'Sale'
A 'Sale' is a transfer of ownership of property, including all
the rights, title and interest with easements and privileges
of the seller to the buyer. The Acts governing sale of immovable
property are Transfer of property Act, Registration Act, General
Clauses Act and Acts of local bodies.
Instrument of Sale:
The ultimate document of sale is the Deed of Sale. It contains important elements of sale like description of the deed, date and place of execution, parties to the deed, covenants, price consideration, description of the property sold, registration of the property and others. Both the buyer and the seller must execute the Deed of Sale.
It is very important that the parties through their respective lawyers scrutinize all aspects of the transaction to their mutual satisfaction. After finalizing the price, the property to be transferred and other terms and conditions, an Agreement for Sale is signed by the parties, which plays an important role in deciding the rights and liabilities of the various parties.
Preparation of the Deed of Sale, execution and registration leads to the transfer of full ownership of property to the purchaser. Generally, the consideration amount is paid simultaneously with the handing over of physical possession and signing of the transfer documents.
Exceptions:
However, there are certain properties that cannot be sold: property which has a successor, a person who is likely to inherit a property by will and a property having easement rights likely to be succeeded by an heir apparent.
The procedure for selling property is as follows:
- Valuation:
The first and foremost requirement is a proper valuation of
the property to be sold. It can be either through self-assessment
or assessment of the property through an external source.
- Self assessment of the property: In
this, one needs to do some initial spadework. One can
ascertain the prevailing market rate in the locality for
similar properties by enquiring informally.
- Assessment of the property through an external
source: There are various agencies through which
one could assess the value of the property. One can hire
the professional services of a Government registered Valuer
for a fee as prescribed by the Valuers' Association. Real
Estate Agencies also offer information on property value
on a formal/informal basis.
- Identifying A Prospective Purchaser:
The next step is finding a prospective buyer. From advertising
in the classifieds section of the newspapers or Websites to
approaching professional brokers or relying on word-of-mouth,
there is no dearth of choice.
While approaching a Real Estate Broker, one should ideally
check and confirm the track record and reputation of that
consultant from market sources. When a purchaser is identified,
it is equally important to do a background check on the credentials
of the purchaser regarding his background, financial capabilities
and reliability.
- Communicating the consideration and other details:
Once the purchaser has been identified all the information
pertaining to the transaction, especially the pricing part
should be communicated and agreed upon, to avoid any suspicion
or gap in information between the purchaser and seller at
a later date, which may eventually result in the cancellation
of the transaction.
Price - The consideration amount can be paid
fully or partly with a promise to be paid in future. It can
be fixed by the agreement between the parties before the conveyance
of the property but should be fixed reasonably.
- Legal Documentation:
Once the purchaser has been identified and all doubts about
the credentials and financial abilities of the prospective
purchaser is put to rest, the seller can communicate to the
Society/Governing Body of the building of their intention
to sell to a specific purchaser and to obtain a No Objection
Certificate (NOC) for the same. The Society may take into
cognizance issues like outstanding payments if any, from the
seller to the Society, encumbrances on the property if any,
etc. The Seller is also required to submit various documents
duly executed by him and in some cases by the Purchaser, to
the Society/Governing Body of the building.
- Registration of the Sale Deed:
After this the seller can proceed with the legal documentation
and execute the necessary documentation and subsequently fulfill
registration norms with the Sub-Registrar of Assurances under
the provisions of the Indian Registration Act.
Every State has its set forms under the Registration Rules
for registration of Sale Deed/Transfer Deed. The Registration
fees for Sale/Transfer will apply as per the rules and regulations
of the states of India, where the property is situated. All
the parties including the confirmation witnesses are required
to be at the time of Registration.
Under the provisions of the Income Tax Act and Rules, Permanent
Account Number (PAN) issued by the Income Tax Department of
India is now compulsory at the time of a sale transaction
by both the seller and the purchaser. For Non-Resident Indians
buying or selling Indian property, Form 60
of the Income-Tax rules has to be filed.
- Handing over actual possession of the property to
the purchaser:
After the entire consideration has been given, one can hand
over the physical possession of the flat or apartment or independent
house by handing over the keys to the premises to the purchaser.