SALE OF IMMOVABLE PROPERTY IN INDIA

Sale of immovable property has been defined as a transfer of ownership in exchange for a price paid or promised or partly paid or partly promised under Section 54 of the Transfer of Property Act OF 1882.

For a sale to be a valid sale, it must cover the essential elements as prescribed under Section 54 of the Transfer of Property Act 1882. These elements are as follows:-

• Parties- In a sale, there has to be a buyer and a seller. Both of these parties must be competent to enter into a contract as per the Indian Contract Act.
• Subject Matter- The subject matter of sale deed should be immovable property.
• Transfer of Ownership- Price is the consideration and essence of any sale deed. It may be lump sum or in installments as agreed between the parties.

 

Since, price is an essence for a contract and the buyer pays a hefty amount to seller for his property, there are certain duties which the seller must abide by. The seller is bound to disclose and inform the buyer of any material defect in the immovable property or the title of the immovable property, and if there are any legal proceedings pending on the said immovable property. The seller must offer the buyer to examine all the documents related to title of the immovable property which are in his possession. The seller is bound to execute the sale deed after the sale price is paid to him. Thus, as soon as the sale deed is executed by the seller, he shall be bound to hand over the possession of the immovable property to the buyer.

Once the sale deed is entered into, in order to give such  deed a valid essence, it must be registered as per the Registrations Act, 1908. Also, section 32(3) of the Registrations Act, 1908 provides that power of attorney should also be registered with registrar or sub-registrar of the relevant jurisdiction. The sale deed that is entered between the buyer and the seller is chargeable with stamp duty under Article 23 of Schedule I of the Indian Stamp Act of 1899 and has to be executed on the stamp paper equal to that of conveyance. For any transfer of property, the parties need to comply with the property laws and/or the real estate laws of the country.