Sale Deed vs Agreement to Sell: Know the Difference or Lose Your Money

Buying a home is the biggest financial decision for most Indians. Yet, many get confused between the "Agreement to Sell" (Biana Agreement) and the actual "Sale Deed" (Registry).

Understanding the legal distinction is vital to ensure you actually own the property you paid for.

1. Agreement to Sell (The Promise)

This is a preliminary contract. It states that the seller agrees to sell the property to the buyer at a future date, subject to certain conditions (like payment of full amount).

• Ownership: Remains with the Seller.
• Risk: Remains with the Seller.
• Breach: Buyer can sue for specific performance (force the sale) or damages.

2. Sale Deed (The Transfer)

This is the final document executed at the time of full payment and possession handover. It must be:

• Stamped: Stamp duty paid as per state laws.
• Registered: At the Sub-Registrar's office.
• Ownership: Transfers immediately to the Buyer.

3. The Risk of Not Registering

Some people try to save stamp duty by trading only on "Agreement to Sell" + "Power of Attorney". This is illegal and risky. You do not become the legal owner, and the seller can sell the property to someone else.

4. Essential Clauses in Sale Deed

• Indemnity: Seller must indemnify buyer against existing disputes or dues.
• Clear Title: Declaration that the property is free from encumbrances (mortgages, liens).
• Map & Schedule: Precise description of the property boundaries.

Frequently Asked Questions (FAQ)