Sale Agreement:
The Sale agreement is a prelude document expressing the consent to sell by the vendor and consent to purchase by the purchaser for a particular property with agreed terms and conditions. Under the provisions of the Indian Contract Act, of 1872, an agreement to sell or sale agreement is a legally enforceable contract between the vendor and the purchaser to sell/purchase a particular property expressly agreeing on the terms and conditions throughout the agreed timeline and to complete the deal.
In Karnataka, registering the Sale Agreement is optional. But, the Sale agreement needs to be drafted by a seasoned Property Advocate and executed on the requisite Stamp papers issued by the State Government. The Sale agreement has to be executed by both Vendor and purchase at the same time, at the same place, within the Jurisdiction of the State in which the property is situated.
In case, the Purchaser has the Sale Consideration amount ready with him and the Vendor is ready to convey the title and provide vacant possession of the property, there is no need to execute the Sale Agreement and as such directly the sale deed can be executed and registered.
Sale Deed:
A Sale Deed is a legal document in writing to confirm a property transaction as evidence of the sale
and transfer of ownership of a property from Vendor to Purchaser. A Sale Deed is also referred to
as a conveyance deed.
- The sale deed shall contain:
- Details of the Vendor and Purchaser
- Identification of the Property
- Title Flow
- Revenue Document Details
- Requisite Approvals/licenses obtained
- Encumbrance if any
- Acknowledgment of full sale consideration received with TDS details
- Conveyance of Title and handing over of the Vacant possession of the property
- Two Witnesses
In view of the Importance of the Sale Deed, it is advisable to get the drafting of the sale deed by a seasoned property advocate.
Execution and Registration of the Sale Deed:
The Sale Deed should be executed on requisite stamp papers, by the Vendor and Purchaser before two witnesses. As per the Registration Act, 1908 it is mandatory to register a Sale Deed within 4 Months of execution, before a designated registering authority such as the Sub-Registrar under whose jurisdiction the property is situated.
If Vendor or Purchaser is not able to be present before the registering authority, they can be
represented by their respective Attorneys (Power of Attorney Holders).
Presently (JAN 2023), in Karnataka Stamp Duty is 5% of the sale consideration; however, for the affordable home sector, the concessional stamp duty is applicable, which varies from 2-3 % of the sale consideration. In addition, there will be a Surcharge at the rate of 2% and a Cess at the rate of 10-11% of the Stamp Duty. The registration fee is 1% of the Sale Consideration.
