Entering the property market for the first time usually leaves us with confusion due to lack of proper updates or knowledge. Say, if you were to assume that both the sale deed and sale agreement were the same, then you surely have been living under a rock! Although both the terms sound similar, the difference between the two is the hell of a lot. So, let’s learn about it.
The Difference between the Sale Deed and Sale Agreement
A ‘sale agreement’ is a document bearing the conditions and terms, which determine how the transaction of the property would complete. On the other hand, the ‘sale deed’ signifies the purchase of the property. But there are more details that need to catch your eye so as to distinguish the ‘sale agreement’ from the other.
Nothing is particularly mentioned about written sale agreements by the Indian law. Thus, the sale agreement requires to be registered under the Indian Contract Act, 1872 in order to make it legally valid. If your document is left unregistered by any reason, it is not legally acceptable. The parties involved in the agreement are obliged to lay out the terms and conditions in a way such as to retain the validity of the document during disputes in future if any.
What does a Sale Agreement Contain?
- Property information including location, owner, type, ownership, etc.
- Details of the buyer and the seller.
- About the various payments
- Time limit for the transaction to complete
What Do You Need to Check?
The best thing you can do for maintaining clarity in future is to find out if the document features any restriction or not to the insertion of clauses. As a result, the modern day sale agreement contains such clauses that were not founded previously.
How Does it Help You in Home Loans?
Home loan is a necessity for most home buyers, especially in big cities. But the loan application gets processed by the bank only after the sale agreement has been furnished. In that context, you are signing a deal even without knowing if the bank will provide the money you need, or not. You may be deprived of your earnest money if the bank stops paying you in the future. The sale agreement is a tool for the buyers, to eliminate this uncertainty. They can insert a clause according to which, the deal would be materialised only if a certain amount of the loan has been sanctioned by the bank.
Enjoy Membership Rights without Extra Charges
The utility bills such as water and electricity charges are often mentioned in the sale agreement. The new-age residential complexes offer a wide array of luxuries such as gymnasiums, in-house clubs, etc. To avail the membership of these facilities, the residents are usually charged a certain amount. But as a buyer, you can prevent the seller from charging you additional fees for transferring the membership rights to you. The sale agreement allows you to do so, especially those buying resale homes in a residential complex. A clause can be inserted by such buyers to ensure that the membership fees are included in the cost of purchase.
Stam Duty Payment
The buyers in India also have an additional charge to pay in the form of Stamp Duty. The amount ranges between 4% and 10% of the transaction value. The buyers are not legally bound to pay the entire amount and can share the responsibility with the seller, as well. On such an occasion, the deal between the seller and buyer needs a clear mention in the sale agreement.
You don’t just own property through purchase but by inheritance, as well. Thus, you need to be knowledgeable about the current changes in the property inheritance rules, especially if you belong to Islam or about to get converted into the religion, through marriage.
Latest Rules of the Supreme Court regarding Property Inheritance
For the marriage of a Hindu woman and a Muslim man to be valid, the former has to get converted to Islam before the marriage. Otherwise, the wife will only have the privilege of dower but not the right of inheriting the property of her husband. This has been stated by the Supreme Court.
Marriage is a civil contract that the parties concerned, can break at their will, as per the Muslim law. The laws of Islam categorize marriage (nikaah) into the following types:
Sahih – Marriage that is legal; following the obligations of the law
Fasid – Marriage that is irregular and invalid; the legal norms are not completely fulfilled
by the two parties.
Marriage for the fourth time is considered as Fasid while marriage in the absence of witnesses is held irregular by the Islamic law.
A void marriage is one where any of the two parties, is forced to give consent in the marriage. A child born through such a void marriage also didn’t possess any right to his or her father’s property.
But a recent verdict got the Supreme Court declaring such children legitimate and giving them the power of inheriting their father’s property.
As ordered by the Supreme Court, a Muslim marriage is of the irregular type, if the bride is a Zoroastrian (worshipper of Fire) or Hindu (idolater). This marriage cannot be included in the valid or void type. Children born from this marriage are considered legitimate just like those coming from a valid marriage and are eligible to inherit their father’s property. But the wife in such a marriage, especially after consummation, is denied the right to the inheritance of her husband’s property. She will only be entitled to the dower (the share of her husband’s property for the rest of her life).
Whether you want to purchase, sell or stay updated with the recent and crucial changes in the Indian and Kolkata Real Estate industry, get in touch with transventor.in. Right from choosing the property to the possession or sale of it, we have solutions ready the moment you falter a step throughout the transaction.