What's the Difference Between Sale Deed and Conveyance Deed?
Understanding legal documents is very important when handling property transactions in India. When buyers and sellers conduct real estate transactions, they hear terms like sale deed and conveyance deed.
While these terms may sound similar, they are often confused terms that are different documents in real estate. If you plan on buying land, a house, or even a plot for sale in Rajkot, understanding the difference between sale deed and conveyance deed will help you avoid unnecessary confusion and possible legal problems.
In this blog article, we will carefully explain each document, as well as each document's features, and how the documents are different.
What Is a Sale Deed?
A sale deed is an important legal document that exists in property transactions in which the ownership of property from seller to buyer is transferred. The sale deed is created at the time that the buyer has paid the seller the amount agreed upon for the sale. The sale deed legally transfers the ownership and possession of property to the buyer.
Key Features of Sale Deed:
Monetary Exchange: Sale deeds must always include a financial transaction. The seller is paid a specific amount, and the buyer in exchange receives ownership of the property.
Immediate Transfer of Possession: After signing and executing the seller will hand over occupancy of the property to the buyer.
Legally Binding Document: The sale deed is legally binding upon registration at the sub-registrar, and serves as proof of ownership
Stamp Duty: the deed attracts stamp duty based on the sale price of the Property.
If you were to look at options like a plot for sale in Rajkot, the sale deed would be treated as the primary legal span proof of ownership after its purchase.
What Is a Conveyance Deed?
On the other hand, a conveyance deed is a different type of document used to transfer ownership rights in various forms of property transfer.
In contrast to a sale deed, where a payment occurs, a conveyance deed can establish transfers of property in various ways (i.e. inheritance, gifting, or settlement of property disputes).
Key Features of conveyance deed:
Non-Money Transaction: Conveyance deeds fancy term not enough to qualify as money transaction only. Conveyance deeds qualify for all transfers of property where the transfer of ownership rights is through gift, inheritance, or legal settlement.
Transfer title: A conveyance deed transfers legal title but possession transfer may not be immediate based on what is stated in the deed.
Wider Scope: The conveyance deed has a much broader array of types of property transfers apart from just a sale.
Tax Implications: The conveyance deed may have different applicable stamp duty or tax rates depending on the type of transaction (i.e. gifting or inheritance).
Important Differences in between Sales Deed and Conveyance Deed
So what actually is the difference between sale deed and conveyance deed and let us have a good look at it now.Although both relate to transfer of ownership, both the scope and purpose differ.
When to Use a Sale Deed?
A sale deed is used when you purchase property for a fixed price. For example, when you buy a plot for sale in Rajkot or any property across India, when the agreed price is paid you are guaranteed legal ownership of the property and possession.
Common uses for sale deeds encompass:
The purchase of residential, commercial, or agricultural land.
The purchase of apartments or flats.
Property transaction with actual money exchange.
When to Use a Conveyance Deed?
A conveyance deeds can be used for many other scenarios when the property is transferred to another party without a sale. These scenarios include:
Inheritance: The property is transferred to heirs according to a will.
Gift: The property is given to someone else as a gift.
Family Settlement: The property is transferred in a settlement of property between family members.
Development agreements: A developer receives the rights to property for the purpose of construction or development.
Registration Process of Sale Deed and Conveyance Deed
Both documents must be registered with the local sub-registrar in the Indian Registration Act, 1908. This acts as proof of the transaction which is now legally recognizable and can be enforced.
The process includes.
1. Drafting the deed depending on the transaction type.
2. Payment of stamp duty and registration fees.
3. The parties (buyer and seller/transferor) meet before the sub-registrar office.
4. The parties sign in front of witnesses.
5. The parties receive the registered document which is legal proof.
There will be no legal effect to both sale deed and conveyance deed in case of non-registration.
What to do to be sure of the Legality?
Also, in India, in order that a sale deed and a conveyance deed are legally valid, they must be:
Executed in Writing: Both deeds must be written and executed as per the law of the land.
Registered: It is the registration with the local signature of the sub-registrar. You cannot enforce the deed in a court of law without registration.Deed Stamp Duty: A deed must be stamped which is mandatory as stated by the states.
Common Mistakes to Avoid
While working with sale deeds or conveyance deeds, buyers regularly err in ways that may later create problems. Here are the mistakes to avoid:
Not checking the seller's clear title over the property.
Not checking for encumbrances or loans still outstanding.
Not registering the deed properly.
Not paying attention to trivial clauses in the deed which may create disputes later.
Not using a property lawyer to draft and review.
In case you are keen on purchasing a plot for sale in Rajkot, you should ensure that the decorum is duly written and registered to cash in your rights of ownership.
Conclusion
You need to understand the difference between sale deed and conveyance deed as part of your journey to purchasing or selling property in India. Although you might be interested in purchasing a plot for sale in Rajkot or in any other type of property sales, learning how one is expected to use legal paperwork will aid in a seamless and well-crafted transaction.
If you are looking for property deals, QBCON provides a seamless experience. We have everything you need ready to buy plots in Rajkot and help you with property documentation.
FAQs
Q1. Are sale deeds and conveyance deeds the same thing?
No. Sale deeds are essentially suited just for sale transactions, whereas a conveyance deed can refer to sale, but also any type of ownership transfer.
Q2. Can conveyance deeds be executed, where there is no sale?
Yes, conveyance deeds can also refer to transfers that are not formal sales, including the transfer of gifts, leases, and/or inheritance.
Q3. Do I require a lawyer for the preparation of a sale or conveyance deed?
It is a very good idea to speak to a property lawyer to help you to avoid future disputes.
Read More: What Is a Sale Deed?
