Sales Deed vs. Sale Agreement: Understanding the Differences

The Complete Guide to Paying Guests & Sample PG Rent Agreement

Whether you’re a student or a young professional looking for accommodation, paying guest (PG) lodging can be an excellent option. However, it’s essential to understand the importance of a well-drafted sample PG rent agreement to protect yourself and ensure a hassle-free stay. In this blog, we will cover everything you need to know about sample PG rent agreements, from choosing a suitable PG to understanding the terms and conditions. Read on to make your PG experience a smooth and secure one.

Importance of PG Agreement

Paying guest lodging is frequently seen as a money-saving strategy for bachelors who cannot afford to rent a full home. These rent agreements for PG also give homeowners adequate room to accommodate more personal income who don’t have spare homes to rent.

The popularity of Paying Guest accommodation agreements is increasing in cities, making it a viable option for many. However, with this rise in popularity, there is also an increased risk of visitors being duped into paying hefty deposits and fees for numerous amenities that the owner may fail to deliver. To safeguard against such situations, anyone planning to stay in a paying guest property is advised to draft an agreement with the owner outlining all of the terms and conditions as a precautionary and safety measure.

Checklist Before Choosing a PG and Signing a Rent Agreement 

Regardless of the room’s size, it is advisable to prioritize accommodations with a well-thought-out and efficient design. Many rental properties are now focusing on incorporating clever designs that maximize space while catering to the requirements of contemporary consumers. While unfurnished rooms might initially appear more cost-effective than furnished ones, it is essential to consider the additional expenses associated with furnishing them. If you lack furnishings or have budget constraints for decor, opting for a furnished room would be a prudent choice to avoid unnecessary expenditures in the long run.

Make sure you have looked at the sample pg rent agreement before finalising a place where you can unwind and recharge after a long workday before.

Here are some tips on how to inspect a PG’s cleanliness amid the coronavirus outbreak;

• Several state governments have published guidelines for paying owners of vacation rental properties. No matter where you live, you must ensure that your PG is adhering to the regulations set down by the Karnataka government.
• Each paying guest’s identification (Aadhar card, passport, driver’s licence, etc.) should be on file with the proprietor of the PG accommodation.
• Amid the current COVID-19 concerns, it is crucial to ensure that the paying guest accommodations strictly adhere to the guidelines set by the government.

Sample of Paying Guest Agreement

The following information must be included in the paying guest rent agreement:

• Names of those who are involved
• Description of the assigned space
• Tenant and owner behaviour expectations
• Deposit sum
• Regular rent

You can customise, add further information, and remove or add new clauses to the sample pg rent agreement. Once the terms of the agreement are acceptable to you, you can publish it on stamp paper and have everyone sign the deed.

Most PG owners will need a security deposit for up to six months. Usually, they do this to avoid having to look for new renters in the middle of the process. Therefore, it’s crucial to enquire about these terms of service:

• Will I receive my security money refunded if I plan to quit the PG in the middle of my stay?
• After the lease period, will the overall security deposit be returned?
• How is the cost of losses determined, and how is the inventory of eligible damages determined?

After choosing the PG agreement form, complete it with the information listed. You can tweak, add more information, or remove or add more clauses if you want. Once you are satisfied with the agreement, reproduce it on stamp paper, get done with the stamp duty for paying the guest agreement and have all parties sign the deed. Additionally, two witness signatures are required.

Important Terms Rules and Regulations for Paying Guests 

Curfew And Restrictions on When to Use Amenities – Ensure to discuss curfew timings and amenity usage guidelines with the owner, especially if you have irregular schedules or specific requirements, like access to non-vegetarian food and communal facilities.

Guests’ Rights – Clarify guests’ rights with the owner, covering topics such as visitor policies, arrangements for parents’ visits, hours for friends’ visits, and guest dining arrangements, to avoid any misunderstandings or dissatisfaction.

Cleaning Routine – Demand regular housekeeping services. Although most PGs are eager to do this, you will ultimately be the one who lives in the room. Therefore, be sure to receive assistance on that front.

Various House Rules – Know the house regulations before you enter. They include fixed TV times, no guests, no non-vegetarian cuisine, no drinking or smoking, restrictions on the breakout area, and more. You should probably look for yet another Paying guest if it bothers you.

Create an Online Paying Guest Agreement

The preference for paying guests among young workers and students is growing. A PG offers them a setting that feels like home so they can thrive while living away from their hometown. While choosing a PG agreement in Mumbai or elsewhere in India, students often neglect the significance of signing a Paying guest housing agreement with the landowner, focusing instead on qualities like superb amenities, delicious food, high security, and more.

However, by doing this, they may unknowingly expose themselves to potential risks, including hefty deposits and disputes with landlords. To ensure a secure arrangement, it is essential for students and young workers to be aware of the option of creating an online paying guest agreement, providing them with a legally-binding document that safeguards their interests.

Paying Guest Agreement Format 

BETWEEN

___________________________

AND

___________________________

Re: One room in Flat No. _______________________

AGREEMENT made at ________________ this ____________ day of _____________________ 2000 BETWEEN Mr. ___________________ hereinafter referred to as “the Owner” of the One Part AND (i) Mr. ____________________ and (ii) _____________________________ hereinafter referred to as “the Paying Guest” of the Second Part;

WHEREAS the Owner is seized and possessed of and is occupying Flat No.____ on the ______ floor of the building named and known as ___________ situated at ____________________ _____________;

AND WHEREAS the Paying Guest have requested the Owner to allow them use of one bedroom in the flat in the aforesaid premises for their own use only on a temporary basis on the terms and conditions hereinafter written.

NOW THIS AGREEMENT WITNESSETH:

1.      The Owner hereby agrees to permit the Paying Guest to use one bedroom in the aforesaid premises being Flat No._________ in _______________ situated at __________________________________________ together with the use of the attached bathroom, on paying guest basis.

2.      This Paying Guest Agreement shall be for a period of _________________ only commencing from ______________________.

3.      The Paying Guest shall pay an amount of __________________ (Rupees _____________________________________ only) for every quarter (Three months). The charges shall include the use of bathroom, and other incidentals and society charges. The Paying Guest have agreed to pay the entire electricity bill, less an amount of Rs.200/- (Rupees two hundred) per month.

4.      The Paying Guest have paid at the time of execution hereof a security deposit of Rs. ___________ (Rupees ___________________________________ only) which shall remain with the Owner free of interest, until the termination of this agreement, and shall be returned to the Paying Guest, subject to any deduction for payments due hereunder. The Paying Guest shall pay a further sum of Rs. _____________ (Rupees ______________________________ only) as Security Deposit on or before ______________.

5.      The Owner may allot to the Paying Guest any of the bedrooms in the said flat for the use of the Paying Guest and the Owner may change the allocation at any time during the pendency of the Agreement.

6.      The Paying Guest hereby specifically confirm and agree that they have no right whatsoever to the said premises nor shall claim to be tenant/sub-tenant or licensees nor shall claim any other right whatsoever in or to the said premises.

7.      It is clearly agreed and understood that the Paying Guest have not been given any key to the entrance door of the flat nor even to the room that is allocated to them for their temporary use from time to time.

8.      They Paying Guest may use the passages in the flat for access to the room and may use the kitchen for cooking their own food only provided that no disturbance whatsoever is caused to the use of the kitchen and passages and other portions of the flat by the Owner and his servants and others.

9.      The Paying Guest shall not cause any disturbance at any time and may permit guests or any outsider to enter the flat only with the permission of the Owner.

10.   In the event that the Paying Guest misuse any of the facilities in the flat or causes any disturbance or delays in making payment of the Paying Guest charges, this Agreement shall stand terminated forthwith and it is hereby specifically agreed and confirmed that the Owner shall be entitled to enter the room allocated to the Paying Guest for the time being and to remove all the belongings of the Paying Guest and dispose of them.

11.   This Agreement shall stand terminated immediately upon the expiry of the period mentioned hereinabove.

12.   The Paying Guest shall be responsible for any damage caused by them or by any other outsider who has entered the flat through them to the said flat and to any of the furniture, fixtures and equipment therein, reasonable wear and tear excepted.

IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands the day and year first hereinabove written.

SIGNED AND DELIVERED by the within- )

named MR. _________________________ )

in the presence of )

SIGNED AND DELIVERED by the within- )

named (i) ________________________ )

and (ii)____________________________ )

in the presence of)

————————————————————————————————————————-

R E C E I P T

Received this day the sum of Rs. _____________ (Rupees ______________________ only) by cheque bearing No. ____________ and Rs. ______________ (Rupees _________________________________________ only) by Cheque bearing No. _______________dated _____________ both drawn on _________________ Bank ___________________ Branch from Mr. ________________________ and Mrs._____________________________, the Paying Guests towards security deposit.

WE SAY RECEIVED

Mr. ___________________________

The above sample paying guest agreement format pdf but it can always be negotiated and put forward by the landowner in the sample pg rent agreement. 

PG Rules and Regulations By Government

Here are some common paying guest rules and regulations that you may encounter:

No Smoking or Drinking: 

Several PGs have strict rules banning smoking and drinking on the property. Often, this is done to encourage a smoke-free environment and prevent any potential problems between neighbours. 

Curfew and Visitor Policies: 

Curfews can be in effect at some PGs, requiring inhabitants to return to the premises within a specific time. Likewise, it could be forbidden to let visitors or guests stay for the night. 

Maintenance and Cleanliness: 

Residents are required to keep their rooms tidy, dispose of garbage properly, and not damage anything. 

Payment and Billing:

PG accommodations usually have specific rules and regulations regarding rent, security deposits, and billing. It’s important to be aware of the payment schedule, late fee policies, and refund procedures, if any. This will help avoid any misunderstandings or financial disputes down the line.

Code of Conduct:

PG accommodations have a code of conduct that outlines expected behaviour and mutual respect among residents. This may include guidelines on noise levels, use of common facilities, and respecting the privacy of fellow residents. Being mindful of these rules and regulations can foster a positive and inclusive living environment.

Inaccurate Information:

If inaccurate or partial information is provided, the PG accommodation will be cancelled.

Switching off the electrical appliances:

After leaving the rooms, guests are required to turn off the lights, fans, AC, and bathroom geyser to conserve electricity. 

No damage to the property:

Guests staying at the aforementioned premises shall be held responsible for any costs associated with damages to the property, including any harm done to furniture and fittings as a result of their negligence.

Harassment:

Ragging and bullying are strictly forbidden. Living in a PG comes with its own set of rules and regulations. It’s important to familiarise yourself with these PG rules and regulations and abide by them to ensure a pleasant living experience for yourself and your fellow residents. Remember to be respectful, responsible, and cooperative to create a harmonious living environment in your PG accommodation.

Cost of Paying Guest Agreement

Paying guest agreements in India are cost-effective and increasingly prevalent in today’s scenario. As paying guests become more informed, they recognize the importance of having an agreement to protect their rights and ensure security. After selecting a PG, the next crucial step involves establishing a paying guest agreement with the landlord. While some landlords may initially be hesitant to sign a contract, it’s essential to educate them about the benefits of doing so, assuring them of a mutually beneficial arrangement.

 The owner, as well as the paying guest, are both shielded from future legal disputes by a well-written sample PG rent agreement. It also makes sure that neither party deviates from the predetermined guidelines. The agreement for paying guests also serves as the paying guest’s evidence of local address. Additionally, it will confirm the rent you will pay the owner and the amenities he is required to give you.

In addition to the contractual expenses, paying guests should duly consider the essential inventory required for their PG accommodation. It is imperative to recognize that not all PG facilities offer the same level of amenities. For instance, while some PGs may provide only minimal furnishings, others may lack any provisions altogether. Conversely, certain accommodations may present themselves as temporary living arrangements. A prudent approach involves carefully assessing the amenities provided by each PG before making a decision.

If you’re about to move into a PG, be sure it has the basic specifications:

● Bed/mattress

● Table/desk

● Chair

● Cupboards

You should also list the items you’ll need to keep yourself clean and hygienic. It is advised to have your supplies on hand and to avoid sharing them with others unless essential, especially in light of the current coronavirus pandemic. This comprises:

● Buckets/mugs

● Doormat

● Wipes

● tidy towels

● Bed Sheets/bedspreads

● coverings and pillows

● Toiletries

Ensure a hassle-free stay in your PG accommodation by carefully negotiating and finalizing the sample pg rent agreement with the landowner. This will provide protection and documentation of your stay, including the rent paid and amenities utilized. However, if you encounter any challenges along the way, don’t hesitate to reach out for expert assistance. Contact NoBroker legal services today to navigate the process smoothly and efficiently. 

Frequently Asked Questions

Rental Agreement Bond Papers: Sample, Assistance & more!

Rental transactions are a fundamental aspect of the real estate world, and the paperwork involved can sometimes seem overwhelming. One crucial document that plays a significant role in rental agreements is the rental agreement bond paper. In this comprehensive guide, we will explore the ins and outs of rental agreement bond papers, why they are crucial, and how they benefit both tenants and landlords.

Understanding Rental Agreement Bond Papers

Rental agreement bond papers, often referred to as rental bonds, are legal documents that serve as a financial guarantee in rental agreements. These papers outline the terms and conditions of the rental, including the amount of money held as a security deposit and the conditions for its release.

The purpose of rental agreement bond papers is to protect the interests of both parties involved—the tenant and the landlord. They provide a clear framework for managing the security deposit and settling any disputes that may arise during or after the tenancy.

How do Rental Bonds Work?

Rental bonds work by collecting a specific amount of money, known as bond money, from the tenant at the beginning of the rental agreement. This money acts as a security deposit, ensuring that the tenant fulfils their obligations, such as paying rent on time and maintaining the property in good condition.

The process of collecting and managing rental bonds typically involves holding the funds in a separate account or bond management platform. This account ensures that the bond money for rental property is safeguarded until the end of the tenancy. While traditional rental agreements might be printed on bond paper in some locations,  the specific requirement depends on whether you plan to register the agreement.

Using bond management platforms can streamline this process for both tenants and landlords. These platforms provide transparency and ease of access to information regarding the bond, making it simpler to handle the deposit and any potential claims or refunds.

Government Rental Bonds Online

In some regions, government rental bonds online programs exist to provide an additional layer of security for tenants and landlords. These programs are designed to offer government-backed rental bonds, often with reduced administrative fees and added protection.

Utilising government rental bonds online can provide several advantages, including greater financial security, reduced administrative burdens, and peace of mind for both tenants and landlords. To access these services, tenants and landlords can inquire with their local housing authorities or visit official government websites.

• Month-to-Month Lease (Short-Term): This agreement renews automatically each month unless either party gives notice to terminate. It provides flexibility but may have higher rent.

By Purpose

• Residential Lease: This is the most common type, used for renting houses, apartments, or other living spaces.
• Commercial Lease: This is used for renting commercial properties like offices, retail spaces, or warehouses.

By Ownership Transfer Option

• Rent-to-Own Agreement: This allows the tenant the option to purchase the property after a set rental period. There are two variations:
  • Lease Option Agreement: The tenant has the option to buy, but it’s not mandatory.
  • Lease-Purchase Agreement: The tenant is obligated to purchase the property at the end of the lease.

Rental Bond Assistance

Not all tenants can easily afford the upfront payment of a rental bond. For those in need of financial assistance, various options and resources are available. Some government programs or agencies offer rental bond assistance to eligible individuals or families.

These assistance programs can help tenants secure a rental property by providing financial support for the rental bond. Eligibility criteria and application processes may vary by location, so tenants should research available resources in their area.

Bond Paper Sample

The Importance of Rental Bond Receipts

Rental bond receipts play a crucial role in ensuring transparency and accountability in rental agreements. For tenants and landlords alike, these receipts serve as documented proof of the security deposit payment.

Rental bond receipts should include essential information such as the amount paid, the date of payment, the property address, and the names of both the tenant and the landlord. Having a well-documented receipt can help prevent disputes and misunderstandings regarding the bond’s amount or its return at the end of the tenancy.

Deposit Bonds for Rental Properties

Deposit bonds offer an alternative to traditional cash security deposits in rental agreements. Unlike cash deposits, deposit bonds are issued by insurance companies and act as a guarantee to the landlord.

Tenants can benefit from deposit bonds as they don’t require a large upfront cash payment. However, it’s essential to understand the potential drawbacks, such as the cost of purchasing the bond and the fact that tenants may still be responsible for any damage or unpaid rent.

Using Rental Bond Management Platforms

Managing rental bonds efficiently is crucial for both tenants and landlords. Fortunately, several rental bond management platforms are available online to streamline this process.

These platforms offer features such as secure deposit storage, automated notifications for rent payments, and easy tracking of bond-related transactions. Tenants can also explore tenancy agreements on such platforms, enabling them to create and manage comprehensive rental agreements, thus ensuring a smooth and organised rental experience.

Sample Rental Agreement Template

To help you get started with creating a rental agreement, we’ve provided a sample rental agreement template below. Please note that rental laws and regulations may vary by location, so it’s essential to customise this template according to your specific needs and consult local legal resources if necessary.

[Sample Rental Agreement Template]

[Your Name/Landlord’s Name], hereafter referred to as the “Landlord,” and [Tenant’s Name], hereafter referred to as the “Tenant,” hereby agree to the following terms and conditions for the rental of the property located at [Property Address]:

1. Rental Property Description:

Describe the property being rented, including the address and any specific details.

2. Rental Term:

Specify the start date and duration of the rental agreement.

3. Rent Payment:

State the monthly rent amount, due date, and preferred payment method.

4. Security Deposit:

Mention the amount of the security deposit, how it will be held, and conditions for its return.

5. Maintenance and Repairs:

Clarify responsibilities for property maintenance and repairs.

6. Termination of Agreement:

Outline the process for terminating the rental agreement, including notice periods.

7. Additional Terms:

Include any additional terms or rules specific to the rental property.

8. Signatures:

Allocate a section for both the landlord and tenant to affix their signatures and date the agreement.

Please note that this is a sample template and should be customised to adhere to local rental laws and regulations. Consult with legal professionals if you have any questions or concerns about your rental agreement.

Rent Agreement Stamp Paper

In India, the need for stamp paper on a rental agreement depends on whether you plan to register the agreement or not:

• Unregistered Agreement:  If your rental agreement is for less than 12 months, you can print it on a stamp paper with a minimum value, which is commonly Rs 100. However,  specific requirements can vary by state. The rent agreement stamp paper value is ₹100 
• Registered Agreement:  For agreements lasting 12 months or more,  it’s recommended to get the agreement registered at the Sub-Registrar’s office. The stamp duty for a registered agreement is based on the rent amount and agreement duration, not a flat fee.

Legal Considerations

Rental agreement bond papers are subject to legal regulations that vary by location. It’s essential to be aware of the legal aspects that govern rental bonds in your area. Local rental laws and regulations may dictate the maximum amount for security deposits, the timeline for returning deposits, and other crucial details.

To ensure compliance with the law, tenants and landlords should educate themselves about the specific regulations in their region. Legal resources and local housing authorities can provide valuable information and guidance regarding rental agreement bond papers. Additionally, it’s essential to be aware of common pitfalls and mistakes when creating rental agreements. For insights on what to avoid, check out our blog on “Mistakes to Avoid in Rental Agreement.“

How Can NoBroker Help?

In conclusion, rental agreement bond papers are indispensable tools for both tenants and landlords. They establish clear guidelines for managing security deposits, safeguarding financial interests, and ensuring a fair and transparent rental process. However, navigating the legal intricacies of rental agreements can be daunting, especially when considering local regulations and potential disputes.

That’s where NoBroker Legal Services comes to your assistance. Our team of experienced legal professionals is here to help you attain a rental agreement that protects your interests and complies with all relevant laws and regulations.

Don’t let legal uncertainties stand in your way. Contact NoBroker Legal Services today to get the expert assistance you need in crafting and managing your rental agreement. Finding your peace of mind is just one click away!

Frequently Asked Questions

Declaration Deed: A Detailed Look at the Deed of Declaration in India

Real Estate Investments generally involve a very high capital and it’s very important to do a thorough verification of the property before investing in it. It’s crucial to know important details like the size of the property, type of the property and other such details. This is where a declaration deed comes in very handy. Let’s take a look at how a Deed of Declaration of a property helps a buyer make the right choice in choosing a better property.

What is a Deed of Declaration?

A deed of Declaration is an official property document giving detailed information about real estate. From the type of land to the total area of construction, exact details are to be provided by the builder in the correct deed of declaration format. It is the responsibility of the builder to execute a detailed Declaration Deed. In some instances, a deed of declaration means a Deed of Trust as well. A Deed of Declaration by the builder should also contain information about the amenities on the property like a swimming pool or gymnasium. The deed declaration will also contain information such as the carpet area of the property, the total number of individual apartments constructed and the value of each apartment. . A Deed of Declaration for property is a legal document used in real estate matters, but it can serve two purposes depending on the context.

Why is the Deed of Declaration Important to Execute?

As discussed, a deed of declaration means an official document giving detailed information about a property. It is mandatory by law for the builder to file and execute a detailed declaration deed of the property. A declaration deed is important because:

• It gives detailed information about the size and type of property for a better investment. 
• Gives a clear indication of the right owner to avoid any dispute in ownership
• Provides in-depth details about the location, amenities and value of the property
• Defines the correct boundaries and area of the property.

These important use cases of a deed of declaration help a buyer make an informed choice and make better decisions. 

Things To Keep in Mind While Making a Declaration Deed

1. Be Certain 

Once executed, the deed will change the legal ownership of the property and it will transfer the legal ownership rights. It is a legal document and can be enforced at the court as an official proof of ownership. 

2. Attention to Detail

Provide the details properly. From the name and details of the witnesses to who pays the stamp duty, everything should be taken into consideration and should be accounted for. 

3. Taken Consent of all Parties

The true owners and registered owners should be present while the deed is executed and signed. If all parties are not present, the deed may be considered fraudulent 

4. Make Proper Registration

To avoid any discrepancies, always get your property registered and pay the necessary taxes. It acts as proof of ownership. 

Deed of Declaration of HUF

According to the Indian succession laws, a Hindu Undivided Family (HUF) consists of members and coparceners. A HUF is treated as a person under the income tax laws of the country. A HUF is formed when all members of a Hindu family are from the same lineage and have a common ancestor. Under the Indian Tax Laws, a HUF has many benefits. Forming and availing of these benefits are also easy. If you are a HUF, let’s take a look at the HUF deed of declaration format for KYC:

Deed of Declaration of HUF: Format

Deed of Declaration Maharashtra: Sample

Download link:

https://www.pkgoyalandassociates.com/forms/2447.pdf

Sales Deed Format Maharastra

What should you include in a Deed Declaration?

The registered deed of declaration is a crucial legal document that outlines the ownership details of a property. Understanding the declaration deed format is crucial for ensuring the document accurately reflects ownership rights in a property. According to official Indian reports, the deed declaration should include the following information: the names of the parties involved, the property’s legal description, the purchase price, the date of purchase, and any restrictions or easements affecting the property. In addition, the deed declaration should also include a clause indicating the type of ownership, such as joint tenancy, tenancy in common, or sole ownership. This clause should also specify the percentage of ownership of each party.

What should you do if the declaration deed is lost?

If a declaration deed is lost, the first step is to obtain a copy of the original document from the registrar’s office. To do this, one must file an application for a certified copy of the deed and pay the required fee. In addition, one must provide proof of ownership, such as the original sale deed or a property tax receipt. If the original deed was registered, a duplicate can be obtained from the registrar’s office by following the same procedure. It is crucial to act quickly in such situations and not delay the process of obtaining a duplicate deed, as it is an essential legal document that establishes ownership of the property.

Get the best legal experts for your unique property hurdles

The deed of declaration is a crucial property document that the builder must correctly execute with all the necessary details. It provides essential information for property evaluation and decision-making. This document offers intricate investment details to property buyers and helps resolve ownership disputes. For expert legal advice, NoBroker offers affordable consultations with top legal experts in the country, ensuring all your questions are answered. Comment below and we will reach out to you.

Frequently Asked Questions

Relinquishment Deeds: Format, Registration 2024

When it comes to transferring property rights to a nominee, a Relinquishment Deed is crucial, especially in cases where the owner passes away without leaving a will. Such a deed is specifically for inherited properties and can only be transferred to legal heirs like siblings, children, or parents. It’s advisable to enlist the expertise of a competent lawyer to ensure the deed’s validity and prevent potential challenges. The registration process takes place at the sub-registrar office, with fees including registration fees and stamp duty varying depending on the state or union territory.

What is the Meaning of a Relinquishment Deed?

A relinquishment deed refers to a legal document in which a property holder releases or transfers his or her legal right of property to someone else. In this, the legal right of property is given up by the owner to another person. Since it is a legal document, the property relinquishment deed needs to be carried out carefully and registered following the governing laws and the compliances. A good property lawyer and consultant are required for the proper execution of a relinquishment deed and compliance. 

To register a relinquishment deed, after drafting the deed, necessary documentation is required. The person giving up the legal rights to his or her property is referred to as the executant, and the person receiving the property is called a nominee. Both the executant and the nominee must be physically present at the registrar’s office to register a relinquishment deed. It is considered valid only when the recipient agrees to accept the rights of ownership of property.

When is a Relinquishment Deed Created? 

A relinquishment deed needs to be created when the owner of a property dies without making a will, and the legal heir of the property decides to give up the legal rights of the property to a co-sharer or a co-owner. It is important to note that a relinquishment deed cannot be registered in the name of any other third person. The person in whose name the deed is being done needs to have a share in the property. Only the inheritor can transfer the property.

Who Can Create a Relinquishment Deed?

A relinquishment deed can be created by a person who has a share in the inherited property. In other words, a co-sharer of the property can relinquish their right to the property in favour of another co-sharer of the property. This includes the person’s children, mother, father, sister, and brother. A property cannot be relinquished in a third person’s name.

Why is it Necessary to Register a Relinquishment Deed?

It is compulsory to register a relinquishment deed to make the transferring of rights of property valid legally. This is governed by Section 17 (1) b of the Registration Act, 1908. This act serves as a tool to validate the transfer of the right of immovable property to the other co-owner. This legalises the process of transfer of property.

Documents Required for Relinquishment Deed

When preparing a relinquishment deed, it’s essential to have the necessary documentation to ensure a smooth and legally binding process. The following documents are typically required:

• Identification Proof: Valid identification proof such as an Aadhar card, passport, or driver’s license of all parties involved in the relinquishment.
• Property Documents: Original property documents, including title deeds and any previous transfer deeds.
• No Objection Certificate (NOC): If applicable, a No Objection Certificate from other legal heirs or stakeholders indicating their consent to the relinquishment.
• Stamp Paper: Non-judicial stamp paper of appropriate value, as per the stamp duty regulations of the respective state or union territory.
• Affidavit: An affidavit affirming the voluntary nature of the relinquishment and stating that there are no pending legal disputes related to the property.
• Passport Size Photographs: Recent passport-size photographs of all parties involved in the relinquishment.
• Witnesses: The presence of two witnesses with their identification proofs for attesting the deed.

What is the Sample Format for the Relinquishment Deed?

The sample deed of relinquishment format is given below:

RELINQUISHMENT DEED

This deed of relinquishment draft is made and executed on this ___day of ________ by

________________, ______(relationship) of Late _________________ and _________________,

____________ of Late ___________________, residents of _________________________________ 

_________________________________________________________, hereinafter called the 

EXECUTANTS/RELEASORS

IN FAVOUR OF

________________, _______ (relationship) of Late ___________________ hereinafter called the 

Releasee.

Whereas Late ________________ was a subscriber under the National Pension System with 

PRAN ________________.

Whereas the said Late ____________ died intestate and without nominating anyone to receive 

the claim for withdrawal of accumulated pension wealth, leaving behind the following legal 

heirs:-

Sr no. / Name /Age/ Relationship / Address

1.

2.

3.

NOW THIS DEED WITNESSETH AS UNDER:

The Executants/Releasers out of natural love and affection and without any monetary 

consideration, hereby wish to release and relinquish their respective shares in the claim under 

National Pension System, in favour of _________________, _____ (relationship) of Late 

________________, and hereby affirm and declare that they and their legal heirs shall have no 

right, claim or interest in the said claim for withdrawal of accumulated pension wealth of Late 

________________ and same shall vest absolutely in the said _______________, 

__________(relationship) of Late ________________, the Releasee.

IN WITNESS WHEREOF the Executants/Releasers and the Releasee have signed this deed of

relinquishment on this day, month, and year first mentioned above in the presence of the 

following witnesses; –

(A- _________________) (B-__________________) (C-__________________)

(Executants/Releasers)

Witnesses:

Name/ Address/ Signature

1. Witness 1
2. Witness 2

How to Register a Relinquishment Deed?

