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What is a Sale Deed and Why is it Important in Home Loans?

Nov 11, 2022
What is a Sale Deed and Why is it Important in Home Loans?

More than 50% Indians own their houses. The other part of the population is also constantly working towards owning their apartments, villas, and residential plots. For this, a home loan is one of the smartest solutions one can take up. Under one of the major documentations involved in the process of finalising the purchase of a home is a sale deed. This article covers the definition, advantages, and other intricacies of a sale deed in a home loan.

What is a Sale Deed?

When you buy a house from someone, you pay them, and they give you the ownership of the place. This transfer of ownership calls for a registration with the government that you are now the new, legally accepted owner. A sale deed is drafted and duly signed by the two parties involved.

The sale deed meaning is simple. It is an official, legal document in writing that declares the buyer’s name as the new owner of the property. It assigns all titles, rights, and responsibilities to the buyer. A property sale deed is critical proof of ownership, especially for banking and legal matters. Most importantly, you will need to produce a sale deed while applying for the home loan.

What is the Sale Deed Number?

The Sale Deed Number is a unique identification assigned to a specific property transaction. It serves as a reference to the legal document that formally transfers ownership from the seller to the buyer. This document, known as the sale deed, includes essential details about the property, the parties involved, and the terms of the sale. The Sale Deed Number is crucial for record-keeping and verification purposes, allowing individuals to trace and authenticate property ownership and transactions through official records and government authorities.

Components of a Sale Deed

A sale deed is a crucial legal document that outlines the terms and conditions of the sale and transfer of ownership of a property from the seller to the buyer. Its components include:

Details of Both Parties: Full names, addresses, and other identification details of both the seller and the buyer.

Property Details: Comprehensive information about the property, including its address, dimensions, and any other relevant specifics.

Indemnity Clause: A clause that provides legal protection to both parties, specifying that they will be indemnified against any future claims or disputes related to the property.

Payment Details: Clearly state the total sale amount, the currency in which it is transacted, and the modes of payment agreed upon.

Mode of Payment: Describes how the payment will be made, whether through a cheque, bank transfer, or other means.

Possession of Property: Outlines the date on which possession of the property will be transferred to the buyer.

Witness of the Property: Details of witnesses present during the signing of the sale deed, including their names and addresses. At least one witness from both parties should be present and mandatorily sign the sale deed.

A well-drafted sale deed ensures a transparent and legally binding property transaction, protecting the interests of both the buyer and the seller. It is advisable to consult legal professionals during the preparation and execution of a Sale Deed to ensure compliance with local laws and regulations.

Benefits of a Sale Deed in Home Loans

This legal status of ownership sealed by a sale deed has numerous benefits to it. Here are the top 4:

Legal Proof of Title

In the case of any legal dispute, it is the sale of deeds for property that will stand in the favour of ownership transference. Hence, it empowers you to claim the property in context.

Clear Statement of Rights

This document clearly states all rights and rewards that come along with the home. Hence, you can defend your stance in case things go haywire.

Detailed Information About Home

A sale deed in a home loan accurately describes important details of the property in question, such as geographical location, pincode, area of plot, year of construction, etc., which are vital for home loan processing.

Proof of Transaction

A sale deed seals the home loan transfer from seller to buyer and confirms in writing that the amount is paid.

Documents Required for a Sale Deed

Without a sale deed, it is impossible to get a home loan. Check out the documents required for a sale deed:

  • Registered names, photographs, and PAN cards of the buyer and seller
  • Stamp duty fees (between 7-10% of market value)
  • General power of attorney
  • Building plan
  • NOCs (No objection certificate)
  • Receipts of payment and property tax
  • Possession finalisation letter
  • Certificates of encumbrance, occupancy, and completion

It will also be beneficial to check out all the documents required for a home loan along with the sale deed.

What is the sale deed registration process?

The sale deed registration process involves several steps to ensure a legally binding property transaction. Here is an overview:

Visit the Sub-Registrar's Office: Parties can visit the office of the sub-registrar in person or book an appointment online for the sale deed registration.

Facilitation Centre Visit: The involved parties need to visit the facilitation centre for document verification. This step is crucial to ensuring that all necessary documents are in order.

Document Inspection by Sub-Registrar: The sub-registrar examines the submitted documents for any discrepancies. This is a crucial step to verify the authenticity and legality of the transaction.

Formalities Completion: After all necessary formalities are completed and the sub-registrar approves the documents, the parties involved receive a receipt.

Receipt Collection: Within approximately 15 days of completing the process, the parties can collect the sale deed from the sub-registrar's office.

