What is a Sale Deed? Key clauses you must check before signing
A Sale deed is one of the most critical legal documents in any property transaction. It serves as the final proof of transfer of ownership from the seller to the buyer. Once a sale deed is executed and registered, the buyer becomes the lawful owner of the property. Because it carries long-term legal implications, it is essential to understand what the document contains and what you must verify before signing.
What is a Sale Deed?
A sale deed is a legally binding document that records the sale of transfer of immovable property, such as flat, plot, land or house. From the seller to the buyer. It is executed after both parties fulfil the terms mentioned in the Agreement to Sell (also called the Sale Agreement), which preceeded the deed.
Once registered with the Sub-registrar of Assurances, the sale deed becomes conclusive evidence of ownership. Without a registered sale deed, the buyer cannot claim legal rights over the property.
Key Functions of a Sale Deed:
- Transfer ownership rights
- Acts of proof of title.
- Mentions consideration (sale amount)
- Serves as a record for future disputes or claims
- Required for mutation and loan processing
Important Clauses You Must Check In A Sale Deed
1) Parties to the Deed
Every sale deed begins by identifying who is selling the property and who is purchasing it. This includes the full legal name, address, age, relationship details, and PAN information of each party. This section must clearly establish that the seller is the rightful owner: whether they are the sole owner, one of the co-owners, legal heir, or acting through a registered Power of Attorney.
This clause may look simple, but it determines whether the entire transaction is legitimate. If even one co-owner of a legal heir is missing from the deed, the sale can be challenged. If a Power of Attorney, PoA must, itself be registered. Any mismatch between the names in the seller's title documents and the sale deed must be corrected before signing.
2) Recitals and Title History
The Recitals describe the story of the property, how the seller became the owner. It should trace the chain of ownership from the last registered document to the seller, whether through a previous sale deed, gift deed, partition deed, inheritance, or allotment. This section helps the buyer understand the lineage of the propertyu and whether it is consistent with the documents shown.
For example, if the seller inherited the property, the recitals must mention whether it was through a will, intestate succession, or a family settlement. If the seller purchased it earlier, the recitals should contain the registered document number and the date of registration. Any gap or inconsistency here is a potential red flag in the title chain.
3) Detailed Description of the Property
The description (often called the "Schedule of Property") is one of the most important sections. It defines exactly what is being sold, the unit number, plot number, survey number, location, boundaries, carpet area, built-up area, proportionate undivided share of land (UDS), parking details, and any exclusive rights such as terrace, garden, store room, or servant quarters.
For apartments, the deed must clearly distinguish between carpet area, built-up area, and super built-up area. Under RERA, the carpet area holds the highest legal importance. If the project is RERA registered, the deed should ideally mention the same carpet area that appears on the RERA website. Errors in this section can lead to disputes over possession, area shortages, or mismatched unit allocations.
For plots or land, the deed must mention the survey or khasra number and boundaries on all four sides. Buyers should ensure these match the land records and approved layout plans to avoid encroachment or boundary issues later.
4) Consideration (Sale Price) and Payment Details
This clause documents the total sale price and how it has been or will be paid. It should include the breakup of advances already paid, the mode of payment (cheque, RTGS, NEFT demand draft), and whether a portion is financed through a housing loan. Acknowledgement of full and final payment by the seller is critical because once the sale is executed, the seller loses legal rights to the property.
Recording payment details properly protects both parties. From the seller's perspective, it ensures there is no proof of funds received. From the buyer's perspective, it prevents future claims that the purchase price was price was not paid or not fully paid. Courts rely heavily on what is written in this clause.
5) Clear Title and the Right to Sell
This clause is a formal declaration by the seller that the property has a clean, marketable title and that there are no litigations, mortgage loans, unpaid dues, or claims from third parties. It also states that the seller has full authority to sell the property and has not entered into any prior agreement with another buyer.
This clause is often tested in disputes. For example, if previous mortgage loan appears in the Encumbrance Certificate (EC), the seller must have registered release deed to prove that the loan was cleared. If the seller has leased the property earlier of if the tenants exist, the details must be disclosed. A strong title declaration clause is essential for future resale and for obtaining home loans.
