Difference Between Sales Deed And Agreement To Sell
WHAT IS AGREEMENT TO SELL?
If the property’s transfer is on a future date and subject to further terms and conditions – it is called Agreement to Sell
An agreement to sell is, by definition, a memorandum of agreement that outlines the terms and conditions of a prospective contract of sale, as well as the proposed consideration and payment details. It is a crucial document in the sale of immovable property. It is the document that serves as the foundation for the Deed of Sale. It facilitates the sale process by outlining the steps in great detail. This contributes to a better understanding of the parties’ respective roles in the sale.
- Proposal to purchase and agreement to sell
- Detailed description of the property
- Proviso requirement of good marketable titles and no encumbrances
- Payment details including earnest money
- Delivery of original documents on payment
- Drafting of sale deed and registration of the same if titles found good
- Method of delivery of property
- Refund of earnest money in case of improper titles
- Remedies for non-completion of sale on part of vendor including specific performance and bearing of expense of proceedings
- Forfeiture of earnest money, if purchaser fails to complete the sale
- Action if the property is affected by notice from government authorities.
- Production of tax related certificates
- Schedule description of the property
- Memo of consideration for earnest money received
- All other matters incidental to the proposed Sale
WHAT IS A SALE DEED?
If the property described is transferred through the contract immediately- it is called Sale. A deed of sale is a legal document that transfers ownership of property rights from one party to another. It is typically written as a continuation of the sale agreement. In a deed of sale, all of the terms and conditions mentioned in the former would be fulfilled and observed. The following are some of the points covered in a Sale Deed.
- Description of the ownership and property
- Clear titles verified by the purchaser
- Reference to the Agreement to Sell and the price details
- Release/discharge of the property with description of facilities measurements. privileges, easements and other rights
- Transfer of all rights, interests, claim, demand whatsoever of the property
- Facilitating peaceful enjoyment of the property without hindrance
- Indemnifying the purchaser against losses arising out of negligence/actions of seller or heirs
- Full authority of the vendor to sell.
KEY DIFFERENCES BETWEEN SALE AND AGREEMENT TO SELL
- A sale implies immediate transfer of property. It is accomplished through a Sale Deed, while an agreement to sell implies future transfer.
- Risks are transferred immediately in Sale, whereas they remain with the seller in case of Agreement to Sell.
- A Sale is an executed contract, while an Agreement to Sell is an executory contract.
- Breach of Sale can result in a suit for price as well as damages, while any breach of terms of an Agreement to Sell can result only in suit for damages.
- A Sale Deed is a compulsorily registrable instrument whereas an Agreement to Sell is subject to laws of the particular state.
| SALES DEED | AGREEMENT TO SELL |
| A sales agreement is a contract where in the seller transfers the ownership of property | ATS is an agreement where a seller agrees to transfer the property, subject to certain pre conditions and agreed covenants. |
| Sales Agreement has all the details related to price, name of both the parties, address | Agreement to sell has terms and conditions under which property will be sold off |
| Nature of sales agreement is absolute | Nature of agreement to sell is conditional |
| Risk and rewards are transferred to the buyer in sales agreement | Risks and rewards are not transferred in agreement to sell |
| Paying stamp duty and registration charges is mandatory in sales agreement | There is no need to pay stamp duty and charges |
Disclaimer – The above article is posted only for the general knowledge and can not be construed to be a legal advise.
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