and the roles of both the buyer and seller. This is important to circulate the property and stop it from going stagnant as the sale deed under the Transfer of Property Act helps to resell the property without any hassle.
  • Section 55 is applicable only when there is no contract to the contrary, which means that if there is a clause in the sale deed mentioning liability, rights, duties, and prevention of fraud, etc., then no Section 55 is applied.
  • The contract between the buyer and seller can be expressed or implied, but each clause and terms should be clear to avoid disputes. 
  • Such a contract is called a sale deed that is made on a non-judicial stamp paper and is mandatory to get deed registration as per the sale deed under the Transfer of Property Act, 1882.

Duties and Liabilities of the Seller before Executing a Sale Deed 

Any material defects or damage should be disclosed

  • A duty is imposed on the seller before finalizing the Sale Deed under the Transfer of Property Act as per Section 55. 
  • It is to inform the buyer of any materialistic defects or damage that is present in the title or the immovable property that might be of concern.
  • The seller might be aware of such hindrance, but the buyer is not, so it’s the transferor’s duty and obligation to practice due diligence in this matter. Neglect of this can cause fraud or omission.
  • The seller must transfer a proper title to the buyer. The buyer has the burden to disclose if any defect is found and was not informed earlier during the drafting Sale Deed under the Transfer of Property Act.

Title deed for inspection

  • The title deed can be requested by the buyer if they want to further inspect the immovable property before buying and executing a sale deed under the Transfer of Property Act.
  • The reason is to check if there are any defects or problems with the title of ownership. This causes no liability to the buyer in any way.
  • This meeting takes place, usually at the seller’s place, in the presence of a lawyer to attain legal advice if things are not in place or properly arranged in the sale deed under the Transfer of Property Act.

Solve any queries about the Title

The seller must answer every query and question that the buyer may ask related to the immovable property before executing a sale deed under the Transfer of Property Act. The buyer can rescind the contract if the seller fails to provide explanations and answers regarding the said property.

Executing conveyance

It is the legal process of ownership transfer from the seller to the buyer. This is done before the sale deed under the Transfer of Property Act.

Maintaining the Property and Title Deed

This duty starts before the sale deed under the Transfer of Property Act is executed and ends when it is legally transferred in an absolute way. The buyer has to reduce the price or the consideration if any defect or uncontained damage is found as per Section 55.

Clearing the Encumbrance

The seller has to clear any encumbrance that might be present before executing a sale deed under the transfer of property act. The seller has to resolve it himself or take legal advice to clear the issue if he is not capable of solving it alone.

Rights of a Buyer

A buyer has the privilege of some rights and can exercise them accordingly:

  • During the duration between the ownership and title transfer, the buyer is entitled to any value increase of the property. The seller cannot demand a higher price than what was agreed on the sale deed under the Transfer of Property Act before the increase. The amount remains the same, and the buyer pays the consideration price as per the contract.
  • The seller may ask for a deposit before execution of the contract of sale. The buyer can charge the interest that was paid during the waiting period and the people claiming it in between. This charge is statutory and begins from the day when consideration payment is made as per the sale deed under the Transfer of Property Act.

Conclusion

The sale deed under the Transfer of Property Act contains the rights, responsibilities, duties, and negotiations as agreed upon by both the buyer and seller. This is done according to the effective law provisions.

The process of drafting a sale deed or conveyance deed can be difficult as different clauses are added with various aspects and meanings. A Property Expert Lawyer can help in solving matters related to property transfer.

Bhavya Choudhary

Written by

Bhavya Choudhary

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