6) Encumbrance and Indemnity Clause
This clause protects the buyer from any undisclosed liability on the property. It should state that if any mortgage, lien, attachment, court dispute, or government claim arises in the future that pertains to that period before the sale, the seller will compensate the buyer fully.
Indemnity clauses are crucial in India because not all liabilities appear in the Encumbrance Certificate, For example, unregistered agreements, unpaid society dues, or pending municipal notices. If the indemnity clause is weak or absent, the buyer may have to bear these costs.
7) Possession Clause
This clause records when the buyer will receive possession of the property. For ready properties, it usually states that the seller hands over vacant and peaceful possession on the date of execution. For under-construction properties, the clause should contain a definitive possession timeline linked to approvals, milestones, or RERA timelines.
Possession transfers several responsibilities, including property tax, utility bills, and maintenance charges so the date must be clear. The clause should also confirm that no tenants or unauthorised occupants remain in the property; otherwise, the buyer could face eviction or legal hurdles later.
8) Delivery of Original Documents
The sale deed must list every original document that the seller is required to hand over. This includes previous sale deeds, title chain documents, approved layout plans, building completion or occupancy certificates, khata/mutation records, tax receipts, and society or builder NOCs.
In cases where the property was previously mortgaged, the seller should provide the registered release deed. If the seller has taken a home loan that is still active, the bank will release the original documents only after loan closure. This must be clearly recorded so the buyer knows when they will receive the original title documents.
9) Representations and Warranties
These statements confirm that the seller has truthfully disclosed all information and that the property is free from legal defects. They usually include declarations that all taxes and dues are paid, that there are no acquisition notices from government authorities, that the property has not been altered illegally, and that there are no undisclosed litigations.
This clause is particularly important for resale properties. If later a defect is discovered in the title or unpaid dues surface, these warranties give the buyer legal grounds to claim compensation.
10) Covenants and Obligations
This section defines what each party is responsible for after the sale. The seller may be required to assist in completing mutation, transferring utilities, or obtaining NOCs. The buyer becomes responsible for future maintenance charges, property tax, and compliance with association or society rules.
Having these obligations spelled out avoids confusion later, particularly in societies where transfer rules are strict or in builder projects where maintenance begins before possession.
11) Dispute Resolution and Jurisdiction
This clause specifies which city’s courts will handle disputes arising from the sale deed. It is usually the jurisdiction where the property is located. Some deeds also include arbitration clauses.
Selecting the correct jurisdiction matters because it determines where you will need to file a suit in future disputes. A buyer should ensure that the chosen jurisdiction is practical and legally appropriate.
12) Execution and Witnesses
The deed concludes with the signatures of the buyer, seller, and two independent witnesses. At the time of registration, biometric verification, photographs, and identity checks are done at the Sub-Registrar’s Office. Witnesses play a formal role in validating that the deed was executed willingly and voluntarily.
Registration of a Sale Deed
Registration legally completes the transfer. It takes place at the Sub-Registrar’s Office having jurisdiction over the property. Stamp duty and registration fees are paid based on the government-assessed value or the actual sale price, whichever is higher. Once registered, the sale deed becomes part of public records and is conclusive evidence of ownership.
Process of Registering a Sale Deed
- Draft the sale deed
- Prepare stamp duty via e-stamp
- Fix an appointment with the Sub-Registrar
- Visit the SRO with parties and witnesses
- Complete biometric verification
- Pay registration charges
- Submit the deed for scanning and record entry
- Receive the registered copy
Documents Required For A Sale Deed
- Identity proofs and PAN of buyer and seller
- Previous sale deed or mother deed
- Encumbrance Certificate
- Tax paid receipts
- RERA documents (for new projects)
- Bank NOC (if loan exists)
- PoA, if applicable
- Proof of stamp duty and registration fee payment
Common Mistakes to Avoid
Failing to verify the title chain, not checking the Encumbrance Certificate, accepting vague possession language, ignoring parking rights, understating the sale value, skipping indemnity clauses, and rushing through signing without understanding the terms are some of the most common errors buyers make.
Things to Check Before Signing a Sale Deed
Ensure that the property description matches the approved plans and RERA details, that all dues have been cleared, that the title is clean, that the payment acknowledgment is accurate, that the indemnity and warranty clauses are strong, and that all promised inclusions (parking, terrace rights, fixtures) are clearly listed.