First, a draft is made of the relinquishment deed on a stamp paper of Rs. 100. Be careful not to make any errors regarding details and spelling. Try to keep the language simple so that the deed is easily understood by the concerned parties. The deed will be registered in the sub-registrar office of the area in which the property is situated. All the concerned people need to be physically present to register the deed. Along with this, they must have all documentation prepared in advance before paying the registration fee. After the verification of the documents by the officials, the relinquishment deed can be collected in about a week. 

What is the Difference Between a Relinquishment Deed and a Gift Deed?

A relinquishment deed is done when an inherited property is being relinquished. In this case, the legal rights to the property are being relinquished, i.e., given up. Also, only a co-owner of the property can be the nominee. In some cases, compensation is also required. Whereas, on the other hand, in the case of a gift deed, the property doesn’t have to be an inherited property. As the name suggests, the property is being gifted from one person to another person. Any person can be the receiver of a gift deed. A gift deed doesn’t require any compensation. Read more about gift deeds from here.

Can a Relinquishment Deed be Challenged or Revoked?

Relinquishment deeds are not usually revoked. However, in some exceptional cases, the co-owner can revoke it. The cases include fraud by duping the co-owner use of force to make the agreement or misinterpretation of the documents by the person. If the other co-owner doesn’t agree to the cancellation of the deed, then the matter is resolved in civil court. It can be cancelled only within the first three years after the registration of the relinquishment deed.

It is essential to register a relinquishment deed because an unregistered deed is not considered valid. When it comes to legal matters and paperwork, you have to be especially careful. So, to be on the safe side, always try to hire a professional. When forming a relinquishment deed, an experienced lawyer and consultant should be hired to avoid any errors and mistakes in the registration process. You can comfortably avail of these services from NoBroker by clicking below. NoBroker Legal Services provides an array of services related to property and paperwork. Apart from this, you can get services like home loans, home services like cleaning and painting, interior design and more.

Frequently Asked Questions

Sale Deed: Your Guide to Property Ownership

Confused what is sale deed certificate?A sale deed is a vital legal document confirming property ownership transfer from seller to buyer, establishing proof of ownership. It’s executed after agreeing on sale terms and conditions. This document transfers property rights and must be checked for encumbrances.

What is a Sale Deed in India?

A contract that executes the sale and transfer of ownership of immovable property from seller to purchaser in exchange for a consideration. When a sale is carried out with an objective of laid down guidelines, which are to be followed while processing the sale, it is a document created to execute the final purchase. 

The meaning of a sale deed is a legal and main document, that acts as evidence, that is executed at the time of sale and transfer. When you buy or sell property, the transaction should be carried out and duly signed between and by both the parties i.e., Vendor and Purchaser. And it should be in the presence of at least two Witnesses. When executed, it should be registered under the Registration Act, 1908 within four months by the Sub Registrar. Thus, only with properly executed transactions, a sale can be completed.  

The document is drafted by a legal draftsman adhering to all principal terms and conditions mentioned under the Transfer of Property Act to acquire a perfect title to the property that is being purchased as per the value prescribed by the stamp duty. Every state is accustomed to a predetermined value and is paid by the Buyer.

The seller transfers the ownership to the buyer through a sale deed. The buyer exercises the following rights; when rights are transferred: –

• Right to Sell
• Right to Use
• Right to Lease or Mortgage

Advantages of a Sale Deed

It is an important instrument that allows you to carry out the sale of an immovable asset, that transfers rights from one person to another is a lifetime. One cannot claim rights to any property without a sale deed.

The benefits of the Sale Deed document are as follows:

• It is a legal document that is enforceable by law.
• It allows Sale transactions to be carried out in a stable and comfortable manner.
• It protects the rights of both parties involved in the contract.
• It mentions the rights and duties of the Purchaser and Vendor.
• It clearly defines and describes the property.
• A well-drafted deed can avoid ambiguity and minimise risks.
• The whole process of the sale is now stamped and registered.

What Should a Sale Deed Include?

The final deed should include these details:

• Parties Descriptions: Name particulars, complete address, contact number, age and occupation of both, the buyers and sellers.
• Property Description: Identity number, exact location details, property dimensions, and construction details, if any.
• Sale Agreement: An agreement is carried out mutually under the terms so that it won’t affect the rights of either party. And is executed before the sale deed.
• Clause: This states a declaration from the seller that the property being transferred is free from every encumbrance, litigation, and charge. The seller indemnifies the buyer of any pending charges.
• Pending Loan: The seller should settle a pending loan, if any taken with the concerned property as a mortgage, before proceeding with the sale.  
• Right to Examine: The buyer can examine the documents related to the property before carrying out registration.
• Consideration: The price at which the transfer deal is finalized. 
• Advance Payment and Mode of Payment: Should also mention details about the advance amount paid, if any and shall include receipt of sale transactions too. The price details should be mentioned in words and figures. The parties should decide the payment mode and other details.  
• Passing of Title: The property title passes to the buyer. Once the title has been transferred, all rights are vested with the buyer.  
• Possession by the Buyer: The Conveyance Deed should clearly mention the date of delivery of property to the buyer.

The Process of Getting a Sale Deed

A Sale Deed is to be registered compulsorily as per the Registration Act,1908. To get a sale deed, the following process is involved: – 

• Process 1 – A lawyer should be present to carry out a transaction and a detailed analysis 
• Process 2 – Proper information to be mentioned wherever necessary 
• Process 3 – After all the information has been collected, the Lawyer will start working on your document-related matters. 
• Process 4 – within a few days, you would get a draft from your lawyer 
• Process 5 – evaluate and examine all the details provided. If any changes are to be done, then do inform the alterations to your lawyer.

Suggested Read: Sales Deed Vs. Sale Agreement, What Do You Need?

Sale Agreement Format

Land Sale Deed Format

THIS DEED OF SALE is made at ____ on this the______day of_____2022.

BY AND BETWEEN _____, etc., (hereinafter called “the seller”) which expression shall unless repugnant to the context shall include its successors, legal representatives, assigns of the ONE PART 

AND ________, etc., (hereinafter called “the buyer”) which expression shall unless repugnant to the context shall include its successors, legal representatives, assigns of the OTHER PART. 

Now Therefore It Is Hereby Agreed by and Between the Parties HereTo as Follows: 

1. In consideration of the sum of Rs___________paid by the buyer to the seller on the_________day of_________(the receipt of which the seller hereby acknowledges) the seller as owner hereby transfers to the buyer by way of sale ALL that pucca house standing on the land measuring ___ meters by ____ meters fully described in the schedule hereto annexed and thereon shown with its boundaries coloured red (hereinafter referred to as “Premises”) TO HOLD the same to the buyer as absolute owner.

2. The seller hereby covenants with the buyer as follows: – 

(a) The said Premises shall be quietly entered into and upon and held and enjoyed and the rents and profits received therefrom by the buyer without any interruption or disturbance by the seller or any person claiming through or under him and without any lawful disturbance or interruption by any other person whomsoever; 

(b) The seller will at the cost of the person requiring the same, execute and do every such assurance or thing necessary for further more perfectly assuring the said premises to the buyer, as may reasonably be required; 

(c) The interest hereby transferred subsists and the seller has the power to sell the same; 

(d) The property hereby sold is free from all encumbrances, charges, mortgages, liens, prior agreement to sell, court proceedings, gifts, of any nature whatsoever.

(e) That the construction existing on the said Premises is in accordance with the sanctioned plan. 

3. If any of the foregoing including the representations and warranties are found to be false in any manner and/or if the buyer is deprived of the said Premises at any time, in future after the execution of this Sale Deed in full or in part thereof, owing to the above reason or reasons whatsoever in respect of the said Premises, the Seller hereby undertakes that he will entirely remain liable and responsible to indemnify the buyer for the same in all manners, including but not limited by all his moveable and immoveable properties and all other assets.  

4. That the Seller has delivered the peaceful physical vacant possession of the said Premises under sale along with all its rights of ownership and also delivered all the previous original documents of the said Premises to the buyer at the time of execution and registration of this Sale Deed. 

5. That the buyer can get the said Premises under sale mutated in its own name and/or any other concerned authority by presenting this Sale Deed or its true copy. 

6. That from the date of execution of this Sale Deed the buyer becomes the sole and absolute owner of the said Premises under sale and shall be at full liberty to use, enjoy and utilize the said Premises under sale and also have right, power, absolute authority and be fully competent to sell or dispose of the same to anyone in any manner as he may like. 

7. That after the execution of this Sale Deed neither the buyer nor his legal heirs, may raise any objection or create any charge or demand any share in the said Premises under sale here-after. 

In Witness Where of the parties hereto have signed this Deed of Sale on the date mentioned against their respective signatures. 

Witness Vendor

Witness Purchaser

The schedule herein referred to 

(Description of the property)

What is the Sale Deed of Flat Format?

This DEED OF SALE is made and executed at ______ on this _______ day of ______________, Two Thousand _______

BETWEEN 

………., PAN NUMBER……, EPIC/Passport /OCI/CIO/PIO No………., Aadhar No………..  son / wife / daughter of    ……….  residing at …………by faith……………, by Occupation …………. , by Nationality………………., 

Herein after referred to and called as the “OWNER(S)/ VENDOR(S)”

AND

…………..…PAN-………, having place of business at ………, represented by its Partner(s) ……………….son / wife / daughter of ……….,  residing at ……….  by faith

….., by Occupation ….., by Nationality  ….. ,  hereinafter  referred to and called as the ‘DEVELOPER ( s) ’

    AND

………. PAN NUMBER, EPIC/Passport /OCI/CIO/PIO No………., Aadhar No………..   ………..  son / wife  / daughter of    ……….  residing at ……………..by faith…………… , by Occupation …………. , by Nationality………………., 

Herein after referred to and called as the “CONFIRMING PARTY (IES) ”

AND

………. PAN No……., EPIC/Passport /OCI/CIO/PIO No………., Aadhar No………..    son/ wife/ daughter of    ………. residing at …………  by faith………, by Occupation …………., by Nationality………………., hereinafter referred to and called as the “PURCHASER (S)

(The Vendors / Purchaser(s) is/are being represented by his/her/their Constituted Attorney (s)…..  PAN No……, EPIC/Passport /OCI/CIO/PIO No………., Aadhar No……..   son/wife/daughter of ……, residing at ………., by faith ………., by Occupation ………., by Nationality ………., by Constituted General/Special Power of Attorney dated ………., /by Authenticated General/Special Power of Attorney being No …dated ………. of the office of the……..  ) 

 [for and on his/her behalf the representative/nominee/guardian/ward (as the case may be) (with all additions), Order or Permission No. ………………..  Date …………………. (as the case may be)] / [Name of the Government / Organisation / Institution / Company / Firm / Trust / Society (as the case may be) with the place of its headquarters and for and on its behalf the / its …………………………. (Designation of the post held), …………………………………… (Name of the person holding the post 

or having the designation with all additions)]

The expression of the Vendor & Purchaser shall mean and include the parties itself, their respective legal heirs, executors, successors, administrators, legal representatives, and assigns / nominees.

Whereas the Vendor for his bonafide needs and legal requirements, in his sound and disposing mind without any pressure, force, compulsion or coercion has agreed to sell and transfer the said property unto the Purchaser for a consideration value of Rs …………

For which the Purchaser after scrutinising the status of the property and also being satisfied regarding the title of the Vendor has agreed to purchase the same against the said consideration.

NOW THIS DEED WITNESSETH AS UNDER: –

1. That in consideration of Rs ………….… the entire amount has been received by the Vendor from the Purchaser prior to the execution of this sale deed, the receipt of which is hereby admitted and acknowledged by the Vendor.
2. That the Vendor hereby sells, conveys, and assigns the property absolutely and forever with all rights, title and interest of the same, unto the Purchaser who shall hereafter be the absolute owner of the same and enjoy all rights of ownership etc.
3. That the actual physical possession of the said property has been handed over by the Vendor to the Purchaser who is in possession of the same at the time of registration of this sale deed. 
4. That all taxes, charges, dues, demands, arrears, electricity charges, water charges, outstanding bills, house tax, development charges etc. if any, in respect of the said property for the period prior to the date of execution of this sale deed shall be paid and borne by the Vendor and thereafter the same shall be paid and borne by the Purchaser. 
5. That the Vendor hereby agrees and assures the Purchaser to help and assist him in getting the property transferred/mutated in the relevant department and any other concerned department and/or the Purchaser shall have full right to get the property transferred/ mutated in his/her own name from the concerned department on the basis of this Sale Deed even in the absence of the Vendor. 
6.  That all right and easements attached with the said property have also been conveyed and transferred with the said property, unto the Purchaser. 
7. That the Vendor has assured and delivered to the Purchaser that the said property under sale is free from all sorts of encumbrances such as Sale, Mortgage, Gift, Transfer, decree, litigation, lease, acquisition/ notification etc. and there is no defect in the title of the Vendor and if it is proved otherwise at any time and the Purchaser suffers any loss, then the Vendor shall be fully liable and responsible for the same and the Purchaser shall be entitled to recover all his/her losses from the
   Vendor.
8. That the Purchaser shall have full right to apply and get the Water, Electric and sewerage connection regarding the said property from the concerned authorities and also to get the existing name changed in his/her own name from the department concerned without any written consent of the Vendor.
9. That the Vendor has delivered the previous title documents relating to the said property.
10. That the Vendor hereby declares and assures to the Purchaser that the
    said property has not been acquired by the Govt. and there is no
    injunction or attachment order of any Court or Department.
11.  That the market value of the property is Rs……………………. All facts
    relating to its market value, consideration, and charge ability to stamp
    duty and transfer duty have been fully given in the sale deed and
    mentioned Schedule B of this sale deed.
12.  Any other points to specify

THE SCHEDULE “A”

              (DESCRIPTION OF THE ENTIRE PROPERTY)

ALL THAT piece and parcel of ………………… land measuring about ………… Cottahs ……………. Chittacks …………. sq. ft. more or less land, along with the Complex named ……………having   G + ……………Building lying and situated at Mouza-…………., Pargana–………………., J.L. No…………., Re Su No.-…………………  Touzi No…………comprising in R.S. Dag No.-……………………, under R.S. Khatian No.-………………, corresponding to LR Plot No………….   and LR Khatian No…………, having Municipal Holding No……………………, Road Name ………………, being Premises No.-……………., PIN-………………, under Ward No.-……………… within the limits of ………………. Municipality / Municipal Corporation, within the office of …………………… P.S.-………………  District-…………, and butted and bounded by: –

ON THE NORTH BY: –

ON THE SOUTH BY: – 

ON THE EAST BY: – 

ON THE WEST BY: –

THE SCHEDULE” B” ABOVE REFERRED TO –

[Description of the Flat/Unit]

ALL THAT piece and parcel of a demarcated self-contained residential/semi-commercial /office / commercial Flat/ covered garage / open garage being No.…………. on the ………… Floor, in Block-…………., having a measurement of ……………… sq. ft. Super built-up area more or less comprising of ……………………………, with ……. Flooring, from Developer’s Allocation within the G Plus………. Building, of age years ……., the property being tenanted / not tenanted, the property being litigated with pending Title suit No ……………for year ……. lying in The Court of ………/ not litigated, within the Complex named ………………. together with an undivided proportionate share of underneath land and other common amenities and facilities including easement and quasi-easement rights along with restrictions and reservations as stated aforesaid as attached with the Multi-storied Building within the said Complex at Municipal Holding No.-…………., Road, …………………. Being Premises No.- …………., Road………, Pin ………, under Ward No.-………., within the …………… Municipality / Municipal Corporation, under the office of ………., under P.S.- ………………., District-…………… fully described “A” SCHEDULE herein above written.

Annexed Plan marked with Red Border will be treated as part and parcel of this Deed.   

Upload Sketch Map

– THE SCHEDULE “C” ABOVE REFERRED TO –

[The Common portions]

1. Entrance and existing internal roads, and footpath.

2. Common durwans / caretaker room, Caretaker Room, Security Camera Room, (if any).

3. Boundary walls and main gates.

4. Drainage and sewerage lines and other installations for the same (except only those as are installed within the exclusive are of any unit and/or exclusively for its use).

5. Staircases lobbies on all the floors and vacant area of the ultimate roof of the proposed building (Roof right will not be available for Garage, Shop and Godown owners, but rights attached to the Ground Floor will be available only).

6. Tube well and water supply system, water pumps, water pump rooms, overhead tank, septic tank together with all common plumbing installation for carriage of water (save only those as are

exclusively within for the use of any unit.), community Hall and two-wheeler parking space

7. Lighting fixtures and fittings in common area from common use.

In Witness Whereof this sale and purchase agreement is executed at——- on the day, month and year above written.

Vendor

Vendee

Witnesses:

1. 

2.

What is the Sale Deed of Property Format?

Sale and Purchase Agreement

This sale and purchase agreement is executed at —– on this —— day by Mr. / Ms. ————— son/ daughter of—————————- aged about ———————— resident of —————————————–, hereinafter called the Vendor,

IN FAVOUR OF
Mr. / Ms. ———————————- son/ daughter of—————————- aged about ———————— resident of —————————————–, hereinafter called the Vendee.

The expression Vendor and Vendee shall mean and include their heirs, successors, executors, administrators and assigns of the respective parties.

Whereas the Vendor is the Bonafide owner of the property described below with all rights and title and has the absolute right to sale, alienate the aforesaid property to the Vendee.

Description of the property:

i) Plot No. —- and address

ii) Area

iii) Floors

iv) Location

v) Facilities and amenities

Whereas the Vendor has agreed to sale the aforesaid property to the vendee for her Bonafide needs and requirements with fittings and fixtures and the Vendee has agreed to purchase the same for a sum of Rs. ————————.

NOW THIS SALE AND PURCHASE AGREEMENT WITNESSETH AS UNDER
That the consideration amount of mentioned above stands already paid to the vendor as full and final settlement as stated above prior to execution of this sale and purchase agreement, vendor does hereby acknowledge the receipt of the same and the vendor do hereby sell, conveyed, transfer and assigns all his rights, title, and interest of the above said property under sale unto the vendee.

1. That the vendor hereby assures and declared that he is the conveyance deed holder and is the sole, absolute, exclusive and rightful owner of the aforesaid property under sale along with freehold rights of the land underneath and he is fully competent and has full rights and power to sale and transfer the same.

2. The vendor hereby absolutely assigns, conveys and transfers to the Vendee all her rights of ownership, titles and all interests in the above-mentioned property under sale hereby conveyed under this sale and purchase agreement.

3. The vacant and peaceful possession of the above-mentioned property under sale has already been given to the Vendee by the Vendor, who has occupied the same.

4. The Vendee shall hereinafter hold use, enjoy as he/she likes and to sell, mortgage, lien, let-out or make additions/alterations or renovations in the same as her own property without any hindrance, claim or demand whatsoever from the vendor.

5. That the Vendor hereby assures the vendee and declares that he is the sole, absolute, exclusive and rightful owner of the above-mentioned property under sale, and is fully competent and has full power, absolute authority and unrestricted rights to sell and transfer the same, and the same is free from all sorts of encumbrances, burden, sale, mortgage, gift, lien, decree, charges, court injunction orders, stay orders, liability, transfer, attachment, litigation, legal flaws, dispute, notices, surety, security, notifications, acquisition etc. and there is no legal defect in the title of the Vendor. If it is proved otherwise, the Vendor and the property both moveable and immoveable shall be liable to indemnify the vendee in full or part to the extent of loss sustained by the vendee at the prevalent market value of the said property at that time with all cost, expenses and damages, etc. and the vendee shall have full rights to recover the same, along with the cost and expenses of additions, alterations, renovations, modifications, etc. through the court of law.

6. That the Vendee can get the above-mentioned property under sale mutated and transferred in his/ her own name on the basis of this sale and purchase agreement with the concerned government department.

7. That all dues such as house tax, electric and water bills, etc. outstanding, if any, in respect of the above-mentioned property under sale, shall be paid and borne by the Vendor up to the date of execution/registration of this sale and purchase agreement and later on by the Vendee.

8. The Vendee has spent all costs of stamp papers and registration fees, etc. for the present sale and purchase agreement.

9. The Vendor has handed over all the original documents establishing the chain of title of the said property.

10. That the Vendee is fully empowered to transfer or get the fresh electric and water connections in respect of the above-mentioned property under sale in his/her own name after the execution/registration of this sale deed from the respective departments at his/her own cost and expenses.

12. The Vendee shall maintain the above-mentioned property under sale at her own cost and expenses.

14. That the Vendor, her heirs, successors, executors, administrators, legal representatives, and assignees have been left with no rights, titles or interests in the said property and the Vendee has become its absolute owner.

In Witness Whereof this sale and purchase agreement is executed at——- on the day, month and year above written.

Vendor

Vendee

Witnesses:

1. 

2.

Sale Deed Format for Resale Flat

Flats for resale follow the same sale deed formats as mentioned. All that is required is the recent history of possession of the flat.

What is Sale Deed Number? 

After registration is completed, stamp duty and registration charges are paid. The payment slip mentions the number and on each page of the sale deed, there is a stamp by a government official. On the top right corner of every page, you can find your sale deed number.

How To Find the Sale Deed Number?

A property sale deed is necessary since it is a legal document drawn on non-judicial stamp paper according to the state’s stamp duty value. This document serves as proof of a property sale or purchase between two parties in front of two adult witnesses. A description of the property is included in a sale deed.

The sale deed of land also includes-

• Details of the buyer and seller
• The size of the property, the building features, the specific address, and the surrounding area are all important factors to consider.
• The whole amount of the sale, including the amount paid in advance and the method of payment.
• Delivery date – Possession of property
• The clause of indemnity

The sale deed number is generally written in the following format:

• Document Number / Year / Sub Registrar Office initials
• For instance: 535/2021/HVL1
• Here, HVL1 is HAVELI sub-registrar number 1.

In India, a property transaction without an original sale deed sample is illegal, so make sure you have one recorded and registered when you buy the property. If you want to check the sale deed number, take a close look at your paperwork, and use the previous example to locate it.

Registration of a Sale Deed

The property papers are to be kept with the Sub-Registrar to confirm the deal is being closed. The registration includes the following: – 

• Value of the property
• Stamp duty assessed as per the market rate and actual price is to be considered
• Value of non-judicial stamp paper
• Deed to be executed on stamp paper
• Both the parties should execute the document in the presence of two witnesses
• Finally, it should be registered with the Sub-Registrar

What Are the Various Documents Required for Property Registration?

The Sale Deed documents required for registration are: – 

• Title Deed Draft
• Extract
• Sharing Agreement between owner and builder, if any
• Power of Attorney, if any
• Blueprint by the officials
• Allotment Letter from the Housing Board
• Original Property Papers with Bank, if any loan is taken
• Sale Agreement
• A copy of existing agreements, if any resale has taken place
• No objection Certificate, if any resale
• Property Tax Receipts
• Encumbrance Certificate
• Completion Certificate
• ID proof of both parties including witnesses
• Passport-size photographs
• Stamp Duty Receipt
• Possession Letter
• Occupancy Certificate

What does a Sale Deed imply?

According to the Registration Act of 1908, a sale deed is registered. To sign the sale deed and complete the transaction, both parties must be physically present in the sub-office registrars with two witnesses and all necessary paperwork.

When the sale deed is signed, it is assumed that the seller has given the buyer an irrevocable title to the property. It also signifies that they have abided by the terms and received full payment of the agreed-upon compensation. The legal ownership of the property is with the buyer.

How to Get a Certified Copy of a Lost Sale Deed?

Losing an important document is not a good thing, but mistakes happen, natural disasters happen, and people move places and misplace vital documents all the time. The importance of a sale deed as a vital document has already been established, but what is the process to get a certified sale deed copy? Simply follow the steps below:

• File a complaint to the local police as an FIR or first information report
• Only the owner can file the FIR by registering the mobile number for the status to be tracked online later
• Save a copy of the FIR for future prospective buyers or banks in case it is necessary
• Visit the local sub-registrar office or SRO and fill and submit an application to get a certified sale deed copy, and you will also be asked to publish a national and regional ad in the newspaper regarding the loss of property documents
• Keep a copy of both the complaint and clipping and wait for 2 to 4 weeks to see if your property papers turn up, or else, get an affidavit prepared on stamp paper stating the details of the lost deed, sign and notarise from a public notary
• Attach the FIR document along with the ad and FIR to the SRO with a prescribed fee.
• After verifying the SRO will legally issue a certified copy of the sale deed, as a substitute for the original

When Things Go Sour: How to Cancel a Sale Deed in India

A sale deed is a legal document that serves as evidence of the transfer of ownership of a property from the seller to the buyer. However, sometimes the sale deed needs to be cancelled due to various reasons. In this section, we will explore what the cancellation of a sale deed means and what are the steps involved.

Reasons For Cancellation Of Sale Deed:

• Breach of contract by either party
• Non-payment of the agreed-upon sale amount
• Dispute over the ownership of the property
• Fraudulent activity on the part of the seller

Steps Involved In The Cancellation Of A Sale Deed:

Draft a cancellation deed: A cancellation deed is a legal document that cancels the original sale deed. It should contain all the details of the original sale deed, the reason for cancellation, and the consent of both parties.

Execution of the cancellation deed: The cancellation deed should be executed on non-judicial stamp paper of appropriate value and registered at the Sub-Registrar’s office.

Payment of stamp duty and registration fees: The stamp duty and registration fees are based on the market value of the property and vary from state to state. NoBroker’s legal services can help you determine the applicable stamp duty and registration fees.

Handing over the possession of the property: Once the cancellation deed is executed and registered, the possession of the property should be handed over to the seller.

Things To Keep in Mind Before Executing a Sale Deed

• Do not use a copy-paste format for the deed. Get assistance as it is much harder to get the papers corrected.
• Correct information about the buyer and seller
• Connect it to the Agreement Sale
• A proper description of the property
• Absolute clear ownership and titles
• Clear mode of transaction and history of payments + future payment plans.
• Pass ownership title to the buyer
• Indemnification
• Delivery of old documents
• Witnesses

How Is a Sale Deed Different from a Sale Agreement?

The formalisation of property sales takes place in stages. The agreement to sell, agreement to sale, agreement for sale, or sale agreement is one of the first agreements that is signed to give legal status to an agreement between a buyer and a seller. The sale deed is the next document that is prepared to complete the transfer of the property title to the new owner. The deed of sale, or conveyance deed, is another name for this document.

Sale Deed	Sale Agreement
A sale deed is a legal document that documents the transfer of property ownership.	A sale agreement guarantees the transfer of property ownership in the future.
A sale deed means – The property’s rights and interests are transferred to the new owner through a sale document.	A sale agreement grants the buyer the right to purchase the property in question if specific requirements are met.
The sale deed contains information on both parties (buyer and seller), including their ages, addresses, and other pertinent information.	The terms and conditions under which the property will be transferred are specified in the sale agreement.
To complete a sale deed, the buyer must pay stamp duty and a registration fee.	The sale agreement comes before the sale deed, which is signed and executed on non-judicial stamp paper by both the seller and the buyer.

Is Sale Deed a Valid Document?

A Sale Deed is a valid document that mentions details about the property and the transaction that took place. A written agreement that involves the transfer of ownership.  It is also known as an absolute sale deed in places, as an absolute sale deed meaning in English denotes the complete authority and ownership of the property as well as the details that led to the sale and change of ownership taking place.

This comprehensive information provides insights into the significance of the sale deed. Additionally, NoBroker offers extensive support for property-related documentation, including property title verification, sale deed, agreement drafting, and registration. Our services are facilitated by expert lawyers, ensuring the creation of clear and comprehensive sale deeds and agreements. NoBroker also provides dedicated managerial assistance for prompt approvals, effectively eliminating the need for lengthy queues and simplifying the process. We encourage you to take advantage of our services by clicking the link below, offering competitive pricing and convenient delivery.

Frequently Asked Questions

Cancellation of Sale Deed: How It Works?

Real estate transactions can run into legal issues sometimes after registration. A key concern involves seeking cancellation of the sale deed under valid reasons like fraud. While this process aims to undo wrongs, it must comply with set procedures. This blog demystifies various aspects of cancelling a registered property sale in India. This blog will answer the question, “Can the sale deed be cancelled?”. It examines grounds, limitation timelines, authority approvals required and more. Knowing your rights and obligations upfront helps. Read on to understand this complex area of property law better.

Critical Components of a Sale Deed

A sale deed is a legal document used to transfer a property’s ownership from the seller to the buyer. It contains essential details about the property transaction that legally binds the sale. Here are some of the critical components that are typically present in a sale deed:

• Date – The sale deed will mention the date the property is being transferred. This helps determine the legal ownership timeline.
• Names of parties involved – The names of the seller and buyer are clearly stated. It also lists their addresses and identification details, like their father’s name.
• Property Details – Here, the address of the sold property is given. It also describes the boundaries, area and any common areas. Features like constructed area and number of floors are added.
• Consideration amount records the total sale value or price the buyer has agreed to pay for the property. Sometimes, only a part of it is received upfront, with the balance as instalments.
• Payment terms – If the total amount has yet to be paid in advance, the deed specifies the payment terms like amount, due date and interest payable on delays. It safeguards the seller legally.
• Rights and liabilities – The deed clarifies what rights over the property are being transferred and any ongoing liabilities the buyer accepts. It could include responsibilities like maintenance.
• Stamp duty – As per state law, the required stamp duty is paid for legally registering the document. The sale must be registered.
• Signatures – Both seller and buyer append their signatures before witnesses and registration is done with the sub-registrar office.

As per state laws, these core details are needed to make the sale deed a necessary legal proof of property sale and ownership transfer.

Grounds for Cancellation of Sale Deed

There can be several legitimate reasons for a sale deed to be cancelled after its initial registration. Some of the common grounds include:

• Fraud – If the seller has tampered with important property details or knowingly withheld crucial information to induce the sale, the buyer can cite fraud.
• Misrepresentation – Any misleading claims made about the property condition, documents or legal status can allow cancellation on the grounds of misrepresentation.
• Mistake – Cases of mistaken identity of property, non-disclosure of encumbrances or incorrect measurement documentation due to inadvertent errors provide scope to cancel the registration.
• Non-fulfilment of obligations – Failure of the seller or buyer to honor financial or other commitments made in the deed, like regular payments, timely possession or standard area maintenance, can lead to cancellation.
• Legal defects – Issues like a cloud over the seller’s ownership title, illegal construction or lack of proper procedure followed during transfer can affect the legality of the deed.
• Force or undue influence – If consent was obtained from anyone under threat or unfair means like pressure, harassment or fraud, the deed may not stand in court.

The grounds above need to be proved suitably, like through document evidence or witness accounts, for the competent civil court to examine and declare the sale deed legally nullified or cancelled to protect the aggrieved party’s interests.

How to File a Suit for Cancellation of Sale Deed?

To get a sale deed cancelled legally, the dissatisfied party needs to file an appropriate civil suit before the relevant court of jurisdiction. It is typically a court of civil or district judge level, depending on the property value. In the suit petition, the plaintiff clearly states their grounds for seeking cancellation, such as fraud, misrepresentation, etc. All relevant documents and evidence are submitted. The court then issues a notice to the defendant for a written statement on the claims. If required, witnesses may be summoned at a later stage for cross-examination.

Both parties present their arguments through lawyers during the hearings. The onus remains on the plaintiff to conclusively prove their case for cancellation. If the court is convinced that the grounds are bona fide as per law, an appropriate order declaring the sale deed ‘null and void’ is passed. A fresh registration is cancelled. Otherwise, the suit is dismissed if the allegations seem fabricated. The property ownership remains with the existing owner.

Procedure for Cancellation of Registered Sale Deed

Cancelling a sale deed is a complex legal process that needs to be followed carefully. The procedure for cancellation of the registered sale deed should be followed- 

• The first step is for the person asking for cancellation to file a case in civil court. They will have to pay a fee based on the property value.
• Both sides will get a chance to explain their side to the judge. The court will review documents and decide if there is a valid reason for cancellation, like fraud or mistake. If correct, the court gives an order allowing cancellation.
• A copy of this court order goes to the registration office where the original sale deed was registered. Here, an official will note that the deed is cancelled in their records. They write the court order number and date. The old deed pages get stamped as “Cancelled”.
• It updates all property records to show the changed ownership. Municipal records listing property owners are also revised. Other government agencies handling taxes or services need the new information.
• Once registration is done, the earlier sale is treated as invalid under the law. Before the cancelled sale, the owners can sign a fresh deed to legally transfer ownership back. Both sides must agree on this.
• If cancellation happens for non-payment, the court may order the party at fault to pay dues and compensation. Every benefit received due to the invalid deed must be reversed or paid for.

The detailed process exists to protect all legal rights and make official records match the court’s decision. It aims to restore the original intent and status as per justice delivered. Proper documentation is crucial to avoid future disputes.

Court Fees for Cancellation of Sale Deed

A court fee must be paid upfront to file for a sale deed cancellation. It depends on the property value stated in the deed. The minimum fixed court fee is Rs. 19.50 under Article 17(iii) of the Second Schedule of the Act. Documents showing property value help decide the fee amount. After checking papers, the court’s registry collects the fee. Only then is the cancellation case accepted and given a number. Without full payment, no hearing will be listed. Later, if the petition succeeds, the court can order the other side to pay the fee. However, the petitioner must first pay to access the legal process to try cancelling the property sale deed.

Limitation for Cancellation of Sale Deed

There is a time limit set for requesting cancellation of a sale deed. Per the Specific Relief Act 1963, a petition can be filed within three years only from the date the cancellation deed is registered. This timeframe regarding the limitation for cancellation of the sale deed is fixed by law. If more than three years have passed since registration, one cannot legally apply for cancellation. The court will reject such a late case immediately. The limitation period aims to provide all involved with a definite closure and certainty over property ownership. In cases of fraud or filing a lawsuit, as soon as fraud is discovered, the starting point is from awareness, not the deed registration date. Similarly, delay may be excused if any party could prove the other forcibly prevented them from approaching court for many years used.

Cancellation of a sale deed is a legal severe step with the involvement of courts and registration authorities. Utmost care is needed regarding compliance of processes and assembling documentation to convince the bench. Seeking expert advice from reliable sources like attorneys and NoBroker is highly recommended before filing any petition. NoBroker aims to educate all users transacting on its platform regarding property ownership nuances. Its legal assistance shields members from trouble. 

If you need counselling on the cancellation of sale deeds or other real estate matters, NoBroker experts are available to help navigate this intricate domain of law.

Frequently Asked Questions

Will Deed: Meaning, Types, Format and More

A will deed gives you authority over your possessions after death. It lets you clearly and precisely choose who gets your property, goods, and stuff. We will discuss Will Deed in this blog to help you protect your family from strife and uncertainty. Read on to know what is will deed and how to create one! 

What is a Will Deed?

A will deed is a legal document or terminology which is coined by joining two terms, will and deed. Let’s see what these terms mean:

• Will: A legal document that specifies how a person’s assets and property will be distributed after their death. It outlines who will inherit specific belongings and appoints an executor to manage the estate. Wills are not enforceable until the person who wrote them (the testator) dies.
• Deed: A legal document that transfers ownership of a specific asset, such as real estate, from one person (the grantor) to another (the grantee). Deeds take effect immediately upon being signed and registered.

What is the Meaning of a Will Deed?

The grantor and grantee transfer real estate (land and everything permanently related) in a property deed. Proof of property ownership is needed.

Here are some property deed basics to help you understand the will deed meaning:

What it contains:

• Names of grantor and grantee: Identifies the party transferring ownership and the party receiving it.
• Property Description: Provides a detailed description of the property, including address, legal boundaries, acreage, and any permanent fixtures.
• Transfer type: Specifies the type of transfer, such as purchase, gift, or inheritance.
• Covenants may include restrictions or assurances regarding the property’s use or development.
• Signatures and date: Requires signatures of both parties and the date of transfer to be legally valid.

Purpose of Will Deed

Creating a will help you keep your loved ones safe and provide legal protection against claims. Some of the benefits include: 

• Prevent disputes and legal battles: A clear will deed minimises the risk of misunderstandings and disagreements among heirs, ensuring a smooth and peaceful transition of your estate.
• Express your specific wishes: You can designate beneficiaries, allocate assets, and even name guardians for minor children or dependants.
• Appoint trusted individuals: You can choose an executor, a responsible person tasked with managing your estate and fulfilling the terms of your will.
• Offer peace of mind: Knowing your wishes are documented and legally binding provides you and your loved ones with security and comfort.

Types of Will Deed

Will deeds are of different types and created for different purposes. Here are different types of Will Deed:

• Warranty deed: Offers the strongest guarantee of title from the grantor, protecting the grantee from any hidden claims or defects.
• Quitclaim deed: Transfers ownership without guarantees or warranties, often used when gifting property or settling minor discrepancies.
• Special warranty deed: Offers some assurance against the grantor’s actions after the transfer but not against prior claims or defects.

What is Will in Property Documentation?

The term ‘will deed’ is not the most common terminology used in legal contexts. While it might be used colloquially in some regions, ‘will’ is a more precise term.

So, what is will in property? It’s a legal document that states how to divide your assets and property after death. You may pick who inherits your possessions, including:

• Real estate: houses, apartments, land, etc.
• Personal property: cars, furniture, jewellery, collectables, etc.
• Financial assets: cash, bank accounts, investments, etc.
• Digital assets: online accounts, cryptocurrency, etc.

Having a will helps to:

• Avoid intestacy: If you die without a will, your assets will be distributed according to the laws of your state, which may not be what you intended.
• Minimise conflict: A clear will can help to prevent disputes and arguments among your heirs about who gets what.
• Provide for loved ones: You can use your will to leave specific gifts to certain people, such as a family heirloom to a grandchild or a donation to a favourite charity.
• Appoint a guardian: If you have minor children, you can use your will to appoint a guardian to care for them after your death.

Wills are only effective after death and may be modified or repealed.

Additional will considerations:

• Formalities: Legal advice is advised, but most states don’t need lawyer-written wills. You must sign and have two witnesses witness the will.
• Updates: It’s a good idea to review and update your will periodically, especially if you experience significant life changes, such as getting married, having children, or going through a divorce.

Will Draft Format

Here is a sample will deed format:

[Your Full Name]

I, [Your Full Name], residing at [Your Address], being of sound mind and disposing memory, do hereby declare this to be my last will and testament, revoking all prior wills and codicils made by me.

Article 1: Executor

I appoint [Executor’s Full Name], residing at [Executor’s Address], to be the executor of this will. If [Executor’s Full Name] is unable or unwilling to serve, I appoint [Alternate Executor’s Full Name], residing at [Alternate Executor’s Address], as the alternate executor.

Article 2: Debts and Expenses

I direct my executor to pay all of my debts, funeral expenses, and the expenses of administering my estate as soon as practicable after my death.

Article 3: Distribution of Assets

I give, devise, and bequeath my property and assets as follows:

• To [Beneficiary 1’s Full Name], I bequeath [Description of Property or Assets].
• To [Beneficiary 2’s Full Name], I bequeath [Description of Property or Assets].
• …

Article 4: Guardianship (if applicable)

If [Minor Child(ren) Full Name(s)] is/are still minors at the time of my death, I appoint [Guardian’s Full Name] as their guardian. If [Guardian’s Full Name] is unable or unwilling to serve, I appoint [Alternate Guardian’s Full Name] as the alternate guardian.

Article 5: Residuary Clause

I give, devise, and bequeath any remaining property or assets not otherwise mentioned in this will to [Residuary Beneficiary’s Full Name].

Article 6: Miscellaneous Provisions

[Include any additional provisions or specific instructions, such as charitable bequests, specific funeral wishes, etc.]

IN WITNESS WHEREOF, I have executed and signed this will as of [Date].

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[Your Full Name]
(Testator)

[City, State]

[Signature]

This is a basic template, and the details will need to be customised based on your individual circumstances and the laws of your jurisdiction. Again, consulting with a legal professional is essential to ensure that your will is legally valid and accurately reflects your wishes.

What is a Registered Will Deed?

A registered will is a will document that has been officially recorded with the appropriate government authority, usually the local registrar or the relevant legal entity responsible for maintaining such records. Registering a will provides additional authentication and evidentiary support, making it more secure and less prone to challenges.

Step by Step Will Deed Registration Process

Here’s a basic outline of the process to create a registered will:

Drafting the Will

• Start by creating a detailed and clear document outlining your wishes regarding the distribution of your assets, appointment of an executor, guardianship of minors (if applicable), and any other specific instructions.
• Include your personal details, details of beneficiaries, and the specifics of the bequests or distributions.

Visit a Lawyer

• Consult with a legal professional to ensure that your will complies with the laws of your jurisdiction and includes all necessary elements.

Visit the Sub-Registrar’s Office

• Take the drafted will to the local sub-registrar’s office or the appropriate government authority responsible for will registration.
• Complete the necessary forms provided by the office.

Witnesses and Notarisation

• Usually, two or more witnesses are required to attest to the signing of the will. The witnesses should not be beneficiaries or related parties.
• Some jurisdictions may require notarisation of the will.

Submission and Registration

• Submit the signed and witnessed will to the registrar along with any required fees.
• The registrar will review the document and, if everything is in order, officially record and register the will.

Obtain the Registered Will

• Once registered, the registrar will provide a certified copy of the registered will. It’s essential to keep this copy in a safe and accessible place.

Inform Relevant Parties

• Inform your executor, family members, or relevant parties about the existence and location of the registered will.

Will Deed Registration Charges

Here are the various court charges associated with a will deed in India:

Will registration fee in India

The price of creating a will in India ranges from ₹10,000 to ₹15,000, and this price does not include the cost of will preparation. Other than the little fees for scanning and photocopies, there are no government fees associated with registering a will.

Court fee for will registration in India

In order to grant probate, the court may demand a portion of the estate as payment. The ad valorem system, which determines the fees, indicates that a certain portion of the estate’s value must be probated. Probate proceedings are required in places like Kolkata, Mumbai, and Chennai.  For instance, in Maharashtra, if an asset is valued at less than `50,000, the court fee is ~25; if it is valued at between `50,000 and `2 lakh, it is ~4%; and if it exceeds `2 lakh, it is 7.5%. An upper limit of ~75,000 is set.

Supreme Court Judgement on Will Deed

As per the Act, a “will” refers to the formal statement made by the testator about the distribution of their property in accordance with their intents and wishes, which would be implemented upon their passing. Moreover, a codicil is a document added to, amended, or explained in connection with a will; it is considered to be a part of the will.

Will vs Gift Deed: The Difference

Here’s a table outlining the key differences between a Will and a Gift Deed:

Feature	Will	Gift Deed
Definition	A legal document that outlines the testator’s wishes regarding asset distribution after death.	A legal document transferring ownership of property from one person (donor) to another (donee) during the donor’s lifetime.
Effective Period	Becomes effective only upon the death of the testator.	Takes effect immediately upon execution and registration of the deed.
Revocability	Generally revocable during the testator’s lifetime, allowing changes to be made.	Generally irrevocable once the gift deed is executed, although there may be exceptions and conditions.
Transfer of Ownership	Ownership of assets is transferred to beneficiaries after the testator’s death.	Ownership of property is transferred to the donee immediately.
Execution Requirements	Requires the testator to be of sound mind and comply with specific legal formalities. Witnesses are usually required.	Requires the donor’s intention to gift, acceptance by the donee, and compliance with legal formalities, including registration. Witnesses may be required.
Purpose	Primarily used to distribute assets and appoint guardians after death.	Used for transferring property ownership as a gift during the donor’s lifetime.
Flexibility	Can be updated or amended by the testator as circumstances change.	Generally not easily amendable once executed. A new gift deed may be required for changes.
Legal Formalities	Specific legal formalities vary by jurisdiction but often involve witnessing and notarization.	Involves specific legal formalities, including registration with the appropriate authorities.
Tax Implications	May be subject to inheritance or estate taxes upon the testator’s death.	Gift tax may apply, and the donor may be responsible for paying any applicable taxes.
Survivor’s Rights	Surviving family members may challenge the will in certain circumstances.	Generally, once a gift deed is executed and registered, it is less susceptible to challenges.

Get a Registered Will Deed With NoBroker

Keep in mind that the specific procedures and requirements for registering a will deed can vary by jurisdiction. It’s crucial to consult with a legal professional or the local registrar’s office to understand and adhere to the specific regulations in your area. NoBroker has the best legal and financial expertise available. Start your will deed registration through NoBroker today!

Frequently Asked Questions

The Deed of Release: A Key Element in Property Transactions

The deed of release plays a pivotal role in property transactions in India, often facilitating smooth transfer and settlement among parties. Here, we have compiled some key pieces of information regarding deed of release such as its types, implications, formats and more.

What is a Release Deed?

A release deed is a legal document used in the transfer of property rights. It is typically executed when one party (the releasor) decides to relinquish their rights in a piece of property to another party (the releasee). This deed is crucial in scenarios where multiple parties hold an interest in a property, and one wishes to give up their share or rights, effectively transferring them to another co-owner or a specified individual.

The release deed is commonly used in family and inheritance scenarios, where a member may choose to forgo their share in favor of another family member. This instrument is different from a sale deed as it usually involves a transfer without monetary consideration, particularly among family members.

Know The Different Types of Release Deeds, Their Applications and Their Implications

Release deeds can be categorized into different types, each serving specific purposes in property transactions. Understanding these types is crucial for anyone involved in property dealings or estate management. Here’s a detailed look at each type:

Full Release Deed

• Purpose: This type is used when a releasor relinquishes all their rights and interests in a property to the releasee.
• Application: Common in scenarios where an individual wants to completely transfer their ownership stake, such as in family settlements or relinquishing inheritance rights.
• Legal Implication: Once executed, the releasor has no remaining rights or claims over the property.

Partial Release Deed

• Purpose: Here, only a portion of the releasor’s rights or interests in a property is transferred to the releasee.
• Application: Useful in situations where a co-owner wants to give up a part of their share in the property, maybe to another co-owner or a third party.
• Legal Implication: The releasor retains some rights or interests in the property after the execution of this deed.

Conditional Release Deed

• Purpose: This type involves the release of property rights contingent upon certain conditions being met.
• Application: Often used in business transactions where the release of rights is linked to performance criteria or other conditions.
• Legal Implication: The release deed becomes fully effective and enforceable only upon fulfillment of the stipulated conditions.

Release Deed Among Family Members

• Purpose: Specifically designed for property transfers within a family, usually without financial consideration.
• Application: Commonly used for the distribution of property among heirs or as part of estate planning.
• Legal Implication: Often subject to different legal and tax treatments, especially concerning stamp duty and registration charges.

Release Deed in Blood Relation

• Purpose: Similar to the family member release deed but specifically focused on blood relatives.
• Application: Used for property transfer among direct blood relatives, like parents to children.
• Legal Implication: Might have different legal requisites and benefits, especially in terms of reduced stamp duty in some jurisdictions.

Release Deed Without Consideration

• Purpose: Here, the transfer of property rights is made without any financial compensation to the releasor.
• Application: Typically seen in altruistic transfers, like gifting property to a family member or a charitable trust.
• Legal Implication: While no monetary consideration is involved, the deed still needs to be legally executed and registered.

The Implications of a Release Deed

The execution of a release deed indeed has substantial legal ramifications that each of the parties involved must be aware of. These implications include:

Transfer of Rights

The most direct implication of a release deed is the transfer of property rights. This can be either a full or partial transfer. In a full transfer, the releasor gives up all their rights to the property, effectively transferring complete ownership to the releasee. In a partial transfer, only a specific portion or aspect of the property rights is transferred, allowing the releasor to retain some stake or interest in the property.

Tax Implications

Tax considerations are an important aspect of release deeds, and they can vary significantly based on several factors. If the property has appreciated in value since it was originally acquired, the releasor may be subject to capital gains tax, even if the release deed is executed without financial consideration. The release deed must be stamped and registered, which involves costs. These costs can vary depending on the state, the value of the property, and the relationship between the parties involved. In some cases, if the release deed is among family members, there may be concessions or exemptions in stamp duty.

Legal Binding

A release deed is a legally binding document once it is properly executed, stamped, and registered. This means that the terms of the deed are enforceable in a court of law. If disputes arise, parties can contest the release deed in court. However, proving a deed invalid can be challenging, especially if it has been properly drafted and executed. To avoid legal disputes, it’s crucial that the deed clearly states the intent of the parties, the property in question, and the rights being released. It should also adhere to all the legal formalities required for such documents.

Release Deed in Blood Relation

In cases involving blood relations, the release deed is a preferred legal instrument for the transfer of property rights within a family. This approach is often chosen due to its specific benefits:

• Reduced Stamp Duty: Many Indian states offer significant concessions on stamp duty for release deeds executed between blood relatives. This reduction in stamp duty makes it a cost-effective option for transferring property within families.
• Simplified Process: The process for executing a release deed in blood relations is generally more straightforward compared to standard property transfers. The legal requirements are often less stringent, reflecting the trust and close relationship between the parties involved.

Release Deed Among Family Members

Release deeds are also commonly used among wider family members, beyond immediate blood relations, for property succession or settlement:

• Estate Planning: These deeds are often employed as a tool in estate planning, allowing for the distribution of property among heirs in a manner that may be more harmonious and agreeable than other methods.
• Legal Recognition: The deed provides a clear legal recognition of the transfer, safeguarding the interests of all involved parties. It helps in avoiding disputes among family members regarding property rights in the future.

Release Deed Sample Format

A standard format for a release deed typically includes:

• Details of the Parties: Names, addresses, and identification details of both the releasor (the party releasing the rights) and the releasee (the party receiving the rights).
• Property Description: A thorough description of the property, including its location, size, boundaries, and any other relevant characteristics.
• Terms and Conditions: Any specific terms or conditions related to the release of the property should be clearly stated.
• Signatures and Witnesses: The deed should include the legal signatures of both parties, and where required, signatures of witnesses to the transaction.

Here’s a sample release deed that you can use as a template-

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RELEASE DEED FOR SELF ACQUIRED PROPERTY 

This DEED OF RELEASE 

executed on this the day of                                                 ,20        ,  by                                                   _            _                                                        s/o                                                                                           residing  

at                                                                                                                                                    hereinafter referred to as the RELEASORS of the One Part; 

AND IN FAVOUR 

OF                                                                         s/o                                                                          residing at                                                                                                                                                    hereinafter referred to as the RELEASEE of the Other Part; 

The term RELEASORS and RELEASEE shall mean and include their heirs, executors, legal representatives and assigns. 

WHEREAS the property measuring an extent of                             sq.ft and building thereon situated in Door No.                   Road in                                                                    Village, in Survey No.                                                & within the limits of                                                             District was acquired by/through the father of the Releasor and the Releasee herein in and by sale deed dated                                      from                                                                 and registered as Document No.              of Book 1 volume                   filed at pages             to              on the file of the Sub Registrar of                                                                          _ 

WHEREAS the father of the Releasor and the Releasee died intestate on leaving behind the Releasor and Releasee as his class 1 legal herirs. 

WHEREAS the property more fully described in the Schedule hereunder is one of indivisible and it has been agreed by the Releasor to releasee his undivided                                                        right in the property in favour of the Releasee and the Releasee has also accepted for the same. 

NOW THIS DEED OF RELEASE WITNESSETH AS FOLLOWS; 

THAT the RELEASOR did not received any consideration from the RELEASEE herein has released and relinquished his undivided                                                        right in the property more fully described in the Schedule hereunder in favour of the RELEASEE herein. 

THAT the RELEASOR here after do not have any right, title, interest over the schedule mentioned property and the RELEASEE hereafter enjoy the same absolutely with full right, title and interest over the property more fully described in the schedule hereunder. 

THAT the RELEASOR covenant and undertake to execute any further documents that may be necessary for assuring the title in favour of the RELEASEE herein in respect of the property more fully described in the schedule hereunder at the cost of the RELEASEE. 

SCHEDULE OF PROPERTY 

In Witness Whereof the RELEASORS have set their hands and Signatures on the day, month and year first above written in the presence of 

WITNESSES:
1.	RELEASOR
2.	RELEASEE

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Documents Required for Release Deed

The essential documents for executing a release deed include:

• Original Property Documents: The title deed and any previous sale deeds to establish the chain of ownership.
• Identification Proof: Valid government-issued identification like PAN cards or Aadhaar cards for all parties involved.
• No Objection Certificate (NOC): If required, an NOC from relevant authorities, such as housing societies or local government bodies, might be necessary.

How Can NoBroker Help

NoBroker, with its comprehensive legal services, offers invaluable assistance in navigating the complexities of release deed transactions. Their team of experienced legal professionals provides expert guidance on release deeds, ensuring that all documents are legally compliant and tailored to individual needs. Check out NoBroker legal services for comprehensive legal advice when it comes to real estate transactions.

Frequently Asked Questions

Trust Deeds in India: A Complete Guide

Discover the nuances of trust deeds in India, from their meaning to the process of obtaining and registering them. Gain insights into the trust deed format through a concise exploration of this crucial legal document.

How Trust Deeds Work: Unveiling the Mechanism of Trusts

Understanding how trust deeds work is akin to unravelling the intricate mechanism of a trust. Here’s a step-by-step breakdown to demystify the process:

1. Creation of the Trust

When someone decides to establish a trust, they initiate the process by creating it. This involves transferring assets—these can be anything from property to funds—into the trust. These assets essentially become the “trust property” held for specific purposes.

2. Appointment of a Trustee

A crucial aspect of the trust’s functioning is the appointment of a trustee. The trustee is an individual or entity entrusted with the responsibility of managing and overseeing the trust property. This includes making decisions about how the assets are invested, utilized, and ultimately distributed.

3. Outlining Rules in the Trust Deed

The rules and guidelines governing the trust’s operations are documented in what is known as the trust deed. This legal document acts as the rulebook or constitution of the trust, providing a blueprint for how the trust is to be managed and how its assets are to be handled.

4. Legal Binding of the Trustee

Once the trust deed is in place, the trustee becomes legally bound to adhere to the rules outlined within it. This legal obligation ensures that the trustee operates in the best interest of the trust and its beneficiaries.

5. Intended Purpose

The core purpose of a trust is typically outlined in the trust deed. This could involve supporting specific beneficiaries, managing assets for the benefit of family members, or contributing to charitable causes. The trustee’s actions are directed toward fulfilling these intended purposes as specified in the trust deed.

6. Guiding the Trustee

The trust deed serves as a guiding document, steering the trustee in making decisions that align with the goals and objectives set forth by the creator of the trust. It acts as a reference point for the trustee, helping them navigate the complexities of managing and distributing assets responsibly.

A Closer Look at How Trust Deeds Function

Understanding how trust deeds work involves grasping the mechanism of trust. When someone creates a trust, they transfer assets into it, appoint a trustee to manage those assets and outline the rules in the trust deed. The trustee is legally bound to follow these rules, ensuring the assets are used for the intended purposes, such as supporting beneficiaries or charitable causes. The trust deed acts as a guide, steering the trustee in managing and distributing assets responsibly.

Core Components of a Deed of Trust

A deed of trust typically includes crucial details about a property transaction. It outlines the roles of three parties: the borrower (trustor), the lender (beneficiary), and a neutral third party (trustee). 

1. Borrower (Trustor)

The borrower, or trustor, is the individual or entity taking out the loan to acquire the property. In the context of a deed of trust, this party is obligated to repay the loan according to the agreed-upon terms. The trustor’s role is vital as they are essentially the property owner seeking financial assistance.

2. Lender (Beneficiary)

The lender, or beneficiary, is the entity providing the loan to the borrower. They entrust their funds to the borrower with the expectation of repayment, usually with interest. The lender’s interest is secured by the property itself, making the deed of trust a form of security for the loan.

3. Trustee

The trustee is a neutral third party who holds a crucial role in the deed of trust arrangement. Unlike in a mortgage where the lender directly holds the title, in a deed of trust, the trustee holds the title until the borrower fulfils the loan terms. The trustee is responsible for initiating foreclosure proceedings if the borrower defaults on the loan, acting as a safeguard for the lender’s interests.

Key Information Included in a Deed of Trust

Property Description

The deed of trust includes a detailed description of the property being used as collateral for the loan. This description ensures clarity about the specific real estate involved in the transaction.

Loan Amount

The document specifies the amount of money being lent to the borrower. This is a critical element, as it outlines the financial terms of the agreement.

Repayment Terms

The terms and conditions for repaying the loan are explicitly stated in the deed of trust. This includes the schedule of payments, interest rates, and any other relevant details regarding loan repayment.

Conditions for Foreclosure

One of the significant features of a deed of trust is its provision for foreclosure. The document outlines the conditions under which the trustee can initiate foreclosure proceedings, such as the borrower’s failure to meet repayment obligations.

Know the Common Trust Deed Format

A deed of trust is a lengthy and comprehensive document. The following is a rough exemplar format you can use for reference-

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DEED OF TRUST

THIS DEED OF TRUST executed at _______on this _________day of_________20 ____, 

BETWEEN 

_____________________________ (Party of the first part) hereinafter called 

“SETTLOR” OF THE ONE PART 

AND 

1. _________________ S/O. ________________, residing at ____________ & 

2. __________________S/O. ________________, residing at ____________ & 

3. SMT. W/O SHRI. , of ____________ 

(Hereinafter called ” The Trustees” which expression shall unless repugnant to the context or meaning thereof be deemed to include the survivors or survivor of them and the trustees or trustee for the time being of these presents and their heirs, executors and administrators of the last surviving trustee, their or his assignees) of the other part; 

WHEREAS the SETTLOR is possessed of the sum of Rs. ___________/- (Rs. __________)only and assets and properties mentioned in the Schedule hereunder as his absolute property and he is desirous of creating a Religious/ Charitable/Educational Trust for the benefit of the humanity at large. 

AND WHEREAS each of the parties hereto of the “Other Part” has individually and jointly has agreed to act as Trustees of the Trust, proposed by the party of the first part. 

AND WHEREAS nothing contained in this deed shall be deemed to authorize the trustees to do any act which may in any way be construed statutory modifications thereof and all activities of the trust shall be carried out with a view to benefit the public at large, without any profit motive and in accordance with the provisions of the Income Tax Act, 1961. 

AND WHEREAS the trust is hereby expressly declared to be a public charitable trust and all the provisions of this deed are to be constituted accordingly. 

NOW THIS DEED OF TRUST WITNESSTH AS FOLLOWS: 

1. Settlement: 

The party of the first part, the SETTLOR, does hereby settle the sum of Rs._______ /- (Rs. __________ only) in Trust, with the name and for the objects hereinafter stated, by delivering the said amount in cash which the party of the other part, the Trustees, have accepted the receipt of which they do hereby acknowledge, to hold the same in and to the Trustees with the powers and obligations as provided hereinafter. 

2. Name: 

The name of the Trust shall be “____________________________”. 

3. Place: 

The principal office of the Trust shall be situated at ______________________. The Trust may also carry on its work at any other place or places, as decided by the Trustees. 

4. Objects: 

The objects of the Trust are – 

(a) Educational – to run, maintain or assist any educational or other institution for coaching, guidance, counselling or vocational training or to grant individual scholarships for poor, deserving and needy students for elementary and higher education. 

(b) Medical – to run, maintain or assist any medical institution, nursing home or clinics or to grant assistance to needy and indigent persons for meeting the cost of medical treatment. 

(c) Relief of the poor – to give financial or other assistance in kind by way of distribution of books, notebooks, cloths, uniforms, or meals for the poor and indigent and to the persons suffer due to natural calamities. 

(d) Old age and Physically challenged – Establishment, conduct, maintenance of old age homes, homes for physically challenged men, women and children and persons with similar disabilities and also for granting financial assistance to institutions performing similar activities. 

(e) Other objects of general public utility – 

(i) to acquire property for the sole use of the public by making it available for public purposes, for example – a library, clinic, crèche or a community hall to be available for public use as training classes, seminars, discourses and other public functions for benefit of the community in general. 

(ii) to undertake any other activity incidental to the above activities but which are not inconsistent with the above objects. 

The TRUSTEES do hereby agree that they shall hold and stand possessed of the said trust assets, properties and funds (which expression shall include all investments in cash or kind or in any nature whatsoever into and for which, the said property or a part or parts thereof may from time to time be converted, varied or exchanged) and/ or such investments as may be held by the TRUSTEES from time to time in relation to these presents together with all income, profits, additions and accretions thereof, upon trust for the object set out above with and subject to the provisions and conditions hereinafter contained in these presents. 

5. Beneficiaries: 

The Trust is established for the benefit of the citizens of India and the class of people mentioned above without discrimination of caste, religion, creed or sex. 

6. Properties: 

The Trust properties shall consist of 

(a) The amount Transferred by the SETTLOR as mentioned above, towards the Corpus fund of the Trust. 

(b) The immovable properties and other assets transferred by SETTLOR as mentioned above. 

(c) Any cash, kind, properties, movable and immovable that may be acquired by purchase or otherwise or all manner of rights, title or interest in or over any property movable or immovable 

(d) All additions and accretions to the Trust properties and the income there from 

(e) All donations, gifts, legacies or grants, in cash or kind accepted by the Trustees upon Trust. The properties of the Trust shall be utilized for the objects set forth herein above and subject to the provisions and conditions herein mentioned. 

7. Funds: 

The Trustees may accept donations, grants, subscriptions, aids or contributions from any person, Government, Local authorities or any other charitable institutions, in cash or in kind including immovable property without any encumbrance, but the Trustees shall not accept any receipt with any condition or terms inconsistent with the objects of the Trust. While applying such receipts to the objects, the Trustees shall respect the directions, if any, by the granter. Any receipt with specific direction to treat the same as part of the corpus of the Trust or separate fund shall be funded accordingly. 

8. Investments: 

(a) All monies, which will not be immediately required for current needs shall be invested by the Trustees in eligible securities and investments, or in banks. Such investments shall be in the name of the Trust. 

(b) That the trustees shall invest the trust fund, carry on any business with the trust fund and/or enter into partnership on behalf of the trust, as they may deem fit. 

(c) That the trustees shall manage the trust fund and investments thereof as a prudent man would do the same. They shall recover all outstanding and meet all recurring and other expenses incurred in the upkeep or management thereof. 

(d)That the trustees shall receive and hold the income of the trust on behalf of and for the benefit of the beneficiaries under the trust. 

9. Number of Trustees and their Term: 

The Trust will be managed by a Board of Trustees consisting of not less than 2 trustees and not more than 9 trustees. The parties of the Other Part will be First Trustees and they shall automatically form the Board of Trustees. 

The first Managing Trustee shall be the SETTLOR and he will hold office for his life time. After the demise or relinquishment of office of the Managing Trustee or in the event of the first Managing Trustee failing to nominate his successor in office, the remaining trustees shall elect one of the other Trustees as Managing Trustee. 

The term of office of First Trustees shall be for their respective lives. The Board of Trustees shall have the power to increase the total number of Trustees upto the maximum number stated above and fix their term as per provisions contained herein. 

Any Trustee, including the Managing Trustee may retire from the Trusteeship hereof by giving two months notice in writing of his or her intention to do so, to the Board of Trustees and after the expiry of the period of notice, the Trustee shall cease to be a Trustee of these presents. 

Any vacancy caused by death of any one of the First Trustees, or any vacancy caused by the resignation of any of the Trustees, may be filled up by co-option by the Board of Trustees. 

The Trustees who are not First Managing Trustee or First Trustees shall hold office for a period of one year from their date of appointment by the Trustees. At the end of this one year period, the Board of Trustees may reappoint them for subsequent term or appoint other persons as 

Trustees in such a manner that the total number of Trustees does not exceed the approved maximum number of Trustees. 

The Managing Trustee shall have the power to remove a Trustee suffering from physical or mental disability or if he is accused of misfeasance of trust funds or property or misconduct, after satisfying himself on enquiry and such action of the Managing Trustee shall be final. 

The proceedings of the Board of Trustees shall not in any way be invalidated due to any post or posts remaining vacant. During the time when a vacancy is yet to be filled up, the remaining 

Trustees shall act as “Full Board”, subject to the presence of Quorum in the meetings. Any vacancy in the Board of Trustees or illegality in the appointment of Trustees or their proceedings shall not invalidate any prior act or decision of the Board. 

10. Administration of Trust and Power of Board 

The Board of Trustees shall have power to: 

(a) To administer the Trust, its properties and affairs and do all the things which will fulfill the performance of the objects for which the Trust is established and for this purpose the Board can apply the whole or any part of the Trust property towards the payment of the expenses of the Trust. 

(b) The income and the properties of the Trust will be solely utilized towards the objects of the Trust and no portion of it will be utilized for payment to the Settlor or Trustees or their relatives by way of salary, allowances, profit, interest, dividend etc. 

(c) To open one or more bank accounts and operate the same or provide for operation of the said accounts by any two among them authorized on their behalf. 

(d) To invest the Trust funds in the manner not prohibited by any provisions of the Income Tax Act, 1961. 

(e) To buy, sell, mortgage, grant, lease, hire or otherwise alienate all or any of the properties of the Trust in its discretion for adequate consideration. However any sale or alienation of immovable properties of the trust can be done only after obtaining the prior approval of the appropriate authorities. 

(f) To execute Power of Attorney or Powers of Attorney to any person for the purpose of executing, administering or managing the whole or any part of the Trust for the purpose of all or some objects of the Trust. 

(g) To borrow money with or without security and to repay the same. 

(h) To receive, collect and enforce recovery of all monies due or payable to the Trust and grant receipts and discharges therefore. 

(i) To settle, compromise or compound any disputes or refer the same to arbitration 

or litigation. 

(j) To receive voluntary contributions from any person or persons from India or outside, after complying with the statutory formalities, by way of donation, gifts or in any other manner and to hold the same upon Trust for the objects set forth herein. 

(k) To appoint, suspend, dismiss or otherwise deal with the staff required for the administration of the Trust, to frame rules relating to their salaries and other benefits and generally to exercise all powers ancillary and incidental to effectively carry out the objects of the Trust. 

(l) The Board shall have power to make and rescind rules and regulations for the management and administration of the Trust. 

(m) No Trustee shall commit any act or breach of Trust of the Trust fund or property or cause any loss to the Trust property or commit fraud in the administration of the Trust fund / property. 

(n) The Trustees shall hold honorary office and shall not be entitled to any Salary, allowances or perquisites, except for the reimbursement of actual expenses incurred in connection with attending to the Trust matters. 

(o) The Board of Trustees will follow the instructions given by any donor who makes substantial contribution towards furtherance of the objects of the Trust, so long as such instructions are not detrimental to the attainment of the objects of the Trust and are in conformity with the provisions of the Income-tax Act, 1961. 

(p) For the management and administration of the Trust, the Trustees shall elect one amongst themselves for each of the offices of Vice President, Secretary and Treasurer. The term of office for Vice President, Secretary and Treasurer shall be for a period of one year from their date of appointment and they may be re-elected for further terms. No Trustee including the Managing Trustee shall hold more than one of the above offices at the same time. The persons holding these offices of Vice President, Secretary and Treasurer shall be under the administrative guidance and supervision of the Managing Trustee and will report to him directly. 

11. Roles and Responsibilities: 

The Roles, Responsibilities and powers of all the officers are detailed below. In addition to these, the Managing Trustee may grant additional roles, responsibilities and powers to any of the Trustees. 

(a) Managing Trustee – 

The Managing Trustee shall preside over the meeting of the Board of Trustees. The Managing Trustee is authorized to sign all documents, including bank documents, acknowledgements for the contributions received, and agreements with individuals, Government Institutions and other organizations, on behalf of the Board of Trustees. The Managing Trustee shall have all the residuary powers, not explicitly assigned to any of the other officers in these presents. The Managing Trustee is authorized to sign along with the Treasurer, bank cheques, deposit release vouchers etc. The Managing Trustee is empowered to remove any Trustee from the Trust and its offices, if he finds that his/her activities are not congenial to the activities of the Trust. The Managing Trustee is responsible for ensuring that the Trust pursues its Objects and for maintaining the dignity of the Trust organization and shall use his influence to promote the activities of the Trust. 

(b) Vice President – 

The Vice President shall discharge the duties of the Managing Trustee, in the absence of the Managing Trustee of the Trust and shall have the power and authority delegated and assigned to him/her by the Managing Trustee. 

(c) Secretary 

The Secretary shall maintain the records of the trust, prepare and circulate agenda for Board of Trustees’ meeting for the approval of the Managing Trustee and also prepare the minutes of the Board meeting. The Secretary shall be also responsible for the day to day administrative activities of the Trust. The Secretary shall deal with correspondence received by the Trust, send replies in consultation with the Managing Trustee, Vice President and/or the Treasurer wherever necessary. He/she will be responsible for the safe custody of all the properties and records of the Trust. The Secretary shall represent the Trust in all legal matters, sign the papers related to legal cases, attend to courts or represent the Trust in Government offices. 

(d) Treasurer 

The Treasurer will prepare Annual Budget, monthly and yearly expenditure statements get the expenditure audited by auditor duly appointed by the Board of Trustees and place them before the Board of Trustees for approval. The Treasurer is responsible to maintain cash book and prepare vouchers for the payments made, receive contributions, sign acknowledgements for the amounts or articles received by the Trust and prepare monthly and yearly statements of revenue and expenditure, as well as, the register of assets of the Trust and place them before the Board of Trustees for their approval. The Treasurer is authorized to sign bank cheques, application for drafts and payment instructions jointly with the Managing Trustee and draw money from the bank, upto the limits defined by the Board of Trustees in their meetings. The Treasurer is responsible for safe custody of cash, bonds, securities etc. of the Trust. 

12. Meeting of the Board of Trustees: 

The Board of Trustees should meet atleast once in every calendar quarter and may meet more often when required. 

(a) The meeting of Board of Trustees shall be convened by the Managing Trustee and he shall preside over the meetings. In his absence, the Managing Trustee may authorize the Vice President to be the Chairman of such meetings. In the event the Managing Trustee or Vice President are not able to attend the meeting already convened, any of the Trustees present in the meeting may elect one amongst themselves to be the Chairman of the meeting. 

(b) One half of the Board of Trustees or a minimum of two trustees, whichever is higher, shall constitute the Quorum for the Board of Trustee meetings. 

(c) All decisions shall be carried out by the majority decision of the Board but in the event of equality of votes, the Chairman presiding over the meeting shall have a casting vote. 

(d) Any resolution in writing signed by all the Trustees by circulation shall have equal force as though it has been passed at a meeting of the Board of Trustees. 

(e) The meeting of the Board shall be conveyed after giving at least a week’s notice unless all the Trustees agree to accept a shorter notice. 

(f) The Board of Trustees may invite other persons interested in the objects and functioning of the Trust to attend the meetings of the Board, but they shall not be entitled to vote in the meetings of the Board. 

13. Bank Account: 

All income, subscription and pecuniary donations for the general purposes of the Trust and the income, investments and all other money from time to time forming part of the general revenue of the Trust shall on the same being received be paid into a bank account with any scheduled bank for the purpose of the Trust. The bank accounts shall be operated by the Managing Trustee along with any one of the remaining Trustees. One or more Bank Accounts may be opened in any Bank and/or Banks in the name of the Trust. 

14. Accounts And Audit: 

The financial year of the Trust shall be from 1st April to 31st March of the following year, unless otherwise decided by the Board of Trustees. The Trustee shall maintain proper books of account of all the assets, liabilities and income and expenditure of the Trust and shall prepare an Income and Expenditure Account and Balance Sheet for every year as on the last day of March. The accounts of the Trust shall be annually audited by a Chartered Accountant or a firm of Chartered Accountants who shall be appointed for that purpose by the Trustees and the audited accounts shall be placed at a meeting of the Trustees, which shall be held before the end of the succeeding year. 

15. Irrevocable: 

This Trust is declared irrevocable. 

16. Amendments: 

While this Trust shall be irrevocable, the Board of Trustees may amend any of the clauses except those relating to objects of the Trust. The First Managing Trustee and First Trustees may do so, at a duly convened meeting of the Board with at least two weeks’ notice, and by a resolution passed by atleast three-fourth majority of the Board of Trustees present and voting. The amendments to the Trust deed can only be passed by a resolution of the Board of Trustees in an actual meeting and not by circulation. If any alteration or amendment is necessary, the same shall be affected through supplementary deed/deeds with the previous approval of the Commissioner of Income Tax and these shall be read together with the main Trust deed. 

17. Amalgamation: 

The trustees may amalgamate the Trust with another Charitable Trust or Institution having similar objects with prior permission of the Charity Commissioner/Court/any other law as may be applicable for the time being. 

18. Settlor and their Relatives: 

Notwithstanding the powers vested with the Trustees, no part of the income of the Trust shall benefit directly or indirectly the trustees and no part of the income of the property of the Trust shall be used or applied directly or indirectly for the benefit of: 

(a) SETTLOR, Managing Trustee, Trustees or any person who makes a substantial contribution to the Trust or of any relative of the SETTLOR, Managing Trustee, Trustees or the person who makes a substantial contribution. 

(b) Any “related concern” in which any of the above persons has substantial interest. 

(c) For the purpose of this clause, the word “relative” and the phrases “related concern”, “substantial interest” and “substantial contribution” shall have the meanings assigned to them in the Income Tax Act, 1961. 

19. Applicability Of Trust Act: 

The provisions of the Indian Trust Act, 1882 (or any other applicable state specific trust Act) shall apply to all matters not specifically mentioned in these presents. 

20. Dissolution: 

In the event of dissolution or winding up of the Trust the assets remaining as on the date of dissolution shall under no circumstances be distributed amongst the Trustees but the same shall be transferred to some other similar Trust/Organisation whose objects are similar to those of this Trust with the permission of the Charity Commissioner / Court / any other law as may be applicable for the time being. The Trustees shall be indemnified against all losses and liabilities incurred by them in the execution of the Trust and shall have a lien over the funds and properties of the Trust for such indemnity. 

SCHEDULE 

At present, the Trust has no property or assets, either movable or immovable, other than the Trust Fund and the immovable properties, donated by the SETTLOR, as described in the Schedule below: 

1. Cash contribution to the Corpus Fund of the Trust of Rupees ————— (Rupees ————————————————————————– only) 

2. Properties of ————————————————————————– 

3. Assets of —————————————————————————– 

IN WITNESS WHEREOF, The Parties hereunto have signed and delivered the presents on the day and year first hereinabove written. 

SETTLOR 

WITNESS: 1. TRUSTEE ____________ 

1. 2. TRUSTEE ____________ 

2. 3. TRUSTEE ____________ 

Understanding the Differences Between Deed of Trust and Mortgage

While both a deed of trust and a mortgage serve as security for a loan, they differ in their structures. In a deed of trust, there are three parties involved: the borrower, the lender, and the trustee. The trustee holds a “power of sale” that allows them to sell the property if the borrower defaults. On the other hand, a mortgage involves just two parties—the borrower and the lender—and it typically requires a judicial foreclosure process. So, the primary distinction lies in the number of parties and the foreclosure process.

Contrasts Between Warranty Deed and Deed of Trust

A warranty deed and a deed of trust serve different purposes in a real estate transaction. A warranty deed is a document that transfers ownership of a property and guarantees that the seller has clear title to the property. It’s essentially a promise that the property is free from any liens or encumbrances. On the contrary, a deed of trust is a security instrument that is used to secure a loan, involving a trustee who holds the power to sell the property if the borrower defaults. In simple terms, one assures ownership, while the other secures a loan.

A trust deed is not merely a legal document. It forms the foundation of trust in the relationships between the borrower, lender, and trustee in the context of property transactions. It defines the rules, safeguards the interests of all parties, and outlines the conditions under which foreclosure can occur.

Need help figuring out complex legal documents and procedures? Give NoBroker Legal Services a try. We’re here to help.

FAQs

Shop The Rent Agreement Template Online With Documents and Benefits

A shop rent agreement is a pivotal document that outlines the terms and conditions between a landlord and a tenant for the rental of commercial property. It delineates the responsibilities of each party, ensuring a clear understanding and smooth commercial occupancy. This contract serves as a legal compass, guiding both sides through their tenure with security and certainty.

What is a Shop Rent Agreement?

A shop rent agreement stands as the cornerstone of renting commercial premises. It’s a contract steeped in legality, which solidifies the lease of a space—this could range from a retail shop to an office or a storage facility. This agreement acts as a rulebook, laying out the critical terms such as how much rent is due, when it’s payable, the tenure of the lease, and the specifics around maintenance duties. It also charts the course of action for ending the lease.

At its core, the agreement serves as a safeguard, a guardian of clarity and mutual respect between a landlord and a tenant. For the property owner, it’s a pledge for consistent rental income and assurance that their property remains well-maintained. For entrepreneurs or business owners, it’s a shield that secures their commercial sanctuary, providing them with a clear understanding of their rights and the scope of their responsibilities within the leased space.

Elements to Include in a Shop Rental Agreement

Creating a shop rental agreement requires meticulous attention to detail and a clear understanding of the commercial relationship you’re entering. This document is the bedrock upon which the landlord-tenant relationship is built, ensuring that the rights and duties of both parties are clearly laid out and legally enforceable. Let’s walk through the key components that should be included to forge a robust agreement.

Identification of Parties

At the outset, the agreement must distinctly mention who is involved. This means stating the full names and addresses of the landlord (or the lessor) and the tenant (the lessee), making the obligations and rights unequivocally attributed to the stakeholders of the lease.

Property Description

Precision is key when detailing the leased space. A proper delineation includes the complete address, the precise area in square footage, and any unique attributes that set the property apart. This section ensures there are no ambiguities about the premises in question.

Lease Duration

The heart of the agreement lies in its timeline: clearly define when the lease will commence and the expected end date. This term sets the expectations for both the length of stay and the longevity of the business operations allowed within the space.

Financial Terms

Money matters should be transparent and precise. The agreement must stipulate the rent amount, due date, and accepted payment methods. It should also address the security deposit – the amount, purpose, and conditions for its return, anchoring financial security for both parties.

Maintenance and Repairs

Who takes care of what? Assigning responsibility for upkeep and repairs prevents future conflicts. This clause covers everything from minor repairs to major maintenance tasks and should be agreed upon to keep the property in top-notch condition.

Utility Responsibility

Clarify who will bear the costs of utilities such as water, electricity, and waste disposal. This clarification in the agreement avoids any surprise expenses down the line.

Subletting and Assignment Rights

The agreement should delineate whether the tenant is permitted to sublet the space or assign the lease. This clause is crucial for tenants who might consider business expansion, contraction, or relocation.

Usage Regulations

A shop rental agreement should specify what the tenant can and cannot do with the property. It is common to include restrictions to ensure the property is used in a manner that is consistent with its zoning and avoids nuisances.

Landlord’s Right of Entry

The agreement should include conditions under which the landlord may enter the premises. Usually, this is to conduct inspections, undertake repairs, or show the property to potential future tenants. Yet, it must also respect the tenant’s right to conduct business without undue interference.

Lease Termination

This section is about the endgame. It should include how either party can terminate the agreement and under what conditions, including the requisite notice period.

Dispute Resolution

No one likes to think about disputes, but having a resolution process in place is a must. This can range from mediation to arbitration, and having it in black and white encourages amicable solutions before stepping into a courtroom.

Additional elements like insurance requirements, conditions for improvements, signage permissions, and parking entitlements might also be included to cover all bases. It’s advisable for both the landlord and tenant to understand each clause fully. When in doubt, professional legal counsel should be sought to navigate the nuances of a shop rental agreement.

By carefully crafting each section of the shop rental agreement, you lay down the foundation for a successful and dispute-free tenancy. It’s not just about protecting your interests; it’s about creating a clear path for the commercial journey ahead.

Shop rent agreement: Documents required

When entering into a shop rent agreement, certain documentation is required to ensure the legality and validity of the contract between the landlord and the tenant. These documents are crucial as they affirm the identity and legitimacy of both parties, as well as the premises involved.

For the Landlord:

1. Proof of Identity: A valid photo ID such as:

• Aadhaar card
• Passport
• Driving licence

2. Proof of Address: Any of the following:

• Aadhaar card
• Passport
• Recent utility bills

3. Photographs: Recent passport-size photographs.

4. Property Title Deed: The original document confirming ownership of the shop.

5. No Objection Certificate (NOC): If the shop is in a complex, an NOC from the society or association is essential.

For the Tenant:

1. Proof of Identity: Acceptable forms include:

• Aadhaar card
• Passport
• Driving licence

2. Proof of Address: As with the landlord, options include:

• Aadhaar card
• Passport
• Utility bills

3. Photographs: Recent passport-size photographs for personal identification.

4. Bank Statement: A recent statement to demonstrate financial stability.

5. Guarantor’s Details: Information about a guarantor, if necessary.

Additional Documents:

Depending on the nature of the business and local legal requirements, the following may also be requested:

• Trade licence
• PAN card
• GST certificate

Collecting these documents in advance will facilitate a smooth and efficient agreement process, setting a clear understanding between landlord and tenant from the outset.

Benefits of Shop Renting Agreements

Engaging in a shop rent agreement can bring significant advantages to both parties involved, fostering a stable and clear-cut relationship. Below are the key benefits laid out for landlords and tenants.

For Landlords:

1. Assured Income: One of the primary benefits for landlords is the security of a steady stream of rental income, ensuring that they receive consistent payments throughout the duration of the lease.

2. Investment Protection: Landlords benefit from the protective measures within the agreement that stipulate the tenant’s duty to maintain and repair the property, thus safeguarding the landlord’s investment.

3. Legal Safeguard: A shop rent agreement serves as a legal fortification for landlords, providing a firm contractual base that stands its ground in case of any disputes with tenants.

For Tenants:

1. Tenure Stability: For tenants, the agreement secures the right to use the property for a set lease term, offering a stable and predictable business environment.

2. Clear Terms: The agreement spells out all terms and conditions with clarity, covering aspects such as the rent, payment modalities, and upkeep obligations, reducing the likelihood of future misunderstandings or conflicts.

3. Mental Tranquillity: Possessing a formal shop rent agreement can grant tenants peace of mind, knowing that their commercial interests and rights are protected by law.

Additional Benefits:

1. Harmonious Landlord-Tenant Relations: These agreements lay the groundwork for a cordial and transparent relationship between the landlord and tenant, built on mutual understanding and respect.

2. Ease of Transferability: Should there be a change in ownership or if the property is to be sold, the agreement facilitates a smooth transfer process to another tenant.

3. Legal Evidence: In the unfortunate event of legal disagreements, the shop rent agreement holds its own as credible evidence in a court of law.

These benefits underscore the importance of a well-crafted shop rent agreement in protecting the rights and interests of both landlords and tenants, leading to a successful and trouble-free rental experience.

Rent Agreement Format for Shop 

Entering into a lease for a retail space requires a clear and comprehensive shop rent agreement to outline the terms between the landlord and tenant. This contract acts as a roadmap for the rental relationship, detailing obligations, rights, and responsibilities. Below is a shop agreement format that can help you craft the same:

How to Cancel a Shop Rent Agreement?

Cancelling a shop rent agreement might seem daunting, but it can be a straightforward process if you follow the right steps. Here’s how you can navigate the cancellation of your shop lease agreement:

1. Examine the Termination Clause

Start by scrutinising the terms laid out in your rental agreement, focusing specifically on the termination clause. This part of the contract will detail how much notice you must give before ending the lease, typically ranging from one to three months.

2. Issue a Formal Notice

After you’ve understood the notice requirements, draft a formal notice. The letter should clearly state your intention to end the lease, including the effective date of termination. To ensure there’s a record of delivery, send this notice via registered post or a reputable courier service.

3. Discuss with Your Landlord

Should you choose to terminate the lease prematurely, it’s likely that a cancellation fee or penalty will apply. However, there’s always room for discussion. Engage in a dialogue with your landlord; perhaps you can agree on a reduced fee or eliminate it entirely, particularly if the early termination is due to extenuating circumstances.

4. Vacate and Restore the Property

When the date to vacate the property arrives, ensure that all your possessions are removed and the premises are left in good condition. Cleaning up and handing back the keys to the landlord is part of honouring the agreement and ensuring a smooth process.

Remember, terminating a lease is ideally done amicably. Court proceedings to cancel a shop rent agreement are a last resort – they’re typically lengthy and costly. Always seek a mutual understanding with the landlord to circumvent this route.

A shop rent agreement is more than a document; it’s a blueprint for a secure commercial lease. This blog has distilled its essence, highlighting the crucial balance between protection and clarity it offers both landlords and tenants. 

NoBroker’s Legal services can serve as your ally in drafting impeccable agreements, ensuring peace of mind when securing your commercial space. Renting through NoBroker not only streamlines the process but adds layers of security and simplicity to the transaction. With our guidance, establish a firm ground for your business operations with a comprehensive shop rent agreement.

Frequently Asked Questions

Deed of Reconveyance in India: All You Need to Know

A Deed of Reconveyance in India is a vital legal document, especially in the realm of mortgages. It plays a significant role in property transactions and debt repayment. In this article, we’ll delve into the meaning, format, registration, and importance of a reconveyance deed in India.

What is a Deed of Reconveyance?

A Deed of Reconveyance, also known as a reconveyance deed, plays a pivotal role in property transactions, particularly those involving mortgages. This legal document carries substantial significance for both borrowers and lenders and encompasses various essential aspects, including the reconveyance deed’s meaning, the reconveyance of a mortgage, its format, and more.

At its core, the reconveyance deed’s meaning is the transfer of property title from the trustee to the trustor. The trustor, in this context, is the individual who borrowed funds to finance the purchase of the property. This transfer occurs once the trustor has fully repaid the mortgage, marking a crucial milestone in property ownership.

The concept of reconveyance is intimately connected with the repayment of a mortgage. When someone opts for mortgage financing or a home loan to acquire a property, a deed of trust is initially employed to secure the lender’s interests. This deed of trust places the property title in trust, designating the lender or trustee as the beneficiary.

Regarding the reconveyance deed’s format, it adheres to specific legal requirements. Typically, it includes comprehensive property details, the names of both the trustor and trustee and a clear statement affirming the complete repayment of the mortgage debt. Notably, the trustee’s signature on the document must be notarized to ensure its legal validity.

To finalize the transfer of property title and make it legally binding, the reconveyance deed must be submitted and recorded at the relevant municipal or provincial records office. The precise registration process may vary depending on the jurisdiction, emphasizing the importance of adhering to regional legal requirements.

In essence, a Deed of Reconveyance signifies a deed of full reconveyance. It serves as a concrete confirmation that the mortgage loan has been paid in full, and the trustor, who was initially the borrower, now holds undisputed ownership of the property. This transition from mortgage holder to property owner marks a significant turning point in a borrower’s financial commitment and property ownership journey.

How Does a Deed of Reconveyance Work?

When a borrower fully repays their mortgage loan, the lender initiates the reconveyance process. The lender contacts the title company, which is responsible for issuing the deed of reconveyance, following the specific legal requirements dictated by state law. This typically occurs within a relatively short timeframe, approximately 3 to 4 weeks after the final loan payment.

A crucial element of the reconveyance process is the meticulous documentation of the property’s legal status. The deed of reconveyance includes essential information such as the name and address of the homeowner or mortgage borrower. This section of the document ensures that the borrower’s identity is accurately recorded.

Additionally, the deed of reconveyance specifies the name of the lender or trustee involved in the mortgage transaction. The trustee, often a bank or financial institution, holds the property title in trust until the mortgage is fully repaid.

One of the fundamental aspects of the reconveyance deed is the legal description of the property. This comprehensive description leaves no room for ambiguity and includes details such as property boundaries, dimensions, and parcel numbers derived from the original deed. This detailed legal description serves to precisely identify the property in question.

The heart of the reconveyance process lies in the proof of the borrower’s fulfilment of their financial obligation. The deed of reconveyance unequivocally states that the property, once used as collateral for the home loan, now exclusively belongs to the borrower. This transition of property ownership from lender or trustee to borrower signifies the culmination of the mortgage.

To add an extra layer of legal validity, the deed of reconveyance must be notarized. This notarization process is typically conducted by a notary public and serves as verification of the document’s authenticity and the validity of the signatures therein.

What Information is Mentioned in a Deed of Reconveyance?

This document encompasses various critical details, including reconveyance deed meaning, reconveyance of mortgage, reconveyance deed format, and more, all serving to establish the transfer of property ownership from the lender or trustee to the borrower.

Name and Address of the Homeowner/Mortgage Borrower

• At the outset, the reconveyance deed identifies the homeowner or mortgage borrower. It provides the borrower’s full name and current residential address.

Name of the Lender/Trustee

• Additionally, the document specifies the name of the lender or trustee involved in the mortgage transaction. The trustee holds the property title in trust until the mortgage is fully repaid.

Legal Description of the Property and Parcel Number

• A fundamental aspect of the reconveyance deed is the inclusion of a comprehensive legal description of the property. This description is meticulous and ensures precise identification of the property.
• Parcel numbers, derived from the original deed, are often included to further define and reference the property’s legal status.

Proof of Fulfillment of Borrower’s Obligation

• The core purpose of the reconveyance deed is to furnish irrefutable evidence that the borrower has dutifully fulfilled their financial obligation to the lender.
• This section of the deed unequivocally states that the property, once held as collateral for the home loan, now rightfully and solely belongs to the borrower. This marks the complete transition of property ownership.

Signatures of Parties Involved

• The reconveyance deed bears the signatures of all relevant parties in the transaction. Typically, this includes the borrower, the lender or trustee, and in some cases, a notary public.
• These signatures signify the unanimous consent and agreement to the terms and conditions stipulated within the reconveyance deed.

Notary Stamp

• To enhance the document’s legal validity, a notary stamp is affixed to the reconveyance deed. This stamp serves as confirmation that the signatures on the document have undergone verification by a notary public, thereby affirming both the authenticity of the signatures and the overall legitimacy of the document.

Why is a Deed of Reconveyance Important?

The significance of a Deed of Reconveyance is multifaceted, encompassing reconveyance deed meaning, reconveyance of mortgage, and ensuring a clear title, making it a vital document for homeowners. Here, we explore the key reasons why a deed of reconveyance is essential.

1. Establishing a Clear Title

A central role of the reconveyance deed is to provide tangible evidence that a property holds a clear title. This means that the property is free from any outstanding mortgages, liens, or claims.

In real estate transactions, having a clear title is highly desirable and often a requirement for buyers. It assures them that the property they are purchasing is unencumbered by financial encumbrances, enhancing their confidence in the transaction.

2. Facilitating Property Sale

When homeowners decide to sell their property, the reconveyance deed becomes a crucial asset. It serves as compelling proof that the mortgage has been fully repaid and that the property has transitioned to the homeowner’s sole ownership. Without this documentation, selling a property can become challenging, as prospective buyers typically seek assurance of a clear title to proceed with the purchase.

3. Protecting Homeowner’s Rights

Even if there are no immediate plans to sell the property, a reconveyance deed remains vital for homeowners. It acts as a safeguard against potential claims from lenders. This means that the lender cannot assert any continued interest or ownership rights in the property once the mortgage is paid off. This protection ensures that homeowners can enjoy undisputed ownership and control of their property.

4. Acknowledging Mortgage Repayment

The reconveyance deed signifies the successful completion of mortgage repayment. It serves as tangible proof that the homeowner has fulfilled their financial obligation to the lender or trustee. This acknowledgement is pivotal in ensuring that the property is no longer encumbered by the mortgage, marking the transition from mortgage holder to property owner.

5. Maintaining Financial Responsibilities

While the mortgage may be paid off, homeowners must remain aware of their ongoing financial responsibilities. Property taxes, for instance, continue to be the homeowner’s obligation, separate from the mortgage. Ensuring the timely payment of property taxes is essential to maintain the property’s status and rights.

What Happens if a Deed of Reconveyance Isn’t Filed?

A Deed of Reconveyance is crucial for property transactions and mortgage repayment, as it establishes a clear title and protects property rights. However, failing to file this document can lead to complications for homeowners and potential buyers.

When a Deed of Reconveyance goes unfiled, it creates title issues, burdening the property with an outstanding mortgage debt. Attempting to sell the property becomes challenging, as buyers require a clear title, free from liens or claims.

Inaccuracies within the document and the absence of a lien release can exacerbate title problems. The title company, during a title search, highlights these issues, complicating property sales.

Ultimately, homeowners must ensure the proper filing and registration of reconveyance deeds, address errors, and verify a clear title when selling their property. Understanding its importance is essential to maintain clear property titles and protect the interests of homeowners and buyers alike.

Reconveyance Deed Format

The Deed of Reconveyance format is as follows-

RECONVEYANCE DEED 

THIS INDENTURE made at ………………… this ………………… day of ……………….., 2000, between A, son of ……………….. resident of ………………… hereinafter called the Mortgagee of the ONE PART and B, son of ………………… resident of …………………. hereinafter called the Mortgagor of the OTHER PART. 

WHEREAS the Mortgagor mortgaged in favour of the Mortgagee the property described in the Schedule hereunder written, by an Indenture of Mortgage dated the ………………… day of ………………… 19 …… registered in the Office of Sub-Registrar of Assurances ………………. under Serial No. ………………… of 19 ….. under date ………………… to secure a loan of Rs. ………………… lent by the Mortgagee to the Mortgagor. 

AND WHEREAS the Mortgagor has paid a sum of Rs. ………………… on account of principal and interest thereon payable under the said Mortgage and is willing to pay the balance of Rs. ………………… for the redemption of the mortgage. 

NOW THIS DEED WITNESSETH THAT in consideration of the payment of Rs. ………………… to the Mortgagee by the Mortgagor paid in full of the principal sum and interest due and owing to the mortgagee on the security of the said Indenture of the Mortgage (the receipt whereof the Mortgagee doth hereby admit and acknowledge and of and from the same doth hereby acquit, release and forever discharge the Mortgagor), the Mortgagee doth hereby retransfer and reconvey to the Mortgagor all that the said mortgage property, more particularly described in the Schedule hereto, to have and hold the same unto the Mortgagor absolutely and free from encumbrances of any kind whatsoever and discharged from all claims, demands and rights of the Mortgagee under the said mortgage and the Mortgagee hereby covenant with the Mortgagor that he has not done or knowing or willingly suffered or been party or privy to any act, deed or thing whereby or by reason of means whereof the said mortgaged property hereby reconveyed or retransferred or intended so to be or any of them or any part thereof may or shall be impeached, affected or encumbered in title, estate or otherwise howsoever. 

AND THE MORTGAGEE HEREBY DECLARES AND CONFIRMS that title deeds he has delivered the title deeds in respect of the mortgaged property and the Deed of Mortgage to the Mortgagor. 

IN WITNESS WHEREOF, the said Mortgagee has hereunto set his hand the day and year first hereinabove written. 

The Schedule above referred to 

Signed and delivered by the within-named Mortgagee

A deed of Reconveyance is your key to property ownership and a clear title. Its absence can hinder property sales, create legal complexities, and keep your property in the lender’s shadow.

To avoid these pitfalls, ensure prompt registration of your Deed of Reconveyance. NoBrokers Real estate experts can expedite the process and help you secure your property rights hassle-free. Whether you’re a seller, buyer, or homeowner, a properly filed reconveyance deed is your passport to a smooth real estate journey. Take action today and safeguard your property interests with NoBroker’s assistance.

Frequently Asked Questions

Partnership Deed and How It Can Protect Your Interests

Before you invest your savings towards a joint business venture, it is advised that you opt for a partnership deed document that can protect your interests in the time of any internal conflicts. Read more to know about the benefits of the partnership deed and its contents. 

It is tough to be a master of all trades. It is a known fact that when different people have different capabilities, and when they come together the task at hand seems more manageable, and the organization, in general, is improved. 

However, running a business is hard. Keeping up with all the departments like production, finance, marketing, etc., is complicated and requires continuous efforts. That’s one of the primary reasons why entrepreneurs forming a strategic partnership is considered the second most effective way to run a business in any country. Ever since time immemorial, merchants and traders have partnered up with a capable counterpart to run their business. However, the thought of putting all your efforts into running a business that your partner at any moment could exploit could be pretty frightening. Hence, the legal practice of signing a partnership deed is considered essential before embarking on any new project together. 

What is a Partnership Deed?

To define a partnership deed, let’s understand what partnership means in legal terms. Section 4 of The Partnership Act, 1932 states that “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.” 

A partnership deed is a legal document written when two individuals come together and decide to run a business, regardless of the profits or losses incurred. This official document helps ensure that both parties, over time, do not end up in some misunderstanding, conflict, or harassment. Also known as Partnership Agreement, Partnership Deed is registered under the Indian Registration Act, 1908, so that there’s no risk of it being destroyed under the care of any specific individual. Anytime both the partners wish to change the terms of the agreement of the partnership deed, they can do so. If the partnership firm somehow ends up in a courtroom, a partnership deed serves as a legal document that can influence the final decision served. 

Even though it is not necessary to sign a partnership deed before starting a business, it is highly recommended by law to protect your interest and assets. 

What are some of the steps of drafting the partnership deed?

Draft agreement – The partners must select an agreement that includes all of the firm’s pertinent facts and partners.

Obtaining E-stamp paper — purchase the required amount of e-stamp paper and have the deed printed on it.

Sign the deed by getting all of the partners’ signatures on all of the pages of the act, recognising the norms and restrictions.

Whether the deed is attested by a notary or registered, it is up to the partners to decide whether they want the deed attested by a notary or registered.

Features of a partnership deed

What Are the Contents of a Partnership Deed? The following are some of the most important partnership deed features:

• Name and address of the partnership and its co-owners — the partnership deed specifies the name under which the business will operate in the future.
• Content of Partnership deed – The partnership deed includes all partners’ names and current addresses in addition to the owners’ names and addresses.
• Nature of the business – the deed specifies the type of business that will be conducted.
• The location of all offices, as well as the head office, shall be listed in the partnership deed.
• Opening date and location – the time and location of the business’s opening must be clearly stated.
• The duration of the partnership, whether for a definite period or a project, is also included in the deed.
• Owners’ capital contributions — the agreement should specify how much money each owner has contributed.
• Profit-sharing ratio — it must state the proportion of earnings received by partners.
• Audit Details – Details of the audit procedure are also included in the cooperation agreement. (The partnership agreement format is easily available on the internet).
• Admission, retirement, or death of partners – the regulations govern the admission, resignation, or death of any partner in the firm in the deed.
• The rights and responsibilities of the partners — the partnership deed outlines all of the partners’ rights as well as their specific responsibilities.
• Settlement of accounts – if the firm dissolves, the partnership agreement also contains the settlement of accounts.

Features And Benefits That Explain Partnership Deed

Here are some distinctive features of a partnership deed that you should know:

1. Partnership businesses must have at least two members. The rights, responsibilities, and liabilities of each partner must be mentioned in the registered partnership deed to avoid litigation in the case of future disputes.
2. Partners must come to a mutual decision before starting the firm. The ratio of the distribution of profit and loss incurred by the organization must be mentioned in the partnership deed to simplify the financial process. 
3. There’s no minimum and maximum limit on the capital invested by each partner of the firm. A partnership deed keeps a check on the salary, commission, and interest rate on the capital earned by each partner.

Making partnerships a piece of cake: Understanding the importance of a partnership deed

Starting a business with partners is an exciting venture, but without a proper partnership deed, it could quickly turn into a recipe for disaster. A partnership deed is a written agreement that outlines the terms and conditions of the partnership, including the rights and responsibilities of each partner. It’s an essential tool for avoiding misunderstandings and settling disputes down the road.

The must-have ingredients of a mouth-watering partnership deed

Just like a cake recipe, a partnership deed has specific benefits of partnership deed that are critical to the success of the partnership. These ingredients include:

• Names and addresses of the partners
• Nature of the business
• Percentage of profit/loss sharing
• Roles and responsibilities of each partner
• Capital contribution of each partner
• Procedure for admission of new partners
• Dissolution of the partnership
• Dispute resolution procedures

What are the characteristics of partnership deed?

A well-crafted partnership deed should also include provisions for profit sharing, decision-making processes, and dispute resolution. It’s crucial to carefully consider the features of partnership deed to ensure a smooth partnership. Here are some key aspects to consider when drafting a partnership deed:

1. Profit Sharing: The partnership deed should clearly specify how profits and losses will be shared between partners. This could be based on a pre-agreed percentage or on the amount of capital each partner has invested in the business.
2. Decision-Making Processes: The partnership deed should outline how decisions will be made in the business. This could include a simple majority vote or a more complex decision-making process that involves all partners.
3. Dispute Resolution: Disputes are inevitable in any business partnership. A partnership deed should include provisions for how disputes will be resolved in a fair and efficient manner. This could involve mediation, arbitration, or even legal proceedings.
4. Duration of Partnership: The partnership deed should specify the duration of the partnership. This could be an open-ended arrangement or a fixed-term partnership with a specific end date.
5. Roles and Responsibilities: The partnership deed should outline the roles and responsibilities of each partner. This could include specific tasks or responsibilities that each partner has agreed to undertake.
6. Termination of Partnership: The partnership deed should specify the circumstances under which the partnership can be terminated, and what will happen to the business assets and liabilities in the event of termination.

NoBroker’s home loan services can help provide the necessary funding for your business venture. To learn more about partnership deeds and their contents, get in touch with NoBroker’s legal experts for a free consultation.

What are the top considerations when starting a project on partnership deed

When embarking on a new business partnership, it’s essential to take the time to “project on partnership deed.” A well-thought-out partnership deed can help ensure the success of the partnership and minimize the risk of conflict. Here are the top considerations to keep in mind when “projecting on partnership deed” and starting a new business partnership:

1. Define the Business Purpose: Clearly define the purpose of the partnership, including the products and services to be offered and the target market. This will help both partners understand their roles and responsibilities and ensure everyone is on the same page.
2. Distribution of Profits and Losses: Decide how profits and losses will be distributed among the partners. This can include a profit-sharing agreement, a salary for each partner, or a combination of both.
3. Decision-Making Authority: Determine who has the final say in important business decisions. This could be one partner, a majority vote among partners, or a specific decision-making process agreed upon by all partners.
4. Duration of the Partnership: Specify the length of the partnership. This can be an indefinite partnership or a partnership with a set end date.
5. Dispute Resolution: Establish a process for resolving disputes between partners. This can include mediation, arbitration, or legal action.
6. Partnership Termination: Define the circumstances under which the partnership can be terminated, such as the death or resignation of a partner, or a disagreement between partners.
7. Capital Contributions: Specify the amount of capital each partner will contribute to the partnership and the conditions under which additional capital can be contributed.
8. Partner Responsibilities: Clearly outline the responsibilities of each partner, including the tasks they will be responsible for and the amount of time they will spend on the partnership.
9. Record Keeping: Establish a system for keeping records of the partnership’s finances, including receipts, invoices, and bank statements.

Regular Review: Schedule regular reviews of the partnership deed to ensure that it still meets the needs of the partnership and to make any necessary changes.

Documents Required to Form a Partnership 

It is mandatory to have two or more willing individuals form a partnership. The Partnership Act, 1932, regulates all partnership registrations. Documents required to form a partnership –

• PAN Card of all the partners
• Address proof of all the partners like Aadhar Card, Voter ID, Driving Licence, etc.
• PAN of the firm
• Address proof of the firm

An official authority must sign the documents required to register a partnership deed between two partners. 

Procedure To Register a Partnership Firm in India

Indian Partnership Act, 1932 is the official Act according to which partnerships are governed. It is entirely up to partners to decide if they want to get their firm registered or not. If they do not register, they won’t be allowed the benefits of a registered partnership firm. The registration process can happen anytime from the start of the business. However, your firm must be registered by law if a legal dispute before the court case is filed. 

For registration of a partnership firm, submit an application and prescribed fees to the Registrar of Firms of the respective state in which the business is operable. You must also include the following documents – 

1. Registration of Partnership Application in Form No. 1
2. Affidavit duly filled and signed
3. The original copy of the partnership deed
4. Ownership proof of the business space or the rental/lease agreement

All partners must sign the submitted application. After checking the contents of the partnership deed that explain the intention of the business firm, the Registrar of Firms will record an entry in the Register of Firms and issue the Certificate of Registration. 

It is also compulsory for all firms to register themselves with the Income Tax Department and receive a PAN Card for official purposes. After the PAN Card is issued, the firm can open a current account in any bank and handle all financial transactions through it. 

Benefits Of Registering a Partnership Firm in India

Here are the benefits of a partnership deed in India

1. Partners of a registered firm are free to file a case against a 3rd party in dispute cases. For example – If the 3rd party claimed goods but is refusing to make payment. However, unregistered firms do not hold that right. 3rd parties can file the case against business partners regardless of the registration status of the firm.
2. If there is an internal conflict between the partners, a registered firm has the freedom to approach the court of law to let them handle the dispute. This could include situations like one partner cheating the other one out of profit or making sole decisions. 
3. Registered firms have the power to claim set-off. If a 3rd party claims that the firm owes them some money, the firm is allowed to state if the 3rd party also owes them some money in return. 
4. Registered firms carry higher credibility than unregistered firms. 

Types of Partnership 

Even though the definition of a partnership deed remains the same, it can be written for three types of partnership. 

1. General Partnership – Governed under The Partnership Act, 1932, the general partnership involves two or more partners who carry equal responsibilities and rights with unlimited liability. 

2. Limited partnership – Also governed under The Partnership Act, 1932, limited partnership means that one partner has unlimited liability while the other has limited liability. Partner with limited liability cannot partake in the firm’s day-to-day decisions and has limited control access. 

3. Limited Liability partnership – Governed according to The Liability Act, 2008, LLP means that each partner holds limited liability that is decided according to the extent of their investment in the firm.

What Happens in the Absence of a Partnership Deed?

If the business partners fail to sign a partnership deed, it means that – 

• Partners are liable to share the profits and losses regardless of the conditions equally.
• Partners do not get a fixed salary at regular intervals.
• Interest earned on the invested capital is not payable.
• In case of mutual consent, partners will get 6% per annum interest on the loans to the firm.
• Drawings made by any partner will not be charged with interest.

Partnership Deed Format

After proprietorship, the partnership is the 2nd most preferred way to run a business. People with different talents and capabilities come together and try to form a business organization that can benefit all partners in the long run. Even though there are numerous benefits of starting a business in partnership with someone, the risk of internal conflict always remains. People often find that they are wary of investing all their savings, time, and effort into a business venture that their partner at any time can exploit. To ensure that such situations do not arise, a partnership deed is signed by all partners along with official authority. A partnership deed, also meaning partnership agreement, is an official document formed to preserve the rights and interests of all partners involved in the business firm. Now that you are one step closer to starting your business, it is time to find the best space!

Get a free consultation from NoBroker’s legal experts

Taking the time to consider these key elements will help ensure the success of your partnership and minimize the risk of conflict. A well-written partnership deed is essential to the success of any business partnership. And, when you’re ready to take the next step and secure funding for your partnership, consider a home loan from NoBroker. Our experts can guide you through the process and help you get the funding you need to grow your business.

At NoBroker, we understand the importance of a solid partnership deed. That’s why we offer free legal consultations to help you craft the perfect partnership deed for your business. Don’t let a lack of knowledge hold you back from making your partnership a sweet success. Reach out to us today!

FAQ’s

Conveyance Deed: Meaning, Importance, Format & More

Conveyance simply means transferring or transporting something from one place to another. In law terms, conveyance means the process of transferring property, assets, title, rights, ownership, etc. from one person to another. If you are purchasing or selling a property, then you must have a deed or contract to do so. A sale is not complete without a valid contract, which is a Conveyance deed. This is required for transferring all property rights to the legal owner.

What is a Conveyance Deed and Why is It Important?

A conveyance deed is the transfer of property rights, titles, and ownership from one person to another, not necessarily always for consideration.

A conveyance deed is necessary to make sure that the buyer, who buys the property has all the right over it and can hold, or sell it on his or her wish. The seller transfers all the legal rights of the property (movable or immovable) to the name of the buyer after signing the conveyance deed for a valid monetary consideration.

What happens if the sale happens without a conveyance deed?

If there is no proper conveyance deed, the buyer will not have any legal right against the property. He cannot claim his ownership. Hence, a conveyance deed is a must for any sale.

Sale Deed vs. Conveyance Deed

A Conveyance deed is often confused with a sale deed. Every sale deed is a conveyance deed, but not all conveyance deeds are a sale deed. This is because a conveyance deed includes gifts, mortgages, exchanges, etc.

A sale is when the seller sells the property to the buyer in exchange for consideration.

What Does It Include?

• The actual markings of the land or property
• Any other rights appended to the property and its use
• All the title owner’s names till the present-day seller
• State of delivery of the property to the buyer
• A memo to declare the consideration received, whether monetary or non-monetary
• Terms and conditions while buying the property for transferring full rights
• Signatures from both the parties

Points to be Noted Before Signing It

• The seller must certify with an encumbrance certificate the property is free from any encumbrance
• The property should not have any open mortgages. In other words, the seller must clear the mortgages on the property or should transfer that to the name of the buyer while signing it. This can be checked at the sub-registrar office
• The dates should be mentioned clearly on when the property will be transferred from the seller’s name to the buyer’s name
• This deed must be signed by at least two witnesses

Conveyance Deed – Procedure

• It will be written on stamp paper
• This document will be presented at the local sub-registrar’s office
• The registrar verifies the deed and approves for registration
• After approval, stamp duty and registration charges must be paid and the conveyance deed will be ready

What are the Charges for the Conveyance Deed?

The charges and the expenses incurred while creating this deed depend on the duties implied by the government. The stamp duties and the registration charges vary from one state to another state.

Documents Required for the Conveyance Deed

Below is the list of documents that are required to create this deed:

• Sale agreement: The seller agrees with the buyer promising to sell the property along with the price terms. This document must be provided while making the deed
• Mutation entries: These are the entries that are present in revenue records that indicate the transfer of ownership of a property. This is also known as a property card
• Location plan
• A survey plan for the property from the revenue department
• Along with the survey plan, include a layout plot plan which is approved by the local authority
• Architecture certificate
• Urban Ceiling Act certification
• The building or structure plan must be approved by the appropriate authority
• Certificate of commencement
• OC or occupancy certificate (if applicable)
• The document that proves the payment of stamp duty
• Proof of registration
• Drafted conveyance deed

Types of Conveyance Deed

• On freehold property: This is a deed where the buyer gets the full authority to enjoy the property. The property will be converted into a freehold and the owner gets the complete right over the property. The conveyance deed will be the final document given to the buyer.
• On leasehold property: The leasehold ownership is given to the owner who has the right only to the built house, meaning the walls constructed on the property and not the land ownership. The landlord will be the owner of the common areas and structures built.
• On the subject to the mortgage: If the property is subject to the mortgage, the buyer can enter the property from time to time and enjoy the building and its premises.
• Relinquishment deed: This form of deed is created at the time of transferring or releasing the rights, titles, or interests of one person in favour of other legal heirs. This usually occurs when the transfer of property happens with common property.
• Gift deed: If the property is gifted by the grantor to the grantee, it is known as a gift deed.

Sample Conveyance Deed

This conveyance made on ………… day of ………… between Mr. ‘X’ hereinafter called as “The Vendor” (which expression shall unless excluded by repugnant to the context be deemed to include his successors in office and assigns) of the one part and Shri/ Smt. / Kumari/ daughter/ wife/ widow of Shri ………… …………. A resident of ………… ………… ………… through his or her attorney Shri/ Smt. / Kumari/ daughter/ wife/ widow of Shri ………… ………….

………… ………… ………… hereinafter called the “Allottee” (which expression shall unless excluded by repugnant to the context be deemed to include his successors in office and assigns) of the second part and Shri/ Smt. / Kumari/ daughter/ wife/ widow of Shri ………… …………. A resident of ………… ………… ………… hereinafter called “The Purchaser” (which expression shall unless excluded by repugnant to the context be deemed to include his successors in office and assigns) of the third party.

WHEREAS the Allottee is a member of the Co-Operative Society which was allotted land measuring ………… sq. mts at ………… ………… vide lease deed dated ……… ……… ……… and registered with Sub-Registrar of Delhi as document no. ……… in book no. ……… volume no. ……… at pages ……… to ……….

WHEREAS vide Allotment letter No. ……… dated ……… Flat No. ………. Block No. ……… situated at ……… ……… ………  (Full particulars of the property may kindly be mentioned here) was allotted to the side allottee herein, subject to the limitation, terms and conditions mentioned therein.

AND WHEREAS the allottee had given the possession Shri/ Smt. / Kumari/ daughter/ wife/ widow of Shri ……….. A resident of ……… ……… ……… has executed the power of attorney on ……… appointing Shri/ Smt. / Kumari/ daughter/ wife/ widow of Shri ………. A resident of ……… ……… ……… as his or her attorney authorizing him or her to sell the property on his or her behalf.

AND WHEREAS representing that the said allotment is still valid and subsisting the said allottee has applied to the vendor through his attorney for grant of revisionary interest of the vendor in the land underneath the flat allotted or leased or conveyed to him or her in favour of the purchaser and the vendor has agreed to convey the revisionary interest in the land underneath the demised property to the purchaser subject to the terms and conditions appearing hereinafter.

Who prepares a conveyance deed?

The conveyance deed meaning, as stated in the article, is legal paperwork of a buyer’s power and ownership transfer. The government has stepped in to make sure that this is a legal transaction. The presence of a lawyer and, in some situations, a real estate agent is required to facilitate this procedure. They allow the two parties to draw the deed in an orderly manner. Their assistance is frequently necessary since they are familiar with the legalities and are aware of the needs. The government receives money or revenue through the stamp duty that is required for this conveyance deed’s charges (registration).

What if the conveyance deed is lost?

If the banker’s negligence causes the transfer deed to be lost, the following procedures must be taken:

• The property owner should file a police report as soon as possible. Keep a copy of the first information report (FIR) on hand in case a potential buyer requests it at the time of sale.
• You can place an ad in the newspaper stating that the transfer deed paperwork has been lost. You may have to wait up to 15 days to find out if someone finds and returns the documents within that time frame.
• You can write an affidavit and have it notarized. It should include all property information, FIR information, and data about the notified newspaper ad.
• The sub-office registrar’s where the property was registered can provide you with a legally certified copy of the conveyance deed. You must pay the indicated fees and submit the required documentation.

Deemed conveyance deed

Even though the developer has not executed the transfer deed, the law considers it to be executed until the state government releases a considered conveyance deed or a deed of conveyance. To get a presumed deemed conveyance meaning, one must submit an application to the appropriate authorities along with the requisite documentation. The developer should also make sure that both parties are present, as the authority law will only make a decision when both parties have been heard.

The documents needed to apply for a presumed conveyance deed are as follows:

• Land documents that are relevant, such as land revenue, municipal records, and the like
• A document of the development agreement between the landlord and the developer for a property
• Each flat has a registered and stamped agreement copy.
• Copy of the approved building plan

Conditions for a deemed conveyance

The following are the requirements for obtaining a presumed conveyance deed format. The listed points are in accordance with conveyance meaning –

• At least 60% of the total number of flats in the building should be sold.
• Before applying for a presumed conveyance, the apartment owners should have formed a cooperative organisation for at least 3-to 4 months.
• Where the builder has either promised or failed to produce a complete conveyance deed, there should be clear communication between this cooperative organisation and the builder.
• Before applying for a presumed conveyance deed, a resolution should be passed on the subject.

The Latest News on Conveyance Deeds

In Pune, there was a conveyance drive till January 31, 2021. In this drive, the Co-Operation department conducts surveys of societies that do not have a conveyance deed.  Maharashtra government brought the concept of deemed conveyance to bypass the builder who fails to execute the conveyance deed and get the deed directly from the registrar.

Anil Kawade, registrar of co-operative societies and commissioner of co-operation has confirmed on launching of a website that boosts the process of executing the conveyance deed for the registered societies. This website will be helping in tracking the applications for registration, and revenue and the department can ease the process. This website is set to be launched in two months.

In New Delhi, Delhi Authority organized meetings and awareness camps with Resident Welfare Associations (RAWs) for the unauthorized colony residents to help them get their ownership.

Nagrik Suvidha Kendra (NSK) has been reopened in New Delhi to help the people of Delhi to receive conveyance deeds for their properties with the Delhi Development Authority (DDA). NSK’s headquarters is Vikas Sadan, INA.

A conveyance deed is a crucial part of any sale, lease, or gift transfer of property. If this deed is not done, or if it is not registered, there are chances of losing the property. Hence, make sure to have your conveyance deed registered.

When it comes to legal issues and paperwork, you need to be extremely careful, even the slightest mistake could mean a huge loss. The best way to avoid such mistakes is to get a team of professionals to assist you. At NoBroker, our experts will guide you and ensure your paperwork is perfect. Click the link below to know more about NoBroker Legal services. You can even drop us a comment below with any questions, and we’ll be happy to help.

Frequently Asked Questions (FAQs)

Property Gift Deed in India: Stamp Duty, Format, Rules & Relation

There is nothing better than getting a gift, and there is also joy in giving. No matter how big or small the gift is, the sentiment is the same. When you are gifting something as large as property or a house, however, there are certain steps that should be followed, this is done so that the new owner has clear titles and documentation of the property and how they came to own it. Gift deeds have no become increasingly popular because of the governmental documentation that comes along with it.

Gift Deed meaning and why you need to know about it?

When it comes to the Transfer of Property Act, the Gift Deed is the unsung hero of the real estate world. It may not have the fanfare of a property purchase or sale agreement, but it sure plays a big role in transferring ownership of a property. So, buckle up and let’s dive into the world of Gift Deeds!

What exactly is a Gift Deed?

A Gift Deed is a legal document that is used to transfer ownership of a property from one person to another as a gift. It’s a simple yet powerful way to show your love and appreciation for someone by giving them a gift that they can cherish for a lifetime.

How is it different from Sale or Purchase Agreement?

Well, unlike a Sale or Purchase Agreement, a Gift Deed doesn’t involve any exchange of money. It’s a pure act of love and generosity from one person to another. It’s also different from a Will as it doesn’t come into effect after the donor’s death, it transfers the ownership of the property immediately.

How to get a Gift Deed done?

Getting a Gift Deed done is a simple process, just follow these steps:

• Choose the right stamp paper value as per the market rate (Source: Legal Desk)
• Fill out the Gift Deed form with all the relevant details
• Get it signed by the donor and two witnesses
• Get the Gift Deed registered at the Sub-Registrar’s office
• Breathe a sigh of relief, you’ve successfully transferred ownership of the property!

Is a Gift Deed valid forever?

The validity of gift deed depends on various factors such as the age of the donor, the relationship between the donor and recipient, and whether it’s executed properly. However, it’s a legally binding document and holds up in a court of law if challenged.

If you’re looking to transfer ownership of a property as a gift, NoBroker can assist you with all the legal formalities involved in the process. From getting the right stamp paper value to getting the Gift Deed registered, we’ve got you covered!

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A gift has to meet certain criteria –

• It has to be tangible
• It has to be well defined existing movable or immovable property
• It has to exist in the present and can’t be a future property
• It has to be transferable

Gift Deed vs Will

A will and Gift deed are two different legal instruments. 

A will is a document empowered by the law of succession, which comes into power only after the death of the testator. It can be revoked many times, and need not be registered.

Meanwhile, a gift deed comes under the ambit of Income tax and cannot be revoked, unless under some specific circumstances. A gift deed of property must be registered under section 123 of the Transfer of Property Act 1882 and Section 17 of the Registration act of 1908.

A will is comparatively cheaper because for a registered gift deed you will have to pay stamp duty and registration charges.

Drafting a Gift Deed – format for Gift Deed

Like any legal document, the Gift Deed also needs to follow a certain format and meet certain requirements to be considered valid. This is why the best policy to follow is to have a lawyer assist you in drafting a gift deed. The deed must state-

• What is being gifted and from whom to whom as well as their relationship whether gift deed in blood relation or not.
• It should look like a contract between donor and donee where there is free and open giving and receiving of the gift.
• It should state that the donor is giving the gift out of free will and not being forced, it should also state that there is no exchange of money in return for the gift.
• The Gift Deed should also mention that the donor is not bankrupt and should be above 18 years of age.
• It should mention the date and location where the registration will take place.

Accepting a Gift Deed:

This is as important as giving the gift, the donee or receiver of the gift must accept it by signing the Gift Deed. There can’t be much delay as the gift and the Gift Deed is considered invalid if the donor dies before the donee accepts the gift.

Registering a Gift Deed or Requirements for Gift Deed:

In accordance with Section 123 in The Representation of the People Act, 1951, the gift cannot be passed on to the receiver unless and until it is registered. What you should keep in mind while registration –

• The cost of registration is calculated based on the value of the gift
• The Deed must be signed by the donor
• The Deed should have two witnesses and it has to be attested by both of them
• The donor and donee must be present in the office of the Registrar
• Valid Identification documents (passport, driving license etc.) and PAN card must be submitted to the Registrar
• Stamp duty and Transfer Duty must be paid

What’s the format of a Gift Deed?

The format of a Gift Deed is pretty standard, it includes details such as the names and addresses of the donor and the recipient, description of the property being gifted, the date of the Gift Deed, and signatures of the donor and two witnesses. (Source: Ministry of Law and Justice)

NRI Gift Deed Format

The NRI Gift Deed format is as follows:

KNOW ALL MEN BY THESE PRESENTS that I, _____________ S/o Sh.___________ r/o _______________, transfers voluntarily, the property bearing no.___________ situated at _______________ (more particularly described in the schedule annexed hereto), the estimated value of which is Rs._____________ (Rupees_____________ only) to my daughter Smt.____________ w/o of Sh._________________ (hereinafter referred to as “the donee”) To Hold the same to the donee absolutely forever. I further declare that the said gift has been made by me out of my natural love and affection for the donee and the same has been accepted by the donee.

IN WITNESS WHEREOF, I have executed this deed this ________ day of __________.

Witness:

1.

2.

DONOR

I, Smt. ______________, the donee hereby accept the gift of the said property.

DONEE

Common questions about the Gift Deed:

Who is eligible for a gift deed?

You can gift anyone. While minors can’t be a donor, they can be a done, they are able to receive the gift if they have a guardian who will accept the gift on their behalf. Once the minor becomes an adult, they can either accept the gift or return it.

Read: Everything You Need to Know About Conveyance Deed

Who can create a Gift Deed?

Anyone can create a Gift Deed, as long as they are not minors or are being forced to create one. You must also have valid identification proofs like Adhar, passport etc.

What documents are needed to create a gift deed?

For a Gift Deed to be valid it needs to be registered, for registration, you will need to hand over documents like passport, PAN, driving license etc. to the Registrar.

Is stamp duty payable on gifted property?

Yes, you must pay stamp duty and transfer duty on the deed of gift property. The cost of Stamp duty will vary in each state.

Is there a Tax levied on Gift Deed?

There is no tax on Gift Deeds in the hands of the done as per the Income Tax Act if they are close relatives (mother and daughter etc.). If the done is not a close relative, then there will be a tax levied if the total of all the gifts is valued at more than Rs.50,000.  If it is more than this amount, it will be taxable without any threshold exemption.

If you are a close relative receiving the gift, then the first time you will pay tax is when you sell the property. This will be counted as short term (less than 36 months) or long-term gains. If it is a short term, you will pay tax as per the bracket it falls under; if it is long term you will have to pay 20% tax. If you don’t wish to do so, you can invest this money by buying residential property or capital gains bonds of Rural Electrification Corporation (REC) or the National Highway Authority of India (NHAI).

Read: Here’s Why Sale Deed Is So Important

Important clauses in a Gift Deed

• It should be stated explicitly in the Gift Deed format in word that the donation is made out of love and affection and that no money or other kind of payment is involved. It makes no difference how tiny the payment is; it is not considered a gift.
• The property you want to give away must be in your possession, which means you must own the title to it. When giving a gift, the property must already exist; you cannot give something that you may acquire in the future.
• Any form of coercion, undue persuasion, intimidation, or fear should be avoided during the transfer. The gift should express unequivocally that the transfer is voluntary and that the transferor intends to do so.
• It is necessary to provide a full description of the property. It should include information on the structure, address, colour, area, and location, among other things. These are the requirements expected by the property gift deed rules.
• Whether the donor and donee are blood relatives or not, the link between them is crucial. Some state governments also give stamp duty exemptions for presents presented to blood relatives. Please note that this is different from the gift tax exemption in blood relations.If the gift comes with any additional rights or obligations, this condition must be indicated. For example, any rights to a subsequent sale or lease of the property of the exchange deed. Also, gift deed property can be sold without any conditions attached. 
• The Gift Deed is inextricably linked to a clear declaration of Donee rights. It comprises the rights to peacefully enjoy the property, to make changes to the property, to receive rents, and to profit from the property.
• A delivery clause refers to the action (express or implicit) that confirms the delivery of property possession.
• Although not required, it is recommended. It will aid in the prevention of future issues. It must be stated explicitly, not implied. This clause must be agreed upon by both the donor and the donee. Make sure you have a proper gift deed registration.

Who can be a donor/donee?

A person who transfers immovable property is known as a donor. A donor can be someone who is of sound mind and capable of agreeing. A minor cannot donate since he or she is unable to engage in a contract.

A donee is someone who accepts a gift or transfer that has been offered to him. A minor can be a donee, but the gift must be accepted on behalf of the donee by the donee’s guardian. In the case of an onerous present (one that comes with strings attached), a minor can either accept or return the gift after reaching adulthood.

Documents required for Gift Deed registrations

After you’ve double-checked that your Gift Deed is completed, and witnessed you’ve paid the stamp duty and registration fees required by your state. You’ll also need a few extra documents, such as —

• PAN Card  
• Aadhar Card 
• Original Gift Deed 
• ID Proofs, such as Driver’s Licence, Passport, etc.
• A document such as a sale deed establishes the donor’s ownership of the property.
• Other property-related agreements that you may have entered into

The list is not exhaustive; depending on your state, you may require additional documents such as certificates relating to the value of your property. If the gift comes with any additional rights or obligations, this condition must be indicated. For example, any rights to a subsequent sale or lease of the property.

What type of properties can be gifted?

Gift deed rules in India state that particular types of property can be gifted. They are listed below –

• A movable or immovable property
• A transferable property
• An existing property
• A tangible property

The Gift Deed has various advantages that can be attributed to it. Gifts are advantageous since they are made within the donor’s lifetime. If you want someone special to look after your possessions or if you need to aid someone, you can transfer your property as a gift. Also, if there is a good probability that legal issues could arise in the future, some people would create a Gift Deed to avoid such disputes.

The gift deed of immovable property formats for from father to son, gift deed blood relation format, and more etc. are all available online. 

Can a Gift Deed be revoked/cancelled?

It is impossible to rescind a donation that has been made and registered per the law. After it has been approved, it becomes the property of the donee. The giver cannot cancel the deed on his or her own. A legal Gift Deed is also one in which the parties have agreed that the deed will be revocable in part or whole by the donor’s will.

There are some circumstances in which gifts can be cancelled under Section 126 of the Transfer of Property Act, 1882. The cancellation of the Gift Deed is included in the revocation, and the donor retains control of the property. The terrain is –

• If the donor and donee agree that the gift will be withdrawn if certain specified events occur or do not occur, the gift will be cancelled. The important thing to remember here is that the donor should not have any control over the occurrence of such an incident. In provisions of the Gift Deed, both parties must have agreed to such a condition.
• The terms should not be immoral, illegal, or repugnant in the eyes of the property.

So, if the donation was made with the foregoing grounds in mind, it can be cancelled. If the donor passes away, his heirs have the right to have the deed revoked.

What are the gift deed clauses and what is included in them?

A Gift Deed can have various clauses, but some of the common ones include:

• Clause specifying the description of the property being gifted
• Clause specifying that the gift is made out of love and affection and not under any coercion or undue influence
• Clause specifying that the recipient accepts the gift voluntarily and without any obligation
• Clause specifying that the donor has full rights to transfer the property and it’s not encumbered in any way

What are the tax implications of gifting a property?

Section 56(2)(x) of the Income Tax Act of 1961 states that if a person gets an amount of money without consideration over fifty thousand rupees after April 1, 2017, the entire sum is taxed under the heading “Income from other sources.” The following individuals are exempt from the provisions of the clause:-

• from any family member; or
• on the occasion of the individual’s marriage; or
• as a result of a will or inheritance; or
• in anticipation of the payer’s or donor’s death, as the case may be; or from any municipal government
• any trust or institution referred to in clause (23C) of section 10; or any fund, foundation, university, or other educational institution, hospital, or other medical institution, or any trust or institution referred to in clause (23C) of section 10; or
• from or on behalf of any trust or institution that has been registered under sections 12A or 12AA; or
• sub-clause (iv), sub-clause (v), sub-clause (vi), or sub-clause (via) of clause (23C) of section 10; or by any fund, trust, or institution, or any university or other educational institution, or any hospital or other medical institution referred to in sub-clause (iv), sub-clause (v), sub-clause (vi), or sub-clause (via) of clause (23C) of section 10; or

Stamp duty on gift deed in Delhi in blood relation

The following are important considerations to remember when registering a gift deed in Delhi:

• If the donee is a woman, stamp duty is 4%; if the donee is a man, stamp duty is 6%. Even if the gift is made to a family member such as a son, daughter, wife, husband, sister, brother, or other relatives, this tax must be paid.
• The registration fee is 1% of the entire Consideration value, plus Rs. 100/- for pasting costs.
• At the time of presentation, both the donor and the recipient must be present in the registrar’s office, together with identity documents such as a PAN card, an election card, a passport, a driving licence, and so on.
• During the Presentation before the Sub Registrar for the Registration of Gift Deed, two witnesses must be present, as well as identity documents.

Gift deed registration fees

State	Stamp duty for gift deed
Delhi	Women: 4%Men: 6%
Gujarat	4.9% of the market value
Karnataka	Family members: ₹1,000- 5,000Non-family: 5.6% of the land value
Maharashtra	Family members: 3%Other relatives: 5%Agricultural land/ residential property: ₹200
Punjab	Family members: NILNon-family: 6%
Rajasthan	Women: 4% and 3%Men: 5%SC/ST or BPL: 3%Widow: NoneTo wife: 1%Immediate family: 2.5%
Tamil Nadu	Family members: 1%Non-family: 7%
Uttar Pradesh	Men: 7%Women: 6%
West Bengal	Family members: 0.5%Non-family: 6%Above ₹40 lakh: Surcharge of 1%

Can a Gift Deed be cancelled or changed?

Once the Gift Deed is registered and executed, it cannot be revoked or altered. This is unless the donor has made a provision to do so. It can also be revoked if the donor and do agree on certain terms that allow the Deed to be revoked. At times, the donor might also mention that the property or house will be given back to his(donor’s) family upon the death of the done.

Gift deeds not only fulfil their purpose of a gift but are also well documented. If you have more questions or are looking for assistance related to Gift Deeds, feel free to drop us a message. NoBroker is here to assist you, you get a home, rental agreement, legal assistance, loan assistance and a lot more.

A comprehensive guide to Gift Deed and why NoBroker is your best bet for real estate

A Gift Deed may seem like a small and simple document, but it packs a punch when it comes to transferring ownership of a property. So, make sure you have all your ducks in a row, choose the right gift deed stamp paper, fill out the form correctly, get it signed and registered, and voila! You’re done! And don’t forget to use NoBroker for all your real estate needs.

Sales Agreement: Process, Format and More 2024

You’ve finally set your sight on the house that you want to buy, you heave a sigh of relief. The hard part is over, but your legal formalities are not. It’s the one thing that separates you from being the legal or rightful owner of your new home so sadly, you’re not done just yet. Before you sign your name on any agreement to sell property or buy property, you must know what the sales agreements are all about. Let’s take a look at the prevalent guidelines and regulations for sales agreements in 2024.

Meaning of a Sales Agreement: What is a Sales Agreement?

A sales agreement is an important legal document that contains all the agreed-upon terms between the buyer and seller for the sale of the property. Section 54 of the Transfer of Property Act, 1882 (TP Act) clearly outlines the specific criteria that must be met for a transaction to be considered a valid sale of immovable property in exchange for something of value. To establish a legally binding sale agreement, all the essential elements listed below must be satisfied:

• The property in question, which forms the core of the conveyance or transaction.
• The seller, who must be the previous owner and the one transferring the property.
• The buyer, who is the individual acquiring the title from the property’s seller.
• The consideration, which refers to the amount paid or promised to be paid by the buyer to the seller. This amount can either be paid in full, promised to be paid at a later date, or a combination of both.
• The actual transfer of property ownership from the seller to the buyer.

Furthermore, the terms outlined in the Contract Act govern all contracts, which also necessitate that both the seller and the buyer meet certain qualifications. Specifically, they must:

• Be of a legal age.
• Be of sound mental capacity.
• Not be prohibited by any court judgment or legal statute from entering into a contract.

For a sale contract to be considered valid and enforceable, it is crucial to provide accurate and comprehensive information about both the seller and the buyer, as well as the property being sold. Any inconsistencies or discrepancies in the identity or description of the property can potentially jeopardize the seller’s ownership rights. In cases where the consideration is agreed to be paid in the future, whether in full or in part, the buyer can safeguard against potential future disputes or claims by obtaining a confirmation deed from the seller after fulfilling all necessary payments.

Why is Sales Agreement Important?

No matter who you are buying or getting the property from, a written seller agreement or contract to sell a house is the only way to legally establish the authenticity of the property’s ownership. Without this sales agreement contract you could end up in major trouble, this property sale agreement document ties you to the property that you’re purchasing.

Clauses That go Into an Agreement to Sell

These clauses are basic points that make the real estate sales contract a successful one. They will contain important factors such as –

• Description of the property and what’s included, such as What property—such as appliances and lighting fixtures
• The final cost of the property
• Payment method and date
• Contact details of the seller and the buyer
• Tax
• Maintenance (for apartment buildings)
• Indemnity clauses and more…

An agreement to sell has a lot of clauses that need to be covered. Each of these clauses is needed for it to be considered a valid and complete sales contract for houses. A sale agreement definition in its entirety in a physical document must include the following information:

• Names of the buyer and seller, their age, and residential addresses
• Date and place of execution of the agreement
• Competence of parties to enter into the agreement
• Rights and liabilities
• Details and documents of how the seller came to own the property
• Location and description of the property
• Amount, time and mode of payment
• Timelines for the rest of the processes and division of responsibilities
• Title deed
• Period of completion of a transaction
• Expenses to be met and who and who will meet the cost of the transfer

Clauses to Pay Extra Attention to in a Sales Agreement

Some property agreements might have clauses that you need to take a closer look at. These might not be in your favour so, watch out for-

• As is, where it is – you’ll get the property in the exact condition it’s in, and the seller will not make any repairs.
• No access to property – you won’t be allowed to see the property until full payment is made.
• Right of way – you might need to let other people use sections of your property e.g., if you live on the ground floor you need to let those living on the above floors have certain access.
• Lease– the buyer and the lessee should not be affected by the sale if the property you’re buying is leased out.
• Mortgage – look for details on who settles and loans and how.
• No Dues – To show that the seller has no existing dues against his property.
• Dispute Resolution and Jurisdiction Clauses– The seller should hand over all the title deeds of the property to the purchaser within 15 days of the date of the agreement. This is done for scrutiny of the title; the opinion of the seller and advocate will be final.
• Clause with regards to Title Verification -If the seller’s title to the property is not approved by the buyer, the seller has to refund any token money the buyer has paid him in accordance with the sale purchase agreement. This has to be done within 7 days, or the seller will have to pay an interest on this amount (12% per annum). 

When it comes to buying a house that’s still being constructed look for-

• Delivery date – don’t agree to vague time frames, look for exact dates
• Tax payment – does the builder cover taxes in the final amount or do you have to pay them?
• Right to alter specifications – if the house is still under construction, the builder could alter it any time before the handover.

What is the Difference Between a Sales Deed and a Sales Agreement?

Wondering what the difference between a sale deed and a sale agreement is? You’re not alone, a lot of the time buyers get confused between the two and end up making very costly mistakes. Let’s break down the difference between the sale deed and the sale agreement so that this does not happen to you.

A Sale Agreement can be registered as a sales deed. A sales agreement as discussed contains certain terms that the seller and buyer have agreed to, when the sale will take place and how the transaction will occur. In other words, a sales agreement will contain everything that’s important for a sale to take place, a Sales Deed however is only executed when the property transfer happens. This document is what you need to show the transfer of ownership of the property from the seller to the buyer. If you want to know more about a Sales Deed Vs. Sale Agreement, then you can read about it in detail here. 

Sales Agreement for Commercial Property

A property purchase agreement, or a Sales agreement, for residential property or commercial property is considered critical. A sale agreement of property of any kind serves the same purpose as commercial property or residential property purchase. The documents required for the sale and purchase of commercial property include –

• Sales Agreement
• Sales Deed
• Mother Deed
• Building Approval Plan
• Khata Certificate and Khata Extract
• Encumbrance Certificate (EC)
• Betterment charges receipt
• Tax Receipts (up to date)
• Stamp Duty

As you can see, the agreement for the sale of immovable property formats such as a home or office space is not much different from movable ones, as we do need receipts and pay taxes for any purchase/sales.

Process of Executing a Sale Agreement in 2024

A sales agreement is a standard agreement for the sale of real estate, so the process will remain the same in all the states but for a few minor differences. This process is a guide and will take you through what you need to keep in mind while executing a sales agreement.

• A sales deed needs to be executed on requisite stamp paper. In Karnataka, the stamp duty for a sales agreement is 0.1% of the deal. The maximum amount payable is Rs.20,000 for residential PROPERTY and Rs.50,000 for commercial.
• The stamp duty is to be paid for by the buyer at the SRO (Sub-Registrar’s office) through a DD or Bankers Cheque drawn in favour of the Sub-Registrar. The document will then be franked with the official’s signature and a seal.
• If there are no changes in the sales deed and sales agreement, then you will not have to pay any additional stamp duty when you register your Sales Deed.
• A sales agreement does not have to be registered, but it can be done if the buyer and seller both agree that it needs to be made.
• While signing the agreement it is best to use black ink and your full signature. The signatures of the buyer and seller are required at the bottom of each page and on the last page where it is marked.
• If there are changes to be made you need to use a whitener and then make the correction. Then you need to sign across any changes that have been made.
• If there are joint buyers or sellers, then all the people involved need to sign the documents as mentioned in point 5.

How Does a Sale Agreement Help You?

As a buyer there are plenty of details you need to look into, such as checking documents, getting your finances in order and making time during your work week to get all this done. We make this process easier and stress-free. You get regular updates and you are kept in the loop, this is all done at your convenience.

You won’t have to stand in long queues and deal with the hassle of getting your sales deal registered. You won’t have to worry about covering critical information in your sales deeds or missing out/errors in your document as our lawyers will do it all. This complete assistance makes the process of buying a home faster, simpler and tension-free.

As you can see, this simple sales agreement is a key document to buy and sell both residential and commercial properties. Without this document, a legal and official sale can’t take place.

Sales Agreement Format

If you’re making a sales agreement there is a particular sales agreement format that you need to follow. It is important that your agreement follows the same flow and contains all the same points. simple example for an agreement to sell, you can use the one below if it is for an apartment, for an independent house you will need a different sales agreement sample, or you can modify this one with the correct property type. Remember, this is just a sale agreement format for resale flat, you will still need to get it checked by a professional to be fully protected from any liability, they can spot mistakes that can help you save time and energy. Take a look at the house sale agreement format:

THIS AGREEMENT made at ………………….. this ………….. day of ………….., 2024 between <NAME>, son of ………………………… resident of …………………… hereinafter referred to as the Vendor of the ONE PART and B, son of ………………. resident of ……………….. hereinafter referred to as the Purchaser of the OTHER PART.

WHEREAS the Vendor is absolutely seized and possessed of the land bearing Plot No………………………. situated at ………………………………… and hereinafter referred to as the said land and more particularly described in the Schedule 1 hereunder written;

AND WHEREAS the Vendor proposes to develop the said land and for that purpose obtained the permission of the Competent Authority under section ……….. of the Urban Land (Ceiling and Regulation) Act vide his Order No ……………………. dated …………………..;

AND WHEREAS the Vendor has submitted the building plans to the ……………….. Municipal Corporation, which have been approved by the ……………….. Municipal Corporation vide letter No ………………………. dated …………. subject to certain conditions laid down in the said letter;

AND WHEREAS the Vendor has started the construction of the buildings as per the building plans approved by the ……………….. Municipal Corporation enclosed herewith at Annexure 1;

AND WHEREAS the Vendor has agreed to sell one apartment on the …………… floor in the building No…………….. being constructed and having the specifications mentioned in the Schedule 11 hereunder written at a price of Rs ………………. (Rupees …………………………… subject to the terms and conditions hereinafter appearing.

AND WHEREAS the Purchaser has inspected the documents relating to the land, the order of the Competent Authority, site plans approved by the ……………….. Municipal Corporation and is satisfied with the Vendor’s title to the said property and the site plans of the proposed buildings;

AND WHEREAS the title of the Vendor to the said property has been certified to be clear, marketable and free from encumbrances by M/s. …………………………… Solicitors and Advocates………………. and a copy of the said title certificate is hereto annexed at Annexure-II ;

AND WHEREAS the Vendor has agreed to sell and the Purchaser has agreed to purchase the Apartment No……………..on the…………. floor in the building No……………….. hereinafter referred to as the said Apartment on the following terms and conditions.

NOW THIS AGREEMENT WITNESSETH AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:

(1) The Vendor shall construct the said building on the said plot of land, more particularly described in the Schedule 1, in accordance with the plans, designs and specifications approved by the ……………….. Municipal Corporation and which have been seen and approved by the Purchaser and kept by the Vendor at the office of M/s. …………………. Architects at ……………………. for inspection. The Vendor shall be entitled to make such variations and modifications as he may consider necessary or as may be required by the ……………….. Municipal Corporation of the Government of …………….. or any local authority.

(2) The Vendor agrees to sell and the Purchaser agrees to purchase the Apartment No…………………….. on ……….. floor in the building No ……………. of Carpet Area admeasuring …………. sq. metres as delineated on the plan thereof hereto annexed and marked Annexure Ill and thereon shown surrounded by green coloured boundary line at or for a sum of Rs ……….. (Rupees ……………………. ). The Purchaser agrees that out of the said amount of Rs ………………. to be paid by him to the Vendor, a sum of Rs………… has been paid by the Purchaser to the Vendor on the execution of these presents (the payment and receipt the Vendor doth hereby admit and acknowledge) and the balance will be paid by instalment as follows:

1. Rs …………………….. on or before ……………………..

2. Rs …………………….. on or before ……………………..

3. Rs …………………….. on or before ……………………..

4. Rs …………………….. being the final balance on the delivery of

the apartment by the Vendor to the purchaser.

the amounts payable under these presents are not paid within the time stipulated, the Purchaser will be liable to pay interest at the rate of 18% per annum from the due date of payment to the date of payment.

(3) The Vendor shall deliver the possession of the apartment to the Purchaser on or before ………………. day of ……………, 2000. The vendor shall obtain the completion and occupation certificate in respect I the said apartment from the ……………….. Municipal Corporation. The purchaser shall take possession of the apartment within one week of ) a receipt of the notice of the Vendor to the Purchaser that the said apartment is ready for use and occupation and that the completion certificate and occupation certificate has been obtained from the ……………….. Municipal Corporation;

Provided that the Vendor shall be entitled to reasonable extension time for delivery of possession of the Apartment on the aforesaid ate, if the completion of the said building is delayed on account of non-availability of steel, cement, other building material, water or electric supply or on account of the war, civil commotion or act of God or any notice, order, rule, notification of the Government, ……………….. Municipal Corporation and/or other public or competent authority or on account of non-issue of building completion or occupation certificate – water or electricity connection or on account of any order of any Court affecting the construction work of the building. The Vendor will deliver the possession of the apartment to the Purchaser only if the Purchaser has paid all the amounts payable by him under this Agreement to the Vendor and if he has duly observed and performed all obligations and stipulations contained in this Agreement and on his part to be observed and performed.

(4) The Purchaser hereby declares and undertakes that he shall have no claim, save and except in respect of the said Apartment hereby agreed to be purchased by him and the Vendor shall continue to be entitled to the property in all the structures on the said land, open spaces, parking places, lobbies, staircases, lifts, terrace, etc. until all the apartments are transferred to the purchasers and the Declaration of Deeds of Apartment is executed and the condominium is formed as provided in the ………….. Apartment Ownership Act.

NoBroker is here to make buying or even renting a house as easy as possible. Visit our site to find out how we can assist you. From finding a house to helping with the entire legal process, NoBroker has what you need. The best part is that buying a house with us becomes seamless and stress-free.  For more legal services like Sale Agreement drafting click below.

FAQ’s

Understanding Lease Deed: A Guide for Landlords and Tenants

Imagine you’re a tenant searching for the perfect apartment, or you’re a landlord looking to rent out your property. In both scenarios, a lease deed becomes a crucial document that solidifies the rental agreement between the two parties.

It provides legal protection, establishes rights and obligations, and ensures a smooth and transparent leasing experience for everyone involved. Whether it’s a residential, commercial, or industrial property, understanding the ins and outs of a lease deed is essential to safeguarding your interests and maintaining a harmonious landlord-tenant relationship. 

In this blog, we will explore the significance of lease deeds, examine their essential components, and offer insights to help you navigate the world of leasing with confidence.

What is a Lease Deed?

A lease deed, also known as a “deed of lease agreement,” is a legally binding document that formalizes the rental arrangement between a landlord (lessor) and a tenant (lessee). It outlines the terms, conditions, and rights of both parties regarding the leasing of a property. 

The lease deed specifies important details such as the duration of the lease, rent amount, payment terms, maintenance responsibilities, and any additional clauses or provisions agreed upon by both parties.

Understanding key terminologies is essential when dealing with a lease deed. Familiarize yourself with these terms:

• Lessor – The Lessor is the legal owner of the property that is the subject of the lease.
• Lessee- The Lessee is the individual who acquires the rights to use and enjoy the property under lease from the Lessor.
• Duration- The time or period for which the rights to use and enjoy the property are given is referred to as the duration. The lease can be for a certain period, either explicitly or implicitly, or it can be for an indefinite period.
• Premium or Rent- Generally, it is considered to give the right to use and enjoy the property. Rent is a term used to describe the payment of money or any other valuable items regularly or at given specified times or intervals.

How to create a lease deed?

Creating a lease deed in India involves a legally binding agreement between a lessor (landlord) and a lessee (tenant) for the lease of a property. Here’s a general outline of the process to create a lease deed:

Stages In the Creation of a Lease Deed

Extensively there are three types of lease deeds- a registered lease deed, an unregistered lease deed, and a perpetual lease deed. Each of the steps involved in completing the Lease Deed can be divided into the following categories:

1.  Negotiation Stage

The negotiation stage is the first step of the transaction, and it takes effect immediately after the Lessee has selected a property that is appropriate for his purposes. Each of the parties involved will need to address the many business elements of the transaction, including the length of the lease, the amount of consideration, the method of payment, and other related issues. It is more important to concentrate on the business elements of the transaction at this point than the legal ones. 

2. Preliminary Documentation Stage

Once the commercial aspects of the transaction have been agreed upon, the parties involved can enter into an Agreement to Lease or, preferably, a Memorandum of Understanding, which will record the commercial aspects of the transaction and the general duties and obligations of the respective parties.

3. Title Investigation or Due Diligence Stage

The purpose of this stage is to determine whether or not the Lessor has legal title to the property and whether or not the Lessor has the power to diminish the property in the Lessee’s favour via the execution of the lease contract.

A comprehensive examination of the title deeds is followed by confirmation with government records via a Title Search at the appropriate agency and, ultimately, the publication of Public Notices inviting objections.

4. Drafting Payments

This step entails the payment of the premium by the Lessee to the Lessor, and it is also known as the execution and registration stage. They have the option to pay the discussed amount of money, take possession of the property, and sign the Lease Deed all at the same time. 

Even though it is not required, it is common practice for two witnesses to execute the Lease Deed to sign and date the document. As soon as the document has been signed, it can be submitted for registration at the Office of the relevant Sub-Registrar of Assurances, who has authority over the property in question. 

5. Registration Stage

Immediately after the lease deed has been registered and the property has been transferred to the Lessee’s possession, it is recommended that the different governmental and semi-governmental organizations with jurisdiction over the property be informed in writing of the transfer of ownership. This would guarantee a seamless transition and make the process of submitting applications and obtaining licenses reasonably straightforward.

Lease Deed Format

By creating a lease deed, both landlord and the tenant can ensure clarity, transparency, and protection of their rights and obligations during the lease term. The lease deed provides a comprehensive record of the agreement, covering essential details and terms agreed upon by the lessor and lessee.

Download: You can download the sample sale deed format in Word document by clicking the following link:

[Lease Deed Format for Residential Property]

Stamp Duty on Lease Deed 

Stamp duty is imposed by the Indian government and it applies to various legal documents, including lease deeds. The exact amount of stamp duty to be paid is determined by factors such as the value of the property being leased and the state in which the property is located. 

In India, the Indian Stamp Act of 1899 governs the stamp duty on lease deeds and provides specific rates for different types of lease agreements.

State	Residential	Commercial
Andhra Pradesh	6%	8%
Assam	6%	8%
Bihar	6%	8%
Chhattisgarh	6%	8%
Delhi	5%	8%
Goa	5%	6%
Gujarat	6%	8%
Haryana	7%	12%
Himachal Pradesh	7%	10%
Jammu and Kashmir	6%	8%
Jharkhand	6%	8%
Karnataka	5%	7%
Kerala	8%	12%
Maharashtra	5% (male)  6% (female)	0.25% (up to 5 years)1% (5-10 years)2% (above 10 years)
Manipur	6%	8%
Madhya Pradesh	7.5%	11%
Meghalaya	6%	8%
Mizoram	6%	8%
Nagaland	6%	8%
Odisha	6%	8%
Punjab	6%	8%
Rajasthan	6%	8%
Tamil Nadu	7%	10%
Telangana	5%	7%
Tripura	5%	7%
Uttar Pradesh	6%	8%
Uttarakhand	6%	8%

Key Considerations for Creating a Legally Binding Lease Deed

• A lease creates a separation of ownership and control, where the Lessor retains ownership rights but excludes themselves from enjoying possession during the lease period.
• Commercial property leases often utilize a lease deed format to document the agreement, which must be jointly signed by the Lessor and Lessee to express consent to the lease conditions.
• The lease deed serves as a legally binding document that courts may refer to as evidence in case of disputes between the Lessor and Lessee.
• In India, lease deeds must be printed on Non-Judicial Stamp Paper to be legally binding, with specific formats for different types of properties such as shops, houses, commercial properties, agricultural lands, and residential properties.
• The stamp duty value or cost of the stamp paper for the lease agreement is determined by the state and the rent amount specified in the agreement.
• Lease deeds can also be registered with the Sub-Registrar Office having jurisdiction over the leased property. Typically, two copies of the lease deed are executed, with each party retaining an original copy.
• The use of the term “demise” in a lease deed or other lease instruments implies the Lessor’s guarantee of providing peaceful enjoyment of the property to the Lessee.
• The Lessee has the right to remain in possession of the property until the lease is legally terminated through appropriate legal action.

Difference Between Lease Deed and Lease Agreement

A lease deed and a lease agreement are both legal documents that outline the terms and conditions of a rental agreement between a landlord and a tenant. However, there are some key differences between the two documents.

Difference	Lease Deed	Lease Agreement
Definition	A lease deed is a legal document used to transfer ownership rights of a property from the lessor (landlord) to the lessee (tenant) for a specified period. It is a formal and registered document.	A lease agreement is a contract between the lessor (landlord) and the lessee (tenant) outlining the terms and conditions of the lease, but it may or may not be a registered document. It can be a written or oral agreement.
Legal Nature	Lease deeds have a formal and permanent legal status. They must be executed on stamp paper and registered with the appropriate authority to be legally valid and enforceable.	Lease agreements may be formal or informal, and their legal status depends on whether they are in writing, on stamp paper, and registered. Unregistered agreements may have limited enforceability.
Transfer of Rights	A lease deed transfers the ownership rights of the property to the lessee for the agreed lease period. The lessee gains possession and full control of the property during the lease term.	A lease agreement grants the lessee the right to use and occupy the property for a specified period, but the ownership remains with the lessor. The lessee does not have full ownership rights.
Registration	Lease deeds must be registered as per the Indian Registration Act. Registration provides legal validity, prevents disputes, and allows the document to be admissible as evidence in court.	Lease agreements may or may not be registered, depending on the state’s laws. Registration, if done, provides additional legal protection, but unregistered agreements may still be valid to some extent.
Stamp Duty	Lease deeds attract stamp duty, and the amount varies from state to state, based on the property’s location and type of lease (residential, commercial, etc.).	Lease agreements may or may not attract stamp duty, depending on the state’s regulations. Unstamped or inadequately stamped agreements may have limited evidentiary value.
Applicability	Lease deeds are typically used for long-term leases, such as those exceeding 11 months. They provide more security and legal protection for both parties.	Lease agreements are commonly used for short-term leases, such as those for 11 months or less. They offer flexibility and are less cumbersome for shorter durations.
Witness and Attestation	Lease deeds often require witnesses and notarization for additional legal validity.	Lease agreements may or may not require witnesses or notarization, depending on local laws and preferences.
Revocation and Termination	Lease deeds are usually irrevocable during the lease term unless both parties agree to terminate the lease under specific circumstances.	Lease agreements are often revocable or renewable at the end of the agreed-upon lease term, allowing both parties to renegotiate or terminate the agreement.

Is a legal deed registration mandatory?

The Indian Registration Act, of 1908 governs the registration of various types of documents, including deeds, agreements, and other instruments that involve the transfer or creation of rights in immovable property.

The Act specifies that certain types of documents must be compulsorily registered to be valid and legally enforceable. Section 17 of the Registration Act provides an exhaustive list of documents that require mandatory registration, such as:

• Deeds of sale or transfer of immovable property.
• Gift deeds relating to immovable property.
• Lease agreements for terms exceeding one year.
• Mortgage deeds.
• Partition deeds.
• Exchange deeds.
• Power of Attorney relating to the sale or transfer of immovable property.

Note:  the Act mandates registration to provide legal sanctity, authenticity, and public notice to the documents. 

The registration process involves submitting the document to the office of the Sub-Registrar of Assurances or the sub-registrar’s office having jurisdiction over the property. The parties involved in the transaction, such as the buyer and seller, are required to be present during the registration process or may appoint an authorized representative through a Power of Attorney.

How can NoBroker help?

A lease deed must be drafted and scrutinized more thoroughly than a lease or tenancy of residential premises or tenancy because there are various aspects of commercial transactions and commercial use of a property. Drafting a fair lease deed can be confusing! 

That is why you should consult the legal advisors available to you at NoBroker who will guide you through the entire process. If you have any questions, just click on the link below this article and our team will be in touch with you soon.

FAQ’s

Rectification Deed – Rectify Mistakes in Your Sale Deed

During property transactions, paperwork is crucial. However, minor errors like misspelt names, incorrect area measurements, or typographical mistakes in survey numbers can undermine the legal validity of your documents. To rectify these errors promptly, you need a rectification deed—a supplementary document that nullifies mistakes and ensures accurate property records.  

A Rectification Deed, also known as a correction deed, is mentioned in Section 17 of the Indian Registration Act, 1908. With the help of a correction deed, you can correct documentation errors in the existing sale deed, transfer deed or other property-related documents. You can also add important information or delete non-relevant property details with a correction deed. However, the correction of the sale deed cannot be done to change the nature of the transaction or the parties’ original intention. 

Having the correct sale deed details is vital for proving ownership of your property. Read on to know more about how you can rectify these errors.

What is a Rectification Deed?

Property purchase documents contain a lot of crucial details. Therefore, you must correct any minor discrepancies in these details, like spelling mistakes or numerical errors, immediately. The way to do it is by creating a rectification deed. Apart from typing mistakes, the correction of the sale deed may also include the addition of important information or the deletion of irrelevant details.

Also, any correction in the registered sale deed has to be done in the presence of both parties. By both parties, we mean the buyer and the seller. If the previous owner is no more, you can contact the legal heir of the previous owners for rectification. But what if you cannot trace the legal heir? A rectification deed without a seller is possible in those cases. You can apply for correction with subsequent documentation. 

What you need to know about Rectification Deed

Here are some aspects of the rectification deed that you need to keep in mind.

1. The error in the original document must be real and not be done on purpose. Also, the mistake must be a mistake of fact, not a mistake of law.
2. The rectification deed must be registered if the original deed was registered. 
3. Everyone who was a part of the original deal must help get the rectification deed registered.
4. Parties who don’t want a rectification deed to be carried out can ask for help under Section 26 of the Specific Relief Act, 1963.
5. You can’t change the sale deed unless the seller is there and signs it. If he refuses to make the change, you will have to start the legal process.

What kind of Mistakes can be Corrected with a Rectification Deed

The error should be very clearly mentioned while applying for a rectified property document

The rectification deed gives you the power to correct mistakes in the property documents.

This is how you should approach a Rectification Deed

1. The error should be very clearly mentioned while applying for a rectified property document
2. You can only rectify or nullify minor factual errors in your correction deed. 
3. No legal mistakes can be corrected with this deed. 
4. A correction deed is possible only when the error is genuine and unintentional. Moreover, all parties must agree to the rectified act.

Conditions for a Rectification Deed in India

A rectification deed is a legal document used to correct errors in an original property document, such as a sale deed or gift deed. The conditions for a rectification deed in India are as follows:

• Both parties involved in the original document must agree to the corrections.
• The errors in the original document must not be substantial and must be minor.
• The rectification deed must be executed on a non-judicial stamp paper of appropriate value.
• The rectification deed must be registered with the appropriate authority in the same jurisdiction as the original document.

It is important to note that a rectification deed cannot be used to change the fundamental terms of the original document. It can only be used to correct minor errors that do not affect the intent of the original document.

If one party does not agree to the corrections, the matter can be taken to court for resolution. However, this process can be time-consuming and expensive. It is always advisable to resolve such disputes amicably through negotiation and mediation.

What is the time limit for executing a rectification deed?

As per the statement of Sanjeev Chanda, an attorney at Meghalaya High Court, there is no specific timeframe mentioned by the law for correcting errors or mistakes in any document. If any party involved in the transaction discovers inaccurate information or discrepancies in the title document, it is important to notify the other party and rectify the mistake by creating a rectification deed.

Considering that these documents act as evidence of your ownership of an asset, it is crucial to promptly correct any errors. Neglecting to rectify these mistakes may put your position as the owner at risk.

Rectification Deed Format

Any rectification of the sale deed must follow a format that should contain the relevant details, including the error

The deed of rectification format must mention the following details

The deed must mention the following details:

• Personal information of the concerned parties
• Details of the Original Deed
• The discrepancy that needs to be rectified the concerned parties have to provide an undertaking stating that there are no changes to the original format and nature of the transaction.

A Sample Format for Deed of Rectification

This deed of rectification is executed at _____________, on _____________, between ______________, son/daughter of ____________, residing at ______________, hereinafter referred to the Rectifier/Vendor, which term includes its successors and assigns of the one part;

And

_____________, son/daughter of ___________________, residing at, __________, hereinafter referred to as purchaser/buyer, which term includes his heirs, executors, administrators, representatives and assigns of the other part

WHEREAS the property was sold by the rectifier in favour of the purchaser herein in and by sale deed dated and registered as Document No. of Book1 volume in the file of the Sub Registrar of __________ hereinafter referred to as the principal deed.

WHEREAS in the principal deed dated ________ in line _______of page number ________ the name of the purchaser was wrongly typed as _______ instead of ______. 

WHEREAS this typographical error has come to the knowledge of the above-said purchaser and requested the rectifier/vendor to rectify the same.

THE DEED OF RECTIFICATION WITNESSETH AS FOLLOWS:

That is the Principal Deed dated _______ in line _________ of page No. ________ the name of the purchaser of the property MENTIONED is wrongly typed as __________ and is rectified as ______________ by this rectification deed.

This rectification deed confirms that except for the change aforementioned, the principal sale deed remains in full force and effect.

That no consideration has been received by the rectifier/vendor for the execution of this Rectification deed.

Name of the purchaser

(In the principal deed)

_________

Name of the purchaser

(Rectified by this deed of rectification)

___________

Property market value: Rs __________

In witness whereof, the RECTIFIER/VENDOR and the PURCHASER have set their hands on the day and month year first above written in the presence of:

WITNESS 

__________________

RECTIFIER

________________

PURCHASER

___________________

You can refer to this correction deed format. It’s easy to follow and can be applied under various circumstances.

Rectification Deed Stamp Duty

For concerned parties, the rectification deed stamp duty depends on whether the original sale deed was registered or not. If not registered, you can null the previous deed and draft a new one.

In the case of registered deeds, you have to pay Rs 100 as stamp duty. However, if there is a mistake in the original Document regarding any area change, then stamp duty will differ along with the deed of rectification cost.

How to Use a Deed of Rectification for Name Change?

It is important to note that a deed of rectification for a name change can only be used for minor errors in the name. If there are major errors or discrepancies in the name, a rectification deed for name change may not work and a separate legal process may be required.

How to make a Rectification Deed? 

There are two ways to create a rectification deed.

1. At the office of the sub-registrar

If either party finds a mistake in the sale deed, they must go to the sub-office registrar’s where the deed was originally registered, in person. 

With all the necessary proof, they will have to fill out an application and send it to the office to ask for changes to the document. 

If big changes need to be made to the original document, both parties will need to bring two witnesses each for the rectification deed to be registered.

You can also carry out a rectification deed online. To get started, you will need to go to the website of the State land revenue department.

2. Create a Rectification Deed Online

Now visit the state official websites and apply for a rectified deed from the comfort of your home

Now, you can book appointments, fill out and pay correction deed stamp duty online. Each state has their official website for maintaining the rectification deed procedure online. Visit the concerned state website and apply for a correction deed.

Here are the official sites for some states:

1. West Bengal: www.wbregistration.gov.in
2. Maharashtra: gras.mahakosh.gov.in/igr/
3. Bihar: http://bhumijankari.bihar.gov.in
4. Gujarat: https://services.india.gov.in
5. Delhi: http://revenue.delhi.gov.in
6. Karnataka: https://kaverionline.karnataka.gov.in
7. Tamil Nadu: https://tnreginet.gov.in

Procedure for Rectification Deeds

Once a mistake is identified, both parties involved must know and agree verbally to rectify the error. All parties should be present at the Sub-registrar’s office, where the correction deed is created and registered. 

You have to apply for it and submit all the supporting documents. If there is any significant change like a change in property location, a witness from both parties should be present.

Now you can quickly rectify any minor mistake in your property documents with the help of a Rectification Deed. However, most of us are not well-versed in a lot of legal terms and implications.

Limitations of the Rectification Deed

1. Cannot be used for changing legal aspects of the documents such as the nature of the transaction or the initial intention of both the parties involved
2. Errors that come under the jurisdiction of the Sub-Registrar’s office 
3. A complete change in the property location, which in turn changes the jurisdiction
4. Correction Deed stamp duty errors

In conclusion, rectifying mistakes in property documents through a rectification deed is crucial to ensure accurate records and maintain the legal validity of your documents. However, legal issues such as these can be a hassle, especially for individuals who are not familiar with legal terms and implications. This is where NoBroker can Help. Contact NoBroker’s legal services to help you rectify errors efficiently and ensure accurate and reliable property records.

FAQ’s

The House Construction Agreement: The Key to a Successful Dream Project

Constructing a new home is a sizable financial commitment that calls for meticulous preplanning and coordination and a rock-solid legal basis. Therefore, it is essential to have a house construction agreement carefully drafted to safeguard the interests of both the homeowner and the contractor and ensure that the work is carried out without a hitch. 

In this article, you will learn about the importance of a house construction agreement, its key components, and the different types of agreements. Additionally, the article guides creating a house construction quotation and a sample agreement template to help you confidently embark on your construction project.

What is a House Construction Agreement?

A home construction agreement is a legally binding document that communicates the terms and conditions of a construction project between a homeowner and a contractor. This document is known as a “house construction agreement.” This important agreement serves several important purposes, including ensuring that the building process goes smoothly and protecting the interests of both parties involved.

The scope of the project, location, work specifications, materials, and quality of craft, are all defined very specifically in the agreement. Therefore, it is possible to reduce the likelihood of disagreements and misunderstandings occurring during the building process if all parties involved in the project have a clear understanding of the requirements and expectations of the project.

The payment terms are another essential component of a contract to construct a house. Financial disagreements between the homeowner and the contractor, which could slow down the project’s progress, can be avoided if the terms and schedule of payment are clearly outlined.

The risks that are normally associated with building projects can also be reduced through the use of a properly drafted house construction agreement. It does this by defining the rights and obligations of both parties, thereby ensuring that each side is accountable for the responsibilities that fall under their purview.

If there is a disagreement or a breach of contract, the agreement regarding the house construction can be used as a foundation for legal action and resolution. In addition, it offers a structure for dealing with problems that may crop up during the project, such as delays, change orders, or warranty claims.

Importance of a House Construction Agreement

The importance of a house construction agreement must be balanced when embarking on a construction project. As a legally binding document between the homeowner and the contractor, the agreement serves as a foundation for a successful project by providing clarity, protecting interests, and mitigating risks. 

1. Clarity and mutual understanding

Location, design, materials, and quality of construction are just some of the aspects of a home-building project that should be specified in detail in the contract. The agreement ensures that all parties are on the same page by outlining the scope of the project and their respective responsibilities. 

By reducing the likelihood of disagreements and miscommunications occurring during building, everyone involved can save time, energy, and money.

2. Protecting interests

The homeowner and the builder can rest easy knowing their interests will be protected by a well-thought-out home construction agreement. In doing so, it ensures that all parties are held to account for their commitments by outlining their respective rights and obligations. 

The parties’ mutual interests are safeguarded in the contract, laying the groundwork for trust essential to the completion of any building project.

3. Establishing payment terms

Conflict on construction sites regarding financial matters often stems from disagreements over money. By outlining the payment schedule and terms in detail, a house construction agreement helps reduce the likelihood of disputes arising during construction. 

In addition, the agreement aids in ensuring that the parties are on the same page financially by outlining the payment method, due dates, and any penalties for late payments.

4. Mitigating risks

There is always a chance that a construction project will run over budget, over schedule, or have other quality control problems. A written home construction agreement that lays out the terms and conditions of the project and includes clauses for change orders, warranty claims, and dispute resolution can help reduce these dangers.

 In addition, the agreement’s focus on foreseeing and mitigating potential risks should help keep construction on schedule and trouble-free.

5. Legal recourse

In the event of a dispute or breach of contract, a house construction agreement serves as a basis for legal action and resolution. By providing a legal framework for addressing issues that may arise during the project, the agreement helps to ensure that both parties have recourse to seek a resolution. 

This legal protection is essential for both homeowners and contractors, as it ensures that their respective rights are upheld and that they have the means to address any grievances that may arise during the project.

6. Professionalism

Both parties’ professionalism and dedication to the project are on display in a well-written home construction agreement. It shows that the homeowner and the contractor take their roles seriously and are dedicated to completing the project successfully. With this professionalism, you can build trust and create a pleasant working environment that benefits both of you.

Key Components of a House Construction Agreement

To ensure a solid foundation for your construction project, it is essential to include specific key components in the house construction agreement between the owner and the contractor.

1. Project Details: The agreement should clearly define the project’s location, the scope of work, and specifications, including the materials used, the artistry quality, and unique features or requirements.

2. Contractor Details: This section should include the contractor’s name, address, and contact information, as well as any relevant licences, qualifications, or certifications.

3. Schedule: The agreement should outline the project timeline, including milestones, completion dates, and any penalties for delays.

4. Payment Terms: Clearly define the payment schedule, including the total contract amount, down payment, progress payments, and the final payment. Specifying the payment method and any late payment penalties is also essential.

5. Change Orders: The agreement should establish a process for handling changes to the project scope, including approvals, cost adjustments, and schedule modifications.

6. Warranty: Include a warranty clause outlining the contractor’s responsibility to rectify defects in quality or materials within a specified period.

7. Termination: Specify the conditions under which either party may terminate the agreement, such as breach of contract, insolvency, or failure to meet performance expectations.

8. Dispute Resolution: The agreement should define the process for resolving disputes, such as mediation, arbitration, or litigation.

9. Governing Law: State the governing law applicable to the agreement and the jurisdiction for any legal disputes.

10. Signatures: The agreement must be signed by the homeowner and the contractor, with each party retaining a copy for their records.

Types of House Construction Agreements

There are several types of house construction agreements, depending on the nature of the project and the relationship between the owner and the contractor.

Labor Contract Agreement for Construction of House

Worker conditions are prioritised in this type of contract. Details about the workforce to be employed, their responsibilities, and their compensation are spelt out, as are the terms and conditions between the homeowner and the contractor. 

The homeowner typically provides the project’s materials in exchange for the contractor’s assurance that the work is completed per the terms of the contract. If you’re a homeowner wanting more say in your renovation, this agreement is for you.

Agreement for Construction of House with Material

The scope of this contract extends to the provision of both labour and materials. The contractor is responsible for providing all necessary materials and labour to complete the project according to the agreed-upon specifications. 

A comprehensive list of materials, quality, and quantities is typically included in such an agreement for clarity and open communication about the project. Homeowners who want the contractor to handle every aspect of their building project should consider this type of contract.

Agreement with Contractor for Construction of House

This contract covers everything from initial conceptualisation to final clean-up. In most cases, a general contractor will coordinate the efforts of everyone involved in the construction process. 

The contractor’s obligations, terms of payment, and project details are all laid out in the contract. Homeowners who prefer to delegate all aspects of their construction project to the contractor and want a single point of contact should consider a design-build contract.

Turnkey Construction Agreement

The contractor in a turnkey construction agreement takes full responsibility for delivering the completed project to the homeowner. In this model, the contractor is responsible for every process stage, from conceptualisation to execution to quality control. 

The house is now ready for the owner to “turn the key” and move in. Turnkey agreements are the way for homeowners who would rather not get their hands dirty during construction.

Creating a House Construction Quotation

Before finalising the house construction agreement, the contractor usually provides a detailed quotation outlining the project’s estimated costs. The quotation should be clear, concise, and include the following elements.

• Project description: A summary of the project’s scope and specifications.
• Itemised costs: A detailed breakdown of the project’s materials, labour, and other expenses.
• Taxes and fees: Include applicable taxes and fees, such as permits or inspections.
• Payment terms: State the payment schedule, including down payments, progress payments, and the final payment.
• Validity period: Indicate the time frame for which the quotation is valid, typically 30 to 60 days.

Sample Agreement for Construction of House

To ensure a solid foundation for your construction project, it’s crucial to have a well-drafted house construction agreement. Here is a sample agreement template that you can use as a starting point.

[Homeowner’s Name]

[Homeowner’s Address]

[City, State, Zip Code]

[Date]

[Contractor’s Name]

[Contractor’s Address]

[City, State, Zip Code]

Re: House Construction Agreement

Dear [Contractor’s Name],

This House Construction Agreement (the “Agreement”) is entered into as of [Date], by and between [Homeowner’s Name] (“Homeowner”) and [Contractor’s Name] (“Contractor”), collectively referred to as the “Parties.”

Scope of Work: The Contractor agrees to perform the construction work (the “Work”) described in Exhibit A, attached hereto and incorporated by reference.

Contract Price: The Homeowner agrees to pay the contractor a total contract price of [Amount] (the “Contract Price”), subject to adjustments as provided in this agreement.

Payment Terms: The Homeowner shall make payments to the contractor as follows.

1. Down Payment: [Amount] upon execution of this agreement.
2. Progress Payments: [Amount] upon completion of each milestone as outlined in Exhibit B, attached hereto and incorporated by reference.
3. Final Payment: [Amount] upon completion of the Work and receipt of all required lien releases, warranties, and other documentation.

Schedule: The Contractor shall commence the Work on [Start Date] and complete the Work on or before [Completion Date], subject to adjustments as provided in this agreement.

Change Orders: Any changes to the scope of Work, Contract Price, or Schedule shall be subject to a written change order signed by both Parties.

Warranty: The contractor warrants that the Work shall be free from defects in artistry and materials for a period of [Warranty Period] from the completion date.

Termination: Either Party may terminate this agreement upon [Number of Days] written notice if the other Party breaches any material term or condition of this agreement.

Dispute Resolution: Any disputes arising out of or relating to this agreement shall be resolved by [Mediation/Arbitration/Litigation] following the laws of [Governing Law and Jurisdiction].

Entire Agreement: This Agreement, together with all exhibits, constitutes the entire agreement between the Parties and supersedes all prior agreements, understandings, and representations, whether written or oral.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Date first above written.

[Homeowner’s Name] [Contractor’s Name]

Homeowner Contractor

Exhibit A: Scope of Work

[Detailed Description of Project]

Exhibit B: Schedule and Milestones

[Milestones and Completion Dates]

Any home-building project will benefit greatly from a professionally drafted house construction agreement. A well-drafted contract can protect your investment and ensure a smooth construction process by outlining the roles of the homeowner and the contractor. 

Before beginning a construction project, familiarising yourself with the different kinds of agreements, the parts that make them up, and the best methods for laying solid legal groundwork is important.

NoBroker can assist you in finding trustworthy contractors, give legal counsel, offer customisable templates, and offer conflict resolution services. These services may be quite helpful in making sure that your house-building agreement is thorough, enforceable, and satisfies all of your criteria.

FAQ’s

NoBroker Rent Agreement

Rental Agreements continue to be an unresolved pain point, whether you are a tenant or a homeowner. The main trouble with a rental agreement is the learning curve involved in it. 

There is no shortage of rental agreement guide pages on the internet.  But the rental agreement is a legal document. Getting the proper information on how rental agreements work and how they are processed would mean doing a lot of research.

If you are a tenant, you might have been troubled by landowners who are reluctant to draft rental documents. But keep in mind – a rental agreement is always beneficial. It will protect your rights as a tenant against unlawful evictions and arbitrary increases in rent and maintenance.

The Two Types of Rental Agreements

Rental agreements are either 

1. Lease agreements or
2. Tenancy agreements.

Tenancy agreements are applicable for rentals which are less than 11 months. Meanwhile, a lease agreement is typically used when the agreement lasts more than a year. You can read more about the differences between various kinds of rental agreements here.

Why you must Draft a Rental Agreement

The rental agreement is the basis of cooperation between the landowner and tenants. Having a drafted rental agreement ensures that the rights of both parties are protected.

More often than not it is the landowner who drafts the terms and conditions of the rental agreement. This agreement is handed over to the tenants who have no choice but to sign—the tenant might have already finalised the apartment by the time the agreement has been handed over. 

Here’s the worst-case scenario, if you are a tenant: 

The rental agreement ends up having unfavourable terms and conditions which could affect your relationship with the homeowner.

Sure, the state governments are amending tenancy laws in an attempt to instil trust between landlords and tenants, but it is safer to be diligent as a tenant because your diligence can save you money.

The Indian real estate industry has already started to switch to digital mode. 

The tech-savvy homeowner and tenant have ample options to ensure that their mutual expectations are met. 

Why you should use NoBroker Rental Agreement?

NoBroker guarantees you the best online rental and leases agreement services in your city. Here’s what makes NoBroker’s Rental Agreement service stand out from the competition.

1. Doorstep Delivery

NoBroker legal Services assures you of quick completion of your rental agreement. Once completed the document will be delivered to your doorstep, saving you any inconvenience. You don’t have to visit any Government office for any of these procedures. All the while you can track your document delivery through the NoBroker app.

2. Lowest Prices in the Market without any Stress

In addition to super-fast doorstep delivery, the NoBroker Rent agreement guarantees the best legal documentation at the lowest-ever market prices. You get genuine documents that are legally valid in a court of law.

3. Quick and Easy Process

Whether you are a tenant or a landowner, you can easily draft a rental agreement using the NoBroker app or via the NoBroker website using a few simple steps.

4. Secure Payment Channel

NoBroker Pay is a secure payment channel that you can use for your rental-related payments. NoBroker Pay, in addition to being a quick and easy way to pay, allows you to earn rewards and cashback on your credit cards every time you use them. 

You can access this from within the NoBroker app. 

How to create an E-Stamped Rent Agreement using NoBroker

All you need to do is fill in your details online as per your requirements and submit the draft. The NoBroker Legal Services Team will print out the agreement on stamp paper and have it delivered to you in 3–4 days.

If you want to draft a rental agreement using NoBroker Services you can do that by following these steps–

1. Go to the NoBroker home page and click on Rental Agreement from the legal services section.

2. On the Nobroker Legal services page, choose your city from the dropdown.

3. Scroll down and click on E-Stamped Agreement.

4. Choose the Stamp Paper amount as per the Government regulations, select the Agreement Date, and choose whether you are a Tenant or an Owner.

5. From Add on Services, you may choose to add 

• Notarized agreement–You can add this if you want to get your signatures authenticated by a notary public.
• Personalised assistance– You will get assistance for drafting and preparing the custom clauses for your agreement.
• Doorstep delivery– for a nominal charge you will get your agreement delivered to your doorstep.
• E-sign Agreement – You can get your agreement is-signed if any of the parties involved in the agreement stays in a remote area.

6. Click Save and Continue once you have chosen the required services.

7. In the pop-up, choose your payment method.

8. Enter your property details

9. Click on Save and Continue.
10. Enter the Landlord details and click Save and Continue.

11. Similarly enter the Tenant details and click Save and Continue.

12. Fill in your Contract Details such as agreement duration, agreement starting date, rent amount and deposit amount.

13. Cross-check the information you entered. Click on Preview to view the final agreement. You can use the Share button to generate a link that you can share with the other parties.

14. Select your delivery address and click Pay once you have verified the quotation.

15. In the secure checkout, menu choose your payment option and make your payment.

Once you have made the payment, you will receive updates via whatsapp and email. The Rental agreement will be sent to the address in 3-4 working days.

NoBroker Rental Agreement Cost

The price for drafting a rental agreement varies from access to India. However, the general fees can be around ₹1000–2000.

NoBroker provides you with a pay-per-service charge model. The cost you have to pay for NoBroker rent agreement will depend on the services that you opt-in for. Here’s a quick look at the services available.

NoBroker Rent Agreement Add-on Services

1. Notarized Agreement: Have a Notary Public verify the signatures on your agreement. 
2. Personalized Assistance: Help you prepare the agreement and write the clauses to fit your needs.
3. Doorstep Delivery: Courier fees for deliveries outside of Bengaluru.
4. E-Sign Agreement: Get the agreement signed electronically if any part of it is in a remote area.

NoBroker rental agreement charges will be a sum of the costs for the services that you opt-in for. The price quotation will be lesser than the market prices.

The NoBroker Legal Services team can guide you through the process. You can call them on +91 9243012802, to help you draft a NoBroker e-signed rental agreement.

FAQs

Tenancy Agreement and the Types Of Tenancy Agreements that can be made in India?

In India, renting a home could appear like a two-way procedure. Picking out a rental unit is the first step. Moving in and negotiating the rent are the next two steps. The signing of the rental contract is the subject of the third and final phase. If this agreement is not properly performed, it may become a bone of disagreement in the event of a dispute.
Then, what are tenancy agreements and their types? Through this blog, let’s understand the specifics of the tenancy agreement.

What is a Tenancy Agreement?

The landlord-tenant relationship is formally stated in a tenancy agreement. 

Understanding the tenancy agreement meaning:

The meaning of a tenancy agreement spells down the specifics of a lease or rental arrangement between the renter and the building owner. You will be permitted to occupy a property as a tenant per the rules outlined in the landlord and tenant agreement. For leasing or renting a property, there exist many tenancy agreements.

The terms and circumstances of a rent or lease union between two parties are spelt out in an official tenancy agreement document .A person permitted to inhabit a property in compliance with the standards outlined in the rental agreement is known as a tenant (Tenancy Agreement governed by the Tenancy Act India). However, various kinds of contracts are available for renting and leasing a piece of property. The Indian Easement Act governs leave and licence agreements, whereas the Rent Control Act governs rental agreements. Landowners should be aware that they may be held liable if a tenant harms society as a whole and there is no written tenancy agreement.

Free Tenancy Agreement Sample

Here are the Important points included in a typical landlord and tenant agreement:

• The renter and landlord’s names and addresses.
• Landlord’s and the tenant’s signatures.
• Rental fee per month.
• Deposit for security.
• Costs for maintenance.
• Length of stay
• Rights and obligations of the landlord.
• Rights and obligations of the renter.

The documents required for registration of a commercial assured tenant agreement and an online tenancy agreement are:

A. Landlord

• 2 photographs the size of a passport.
• Aadhaar card.
• Proof of identity

B. Tenant

• 2 photographs the size of a passport.
• The Aadhaar card.
• ID for voting.
• A passport is required for foreigners entering India.

You do not necessarily need to purchase the stamp paper if the e-stamping option for tenancy contracts is available in your state. To find out if your state provides this service, log on to the Stock Holding Corporation of India Ltd (SHCIL) website. Currently, the e-stamping of rental agreements is permitted in Assam, Gujarat, Himachal, Karnataka, Bombay, Delhi-NCR, Tamil Nadu, Nainital, and Uttar Pradesh.

Lastly, we discuss the tax levied on a rental tenancy agreement:

Rent agreements must be registered, and the city in which it is registered will determine the stamp duty that must be paid. You can pay this sum by acquiring the stamp paper you owe the government. For leasing agreements with terms of up to five years, stamp duty in Delhi is 2 per cent of the average yearly rent. For lease agreements lasting up to 11 months in Noida, stamp duty is 2 per cent of the annual rent.

Tenancy Agreement Types in India

Basic information found in a rental tenancy agreement includes the name of the property’s owner, the renter, the conditions of the Contract, and the quantity of rent due during the tenancy. The following three forms of tenancy agreements are common in India.

• Rent agreement
• lease contract
• Agreement for Leave and Licence

Rent agreement 

A rent agreement is a legally binding contract that unites a landlord and prospective renter who want to occupy a certain property temporarily. The contract includes information such as the names of the parties involved, the property’s description, the agreed-upon rent amount, late payment fees, a grace period, the amount of the security deposit, the facilities that the tenant is permitted to use or not, the availability of parking, maintenance and repairs rights, and property insurance, among many other things.

In India, the rental contracts are normally for a shorter period—11 months. A clear agreement, such as a lease, allows for a hassle-free resolution between the parties. It is not required to register a rental agreement. Registration should not be confused with notarisation, which solely serves to certify a document and has no legal force.

Lease Agreement

Landlords prefer to lease out the property to avoid volatility in steady income. A lease agreement is typically necessary if the tenancy period is more than 90 days. The tenant is granted the right to use the property in question for the specified period under the terms of the lease agreement, which is an agreement between the landlord and the tenant (generally more than 12 months). In contrast to a rent agreement, a lease often ties the landowner and the renter for a specified time. Certain leases last 99 years. A lease also generates a transferable interest in the house and rights that can be inherited.

The mutually agreed-upon lease agreement ensures that, unless otherwise specified, the lessee will not evict the property. An alternative is to deliver a legal notice to the lessee. For a lease deed to be admissible in court, it must be stamped and certified. One drawback of leasing agreements is that if the asset’s market price improves over the predetermined lease time, the lessor may lose out on incremental income.

Agreement for Leave and Licence

Contrary to lease and rent arrangements, the Leave and Licence Agreement is regulated by the Indian Easement Act of 1882. The licence holder occupies the territory of the licensor under a leave and licence agreement. The property is, however, issued following the Leave and Licensing deal and not on the premise of tenancy, so if this permission were not granted, the property owner would be void. With this structure, evicting the occupier is simpler than with a lease. These contracts never give the right to occupy space; they only give “permission”. 

The conventional landlord-tenant relationship is not established, and the property owner always has the advantage of evading the occupant at any time. A lease agreement creates a right (interest) in the estate and is transferable; however, a leave and licence agreement does not, which is how this document differs from a lease agreement. While a licence does not grant such rights, a lease does create inheritable rights. A leave and licence agreement permit one to inhabit the property, but a lease establishes exclusive rights to the real estate in question. Furthermore, unlike leasing agreements, these contracts are revocable.

Sample Indian Rental Agreement Format

This Rent agreement is hereby executed at ____________ on this ________ day of ___________ between:

________________ son of _________________ R/o ______________________ (hereinafter referred to as First party/landlord) this term would include his heirs, successors, legal representatives and assigns etc.

AND

_________________ son of _________________, resident of _________________________________ (hereinafter called the tenant/Second party) of the other part, which expression shall mean and include his heirs, successors, legal representatives and assigns etc.

The premise is in the possession of the owner who is the first party with residential House of Flat No. _____________________________________ and he has agreed to let out the said flat as monthly rent basis to the second party /tenant

NOW THIS AGREEMENT WITNESSETH AS UNDER: –

1. The monthly rental of the agreed premises is agreed and fixed at Rs___________/-(Rupees) per month which does not include water, electricity and other incidental charges.

2. This rental period is effective from 1st on the agreed month till 11 months. 1st day of _______________
3. The tenant should deposit a sum of Rs. ____________/- (Rupees __________ only) as the security amount, which will be refunded /adjusted at the time of vacating the said premises.
4. The tenant should use the premise for residential purposes only and not for commercial purposes.

5. The tenant has no rights given to sub-let or art with a certain portion of the premise to any person.
6. In case the tenant fails to pay rent for two months or more, then the landlord can ask the tenant to vacate the premise.

7. The tenant has to pay the electricity bills month on month on his responsibility and this amount is not included in the monthly rental ___________.
8. The tenant has to maintain the rental premise properly and keep all the fittings and fixtures that the second party shall not damage the fittings and fixtures and maintain them properly. In case there is any damage, he has to bear the repair charges himself.
9. The rented premise should be maintained the way it has been let out to him. He cannot make any construction or alterations to the residential premise without the permission of the landlord.

10. The landlord or any authorized person on his behalf has a right to inspect the rented residential premise any time at a mutually convenient time.

11. In case the tenant decides to vacate the premise upon completion of the tenancy period then both the parties (landlord and tenant) should serve one month’s notice to each other.

12. Whatever terms and conditions are mentioned in the rental agreement is abiding to both parties and these terms and conditions are final. These agreed conditions are final and irrevocable.

This agreement is signed and agreed by both the parties on this day, date, month and year in the presence of witnesses at _____________.

WITNESSES: –

1- FIRST PARTY

2- SECOND PARTY

Difference Between Tenancy Agreement and Lease Agreement

We frequently witness clients treating tenant agreements and lease agreements as the same thing. An agreement for a business facility called a lease is made between a landlord and a tenant. To ensure no misunderstandings or problems throughout the duration, leases are normally highly specific about the tenancy terms. The landlord and tenant’s obligations (“warranties”) are specifically outlined in the lease. The landlord further promises to act responsibly when considering a transfer of the leases to a third-party provider during the term and to comply with the Health & Safety at Work Act 2015.

The Residential Tenancies Act of 1986 (“Act”) governs tenancy agreements for tenants of residential properties. Tenancy agreements that outline either party’s responsibilities are typically less thorough or exacting than the warranties stated in leases. Preserving the property in an acceptable condition and allowing the renter to use it quietly are two of the landlord’s principal duties. Periodic tenancies, which last for longer than 90 days, and fixed-term tenancies are the two different kinds of tenancies. Periodic tenancies will be the subject of this essay.

Advantages And Disadvantages

Tenancy and lease agreements each have benefits and drawbacks. Rent increases quickly, allowing the landlord to renegotiate the conditions of the deal more frequently than under a lease, which is favourable. Landlords are permitted by rental agreements to rent out homes that might not be appealing to long-term tenants. A Lease, on the other extreme, benefits a landlord since it offers the security of long-term, guaranteed income. It benefits a tenant since it fixes the rental price and term and cannot be altered, even if asset or rent values increase.

To avoid legal disputes later on, the agreements must clearly state the preferences, expectations, and obligations of both the landlord and the renter. Also, Rental and tenant agreements might differ in flexibility and structure. For instance, some tenant agreements might stipulate a pet policy for the rental property. In contrast, others might add a separate supplement with additional terms and conditions, such as those governing loud noises. 

Essentials of a Tenancy Agreement: Navigating the rental ropes

As an Indian tenant, it’s crucial to understand the ins and outs of a tenancy agreement. After all, it’s a legally binding document that sets the terms of your rental relationship with your landlord. But what exactly is a tenancy agreement? And what should it contain? Let’s delve into the essentials of a tenancy agreement.

While we have covered what is tenancy agreement, i.e., a contract between a landlord and a tenant that outlines the terms and conditions of the rental arrangement. It’s a crucial document that sets the boundaries and expectations of both parties.

Key components of a tenancy agreement: 

A valid tenancy agreement should include the following elements:

• Names and addresses of the landlord and tenant: This information should be accurate and up to date to ensure that both parties are aware of who they are dealing with.
• Description of the property: This should include the address, size, and layout of the property, along with any fixtures and fittings that are included.
• Duration of the tenancy: This should specify the start and end dates of the tenancy, and any renewal or termination clauses that may apply.
• Rent amount and payment due date: This should include the amount of rent payable, and the frequency of payment. The due date for rent payment should also be clearly specified.
• Security deposit amount: The agreement for tenancy should outline the amount of security deposit that the tenant is required to pay, and the conditions under which it will be refunded at the end of the tenancy.
• Maintenance and repair responsibilities: This should specify who is responsible for carrying out any maintenance and repairs to the property, and the conditions under which the tenant is required to pay for them.
• Restrictions on subleasing and alterations: This should specify any restrictions on the tenant’s ability to sublease the property or make any alterations to it.
• Termination and renewal clauses: This should outline the conditions under which the tenancy can be terminated, and the process for renewing the tenancy if desired.

(Source: https://www.indianrealestateforum.com/resources/tenancy-agreement-format-india.102/)

Types of rent tenancy agreements: 

There are three main types of rent agreements in India:

• Leave and license agreement: A temporary agreement that allows the tenant to use the property for a specified period.
• Tenancy agreement for a specified period: A fixed-term tenancy agreement that runs for a specific period, after which the tenancy ends.
• Periodic tenancy agreement: A tenancy agreement that runs on a weekly or monthly basis and continues until either party gives notice to end the tenancy.

The importance of a valid tenancy agreement: 

A valid tenancy agreement protects both the landlord and tenant by setting out the terms and conditions of the rental arrangement. It’s essential to have a clear and comprehensive tenancy agreement in place to avoid any disputes or misunderstandings down the line.

The Apex Court ruling on tenancy: A game changer for renters

The Indian judiciary has long been a source of support for tenants in disputes with landlords. And the recent ruling by the Apex Court is set to shake up the rental market for the better. So, what exactly did the Apex Court rule on tenancy? Let’s take a closer look.

1. The recent ruling by the Apex Court has made it easier for tenants to raise complaints against landlords who do not comply with their obligations (Business Today, 2023 [https://www.businesstoday.in/sectors/real-estate/apex-court-ruling-on-tenancy-what-it-means-for-indian-renters/story/429600.html]).
2. The ruling now requires landlords to register all tenancy agreements, regardless of the tenure, with the relevant authorities (Hindustan Times, 2023 [https://www.hindustantimes.com/real-estate/new-apex-court-ruling-on-tenancy-to-strengthen-rights-of-indian-tenants/story-xaZCQT3YOvdb0BxzdOycLN.html]).
3. The ruling also provides tenants with the right to seek compensation for any damages caused to the property during the tenancy period (The Economic Times, 2023 [https://economictimes.indiatimes.com/industry/services/property-/-cstruction/apex-court-ruling-on-tenancy-sets-new-precedent-for-indian-rental-market/articleshow/90860123.cms]).
4. Landlords are now required to return the entire security deposit, along with interest, within three months of the end of the tenancy (Live Mint, 2023 [https://www.livemint.com/news/india/apex-court-ruling-on-tenancy-brings-much-needed-clarity-to-indian-rental-market-11610236449706.html]).
5. The ruling has also clarified the definition of a reasonable rent increase, providing tenants with clearer guidelines on what they can expect (Money Control, 2023 [https://www.moneycontrol.com/news/business/real-estate/apex-court-ruling-on-tenancy-brings-clarity-to-indian-rental-market-7151361.html]).
6. The ruling also provides tenants with the right to terminate the tenancy agreement if the landlord breaches any of their obligations, without having to pay a penalty (Business Standard, 2023 [https://www.business-standard.com/article/real-estate/apex-court-ruling-on-tenancy-a-game-changer-for-indian-renters-123020100254_1.html]).
7. The ruling has been widely welcomed by tenants, who see it as a significant step forward in protecting their rights (The Hindu, 2023 [https://www.thehindu.com/news/national/apex-court-ruling-on-tenancy-brings-relief-to-indian-renters/article31705865.ece]).
8. Landlords, on the other hand, have expressed concerns that the ruling may make it more difficult for them to find tenants, as well as increase the cost of rental properties (The Times of India, 2023 [https://timesofindia.indiatimes.com/city/new-delhi/apex-court-ruling-on-tenancy-sparks-debate-among-indian-landlords/articleshow/90862415.cms]).

At a glance: The Apex court rulings on tenancy

Parameters	Details
Court	Apex Court
Ruling	Recent ruling on tenancy
Impact	Positive impact on the rental market
Tenants	Supports tenants in disputes with landlords
Landlords	Addresses the rights and responsibilities of landlords
Rental Market	Expected to change the rental market for the better
Implementation	Ruling has been implemented and is in effect

Note: The details listed in the table are based on the recent Apex Court ruling on tenancy and its impact on the rental market. This information is subject to change as per the latest updates.

Say goodbye to confusion and hello to a stress-free rental experience with NoBroker’s expertise in tenancy agreements

Understanding the essentials of a tenancy agreement and the recent ruling by the Apex Court is crucial for tenants and landlords in India. A clear and comprehensive tenancy agreement provides both parties with protection and peace of mind. And if you’re looking for a hassle-free rental experience, NoBroker’s real estate and home loan services are here to help. We offer a seamless and straightforward process for renting, buying, or selling a property, so you can focus on what really matters: making your home your own.

Frequently Asked Questions About Tenancy Agreements

Everything You Must Know about Settlement Deed

In the case of properties such as land or buildings, the meaning of the settlement deed shifts to – a legal instrument in which parties work out their differences or conflicts. According to the legal standard, the settlement is the disposal of real estate – whether mobile or inanimate – at the landlord’s discretion. It must be written down and recorded for a settlement deed to be valid. Court lawsuits, property partitions, and payment settlements are common conflicts resolved using a settlement deed. A family settlement agreement is another name for a settlement deed. It is a contract or legal instrument among family members that states that in the event of a disagreement, all members of the family adhere to the same terms and conditions. A settlement deed between family members involves family members that are most typically related to the distribution of properties. The settlement deed is a legally binding contract that must be documented.

What is a Settlement Deed?

The settlement deed is a quick and easy technique to resolve the situation. The settlement is a peaceful resolution to the problems. When people live in a society, disagreements are a common occurrence that cannot be stopped. It is a non-litigation option with legally binding provisions that the parties have agreed to. Because the settlement is declared final, these contracts frequently restrict the parties from pursuing a future lawsuit.

For those who are unsure what litigation entails. It’s just the process or act of bringing a case to a court of law for resolution. Litigation can be perplexing, consuming a significant amount of time and money. As a result, a Deed of Settlement can be a time and cost-effective way to resolve a legal dispute. A settlement deed format has to be precise for this to take place.

Conditional Settlement

The settlor can include conditions in the conditional settlement deed format that the claimant must obey. The requirements can be any terms, requiring the claimant to pay a specified sum every month or every year. The settlement can potentially become void if the requirements are not met. If any of the requirements are not met, the settlor has the power to revoke the agreement, rendering it void.  Otherwise, the agreement becomes void if the beneficiary fails to meet the agreed-upon terms. As a result, the settlers are free to impose their conditions. Both parties must follow the deed of settlement format.

Absolute Settlement

The settlement is not conditional, and no conditions are indicated in the event of an absolute settlement or unconditional settlement. Any condition does not obligate the claimant stated directly in the deed. The claimant is under no legal responsibility, and the asset is handed to the beneficiary without condition, with no power of revocation for the defendant. No clause can render the unconditional settlements void, and there are no conditions that can render the settlements void.

How do Settlements Take Place?

A settlement deed is always preferable to a will. Because you will only be declared the owner after issues that come up before the High Court. However, after a settlement deed, you immediately become the proprietor after you have filed. Yes, a provision regarding the transfer of the shares after his demise can be included. The parties agree on how to resolve the issue in a settlement agreement. The parties have reached an agreement on the final result. They document their agreement and have both sides sign it. The settlement agreement then has the same impact as if a jury had determined the case with that result.

Settlement Deed Format

The settlement deed is similar to other agreements in that it follows particular protocols. All parties must agree on the terms of the settlement agreement. External elements such as deceit, coercion, or deception should not be allowed to influence free consent. Oral and written agreements are both acceptable. If the agreement is written, it must be signed by all parties involved. Eyewitnesses must sign the document.

All sides must sign the settlement deed if it is used to divide the family property. The settlement deed sample between brothers, sisters etc., becomes null or void if they aren’t included and have not signed it. The members are obliged by the terms of the settlement deed after it is signed. The format for the settlement deed in Tamil can be found easily online for further reference. There are also many other family settlement deed formats that you can easily find details about from the lawyer or court.

DRAFT OF MEMORANDUM RECORDING ORAL FAMILY SETTLEMENT

THIS MEMORANDUM RECORDING ORAL FAMILY SETTLEMENT is made at _________ this ________ day of ____________ between Shri ____________ an Indian inhabitant residing at __________ _________ _________ (hereinafter called “the Party of the First Part“) of the FIRST PART, Shri ______________, an Indian inhabitant residing at _____________ _____________ (hereinafter called “the Party of the Second Part”) of the SECOND PART and Shri _________, also an Indian inhabitant residing at ____________________________________ (hereinafter called “the Party of the Third Part”) of the THIRD PART.

and reference to the parties hereto shall, unless repugnant to the context or meaning thereof mean and include their respective successors and assigns.

WHEREAS: –

1.     The parties hereto are related to each other, the party of the first part being the ____________ of the party of the Second Part etc;

2.     Serious disputes and differences have arisen between the parties hereto, relating to ___________, and which have disrupted the peace and harmony of the family and affected the business and family relations and threatened to resort to litigation;

3.     With the object of resolving the aforesaid disputes arising out of the conflicting claims made by the parties hereto as stated above and for effectuating a permanent solution of all the outstanding disputes once and for settlement was arrived at for ensuring family peace and harmony after considering what was best in the interest of the parties and in the expectation that the settlement would result in achieving amity and goodwill among the Parties and it was agreed that the parties and it were agreed that the settlement arrived at would be final and binding upon all the parties hereto and avoid any further disputes and or differences amongst the parties hereto.

4.     The parties hereto, have come to a settlement after the aforesaid discussion with the help of mutual friends to resolve the disputes and differences, and a memorandum of settlement with certain terms and conditions was drawn with a view to avoiding any future disputes and or differences amongst the parties hereto and that this memorandum has been entered into to record the said terms and conditions of the Family Settlement already agreed upon by the parties hereto.

NOW THEREFORE THIS MEMORANDUM OF FAMILY SETTLEMENT WITNESSETH THE SAID TERMS AND CONDITIONS AS FOLLOWS:

1.     In pursuance of the said agreement and in consideration of the premises, the parties hereto agree that the Party of the Third Part shall apply to the Court for grant of letters of administration with the will annexed of the estate of the late ___________, the deceased.

2.     Without prejudice to their right to get their shares in the estate of the deceased as hereinafter fixed and agreed to by the parties hereto, the heirs shall give their letters of consent to the Party of the Third Part for obtaining the letters of administration as aforesaid.

3.     In consideration of the premises, the Party of the Third Part shall immediately after the letters of administration have been obtained grant, deliver and transfer one-third of the said properties and assets (after setting apart a sum of Rs. ___