It's essential to follow the sale deed registration process diligently to avoid any legal complications in the future. Seeking legal advice and guidance during this process can contribute to a smooth and legally sound property transfer.

Things to Consider While Registering For Sale Deed

Before you sign the final contract and sale deed, keep in mind the following:

  • Never miss reading every single term, condition, and criteria on all documents that you sign. From the home loan application to sale deed, don’t overlook any written statement that affects your money or rights.
  • Be well informed about all the charges required to be paid. For instance, know the stamp duty fee imposed in your state and check with your lending institution if there are any additional charges to the home loan.
  • Always keep your original documents handy, but carry with you 2 photocopies of each too.
  • In every real estate transaction involving a sale deed, there is a witness required to be present at all times. Make sure that all steps are carried out in the presence of a reliable eye-witness.

Getting a Certified Copy of Sale Deed

Securing a certified copy of the sale deed is important, especially if the original document is lost. In such cases, file a police complaint (FIR) and obtain a non-traceable certificate. Publish an advertisement about the lost sale deed and file an affidavit at the sub-registrar office. The affidavit, notarized and accompanied by the FIR, non-traceable certificate, advertisement, and property details, requires a specified fee. After completing the process, the certified copy is issued within 2 to 4 weeks, ensuring the property owner maintains legal documentation.

What is a sale deed agreement?

A sale deed agreement is a legal document that formally transfers the ownership of a property from the seller to the buyer. It includes crucial details such as the names and addresses of both parties, property description, sale consideration, payment details, possession date, and any other terms and conditions agreed upon. This agreement serves as evidence of the property's sale and establishes the buyer's rightful ownership. Once executed, the sale deed agreement is registered to make it legally valid and enforceable.

Difference between a sale deed and a sale agreement

Criteria Sale Deed Sale Agreement
Definition A legal document that transfers ownership of a property from the seller to the buyer. A preliminary agreement outlining terms and conditions for the future sale of a property.
Nature Conclusive and final. Conditional and preliminary.
Legal Status Legally binding and enforceable. Not as legally binding; serves as a precursor to the sale deed.
Execution Time Executed after the sale agreement. Executed before the sale deed.
Ownership Transfer Transfers ownership from the seller to the buyer. Does not transfer ownership; it sets the stage for future transfers.
Details Included Comprehensive details, including property description, payment terms, possession date, etc. Preliminary terms and conditions, without full property transfer details.
Registration Must be registered to be legally valid. Registration is optional but recommended.

In summary, a sale agreement is a preliminary understanding, while a sale deed is the final, legally binding document that effectuates the transfer of property ownership.

Conclusion

Taking up a home loan to finally see your dreams come true is a major step in anybody’s life. Make sure you have all the documents in hand and cross-verify all essential terms and conditions, especially in the property sale deed. To make your process easier, SMFG Grihashakti comes with swift loan processing and reduced EMIs. Check out our home loan interest rates and use an online EMI calculator to understand how to structure your monthly budget around your home loan.

FAQ's

What is a sale deed agreement?

A sale deed agreement is a legal document that finalizes the transfer of property ownership from the seller to the buyer. It outlines the terms and conditions of the sale, including property details, payment terms, and possession date.

What is the purpose of a sale deed?

The primary purpose of a sale deed is to officially transfer ownership of a property. It serves as a legal and conclusive document, ensuring that the buyer gets clear and marketable title to the property.

What is the difference between agreement for sale and sale deed?

An agreement for sale is a preliminary document outlining terms, while a sale deed is the final, legally binding document completing the property transfer.

What should I do if I have lost my original property documents?

In case of lost property documents, file an FIR, publish an ad, and apply for a certified copy from the sub-registrar office, attaching the necessary documents.

Why is a sale deed required?

A sale deed is necessary to establish legal ownership and transfer of a property. It provides a clear title and protects the buyer's rights.

Is there any validity of the sale deed?

The sale deed is valid from the date of execution, and its validity is not limited by time.

Who makes the sale deed?

The sale deed is typically drafted by legal experts or conveyancers and executed in the presence of a sub-registrar.

Can you sell a property without the original sale deed?

While not advisable, selling without the original sale deed is possible by obtaining a certified copy from the sub-registrar office.

Is a sale deed necessary for a home loan?

A sale deed is essential for a home loan, as it establishes the property's legal ownership and serves as collateral for the loan.

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

SMFG India Home Finance Co. Ltd. (Formerly Fullerton India Home Finance Co. Ltd.)
CIN number: U65922TN2010PLC076972
IRDAI COR No: CA0492

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