Differences Between Agreement Of Sale And Sale Deed



When hunting for luxurious flats in Mumbai, you often hear the words agreement of sale and sales deed. Due to the similarities in the name, you might often think that both are the same. But, let us be an eye-opener here and tell you that an agreement of sale and a sale deed both are different. From the legal point of view, both are different from one another, and it is essential to know the difference to complete a deal. Before getting into the differences, we will guide you with the basic concepts for better understanding.

What Is A Sale Agreement?

Known as a contract of purchase, and contract for sale or sale agreement, an agreement of sale is an agreement to sell immovable property in the future. It specifies all the details from terms and conditions, proposed consideration, to payment details, under which the property in question gets transferred to the buyer. It is also the first document that provides the legal status of your property ownership.

What Is A Sale Deed?

A sale deed is the main legal document used by a seller to transfer his property ownership to the buyer in exchange for an amount. It is also known as a final deed, conveyance deed or title deed and is considered solid proof of immovable property ownership and transactions between seller and buyer. If you wish to obtain absolute rights of your property in the housing projects in Mumbai or other cities, a sale deed is a mandatory legal document. A sale deed along with a proper registration process and stamp duty can give you absolute rights to a property.

Here are the key differences between an agreement for sale and a sale deed:

Objective: A sale agreement gives the right to the promised buyer to purchase the property, whereas the sales deed gives rights, interests, and claims over the property to the new owner.

Registration: Though you don’t need to register an agreement of sale for luxurious flats in Mumbai, you might have to do it for the sale deed and also pay an appropriate stamp fee.

The Risk Involved: In the case of a sale deed, the risk immediately gets transferred to the new buyer. But, when it comes to an agreement of sale, the risk of liabilities remain with the seller until the transfer of property in future.

Type Of Contract: A sale agreement is an executory contract, and a sale deed is an executed contract.

Content: The agreement of sale consists of terms and conditions under which the property will be transferred. Whereas, the sale deed includes, detailed information about parties, property description, payment details, etc.

Transfer: Under the agreement of sale, the future transfer of the property is considered. On the other hand, a sale deed implies an immediate transfer of the property titles.

Violation: If there are any breaches of the sale in the sale agreement, it results in a suit for damages. In the case of sale deed, breaches might lead to a legal complaint as well as monetary compensation for damages.

In order to close a deal of any housing project in Mumbai, it is essential to understand both terminologies. In addition to this, it will also save you from getting caught in a legal problem and keep your property, risk-free. Know the terms, stay aware and keep investing!

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