Ask any average Indian, and they'll tell you that owning a home is one of their biggest milestones or their most important goal. The energy, research, resources and money that goes into buying a home, is unparallel. And yet, so many Indians are often cheated out of what is rightfully theirs - falling prey to several kinds of property frauds. In 2014, the Delhi police claimed that nearly 30 % of the cases brought to their attention was of property fraud. Despite staying wary of fraudulent developers and brokers, home buyers find themselves embroiled in cases of disputed titles, dubious sales and fake promises.

Now, thanks to the introduction of the Real Estate Regulatory Authority, swindling developers have been on the down-low. However, one of the things that you, as a homebuyer can also ensure, is signing a valid and verified Sale Deed with the developer, that cements your ownership of your new house, in the eyes of the country's legal authorities.

Section 54 of the Transfer of Property Act, 1882, defines a sale as a transfer of ownership of an immovable property for a consideration and in this article, we will be examining the Sale Deed, a document that legalizes the sale. In understanding what its prominence and functions are, and what elements make up the key points of a Sale Deed, one can deduce why this document is so essential for every homebuyer.

WHAT IS A SALE DEED?

Before we delve into the details and the jargon, let us first understand what a Sale Deed is. A Sale Deed is proof of your property ownership. It is a legally valid document that outlines every detail of your transaction and the terms and conditions of the sale. This document is signed by both the buyer and the seller in this case, the developer or their legal representatives in the presence of at least two witnesses. As dictated by the Registration Act of 1908, the Sale Deed is undoubtedly the most important document in the process of a property purchase. The deed is drafted on a non-judicial stamp paper, that is recognizable by the Government of India.

WHO ARE THE PARTIES INVOLVED?

The two parties to a Sale Deed is the buyer, which would mean you if you are buying the home, and the seller, which in this case is the developer. As a clarification, it would be wise to point out, that most often it is a legal agent of the developer, of a legal employee from the developer's office with the rightful power of attorney, who signs the deed along with the homebuyer.

The deed starts by listing out the details of both parties. Essential information such as name, postal address and age are all documented on the Sale Deed. It is important to register that if incorrect or false information is detected on the Sale Deed, the whole document stands void, and can lead to grave consequences. Both parties must sign the deed with bonafide intentions. It is also mandatory for at least two witnesses to be present during the signing. As of April 1, 2019, the homebuyer's Aadhar Card has to be linked to the registration as well, making it a more strongly protected document.

WHEN IS THE SALE DEED SIGNED?

Before the Real Estate Regulatory Act came into existence, the Maharashtra Ownership Flats Act didn't make it mandatory for all the parties involved to sign an agreement of Sale Deed, after the down payment. This has several downsides, two of the most important ones being dishonest developers had the leeway to delay the signing and registration of the sale of a property, allowing lots of loopholes in the purchase, exposing the homebuyer to property fraud, delay and other harassments investors who've bought flats with no intention of paying the full amount to sell it to another buyer at a higher amount, without registration. In the lieu of RERA, homebuyers and developers must enter an agreement to sign a Sale Deed and register the apartment on a government roaster after of the purchase amount has been paid.

This effectively means that after the homebuyer makes a downpayment of the booking amount, both parties have to sign a sale deed and register it with the government, immediately.

REGISTRATION OF THE SALE DEED - THE AFTERMATH

The process of legally registering your property in the eyes of the government and establishing your ownership doesn't just stop at signing a Sale Deed. One needs to physically go and register the deed with the civic authorities.

Typically, the deed is signed at the developer's office, after the homebuyer thoroughly peruses through all the clauses and conditions. After both parties sign the deed, they make a beeline at the jurisdictional Sub - Registrar's office, to get it legally verified and entered into the government books. Both parties also undergo a biometric test, after which an index II is issued, that serves as an official record that confirms that all transactions have been concluded.

The original Sale Deed remains with the homebuyer.

WHO BEARS THE COST?

The stamp duty costs and other fees are borne by the homebuyer. The developer, on their part, ensures that the property, for example, a building project) has cleared all its dues. These would include loans taken for the property in question, property tax, water and electricity bills.

ELEMENTS OF A SALE DEED

1. DESCRIPTION OF PROPERTY

One of the most essential parts of the sale deed is outlining the property details. The document must have accurate and correct details of the property, starting with its configurations, total area, identification number, details of construction, exact location and details about its surroundings. If it hasn't yet been fully constructed, the deed needs to detail, by when the property is expected to receive possession, as dictated by RERA.

2. SALES AGREEMENT

A sales agreement is different from the sales deed but is the main crux of the document. This clause dictates that both buyer and seller will mutually agree to honour all the terms and conditions of the agreement, so it doesn't interfere with the rights of either party, in the transaction. This clause creates the buyer's rights to question the progress of the property, to their satisfaction, and the seller's rights to receive timely payments as agreed upon, with the homebuyer. This is usually drawn up before the Sale Deed.

3. CLAUSE FOR SALE CONSIDERATION

This clause outlines the monetary details of the transaction. The agreed-upon amount basically, the cost of the apartment must be included in the sale consideration clause. And the amount that would be paid, at the time of the sale deed execution.

4. DETAILS OF PAYMENTS ALREADY MADE

The deed is also instructed to carry out the details and history of every monetary transaction between the homebuyer and the developer. This means, if the buyer has made smaller payments before, that too needs to be clearly stated in this clause. The mode in which these payments were made need to be mentioned as well, be it by cheque, cash, or DD.

5. PASSING OF THE TITLE

This clause is to transfer the title of the property from the seller to the buyer, establishing the ownership of the new homebuyer. This could stand true for a brand new primary property, as well as resale property. This is an important marker, in determining a homebuyer's autonomy over the property. This clause also gives the seller a set time limit to carry out this transfer of property, and effectively all rights over the property, on to the buyer.

6. POSSESSION DETAILS

As dictated by RERA, the sale deed must now outline the possession date and the construction schedule as well, giving a date or a timeline for the final possession of the property. Under this clause, the seller needs to pass on all the right information regarding the property's possession and progress to the homebuyer.

7. INDEMNITY PROVISION

This clause is unique to resale property sale deeds only. This clause reiterated that the primary seller owner of the house is responsible for clearing all statutory charges that stand against the property. These would include outstanding electricity bills, property tax, water bills and every maintenance charges, before signing of the sale deed.

Should there be an impending home loan in the picture taken for the property, the primary seller is responsible for clearing the debt, and not the new buyer. They are also responsible for getting clearance documents from the bank stating that the property has been fully paid for.

8. DEFAULT CLAUSE

All Sale deeds bear a clause that elaborates on the penalties either party would have to bear, if they default in payment, possession of any other terms and conditions, that was decided. The penalties would be awarded to the non-offending party in the question.