What are the Meanings of Terms in a Sale Deed?

Key Terms in Property Sale Transactions

1. Seller/Transferor:
   The seller is the individual transferring ownership of the property for a mutually agreed price. This is critical when drafting a sale deed, especially in cases involving NRIs selling property in India or NRIs selling inherited property in India.

2. Witness:
   A person who signs the deed of sale as a witness to confirm that both the buyer and seller have acknowledged and signed the document in their presence.

3. Transferee/Purchaser/Buyer:
   The buyer is the individual purchasing the property from the seller, whose information must be clearly documented in the sale agreement or agreement to sell.

4. Stamp Duty:
   A government-imposed duty on the legal acknowledgement of documents like a sale deed or registration of agreement to sell. It is calculated based on the property's market value, varying from state to state, and must be paid before registration.

5. Title:
   Refers to the rightful ownership of the property. Ensuring a clear title is crucial during the review of agreement to sell to avoid disputes, particularly when NRIs are inheriting property in India or selling inherited property.

6. Registration Fee:
   This fee, in addition to stamp duty, must be paid to register the property in the buyer's name. The amount is typically 1% of the property's value, capped at Rs. 30,000, and varies across states.

7. Sale Price:
   The price agreed upon by the buyer and seller for the property, which must be explicitly stated in the deed of sale or sale agreement.

8. Execution:
   The sale deed is executed once all parties (seller, buyer, and witnesses) sign or affix thumb impressions on the document, acknowledging the transaction. This is a key step in drafting a sale deed.

9. Registration:
   To make the sale valid, the deed of sale must be registered under the Registration Act of 1908 at the sub-registrar's office in the presence of both parties.

10. Proof of Registration:
    A certified copy of the registered deed of sale can be obtained from the registrar’s office. This document serves as valid proof of property ownership in the buyer’s name.

11. Sale Agreement:
    An agreement specifying the price and terms agreed upon between the buyer and seller. It includes all necessary details about the property and parties, often serving as the precursor to drafting the sale deed.

12. Mode of Payment:
    The payment method for the property transaction (e.g., cheque, cash, online transfer) must be clearly stated in the agreement to sell or sale agreement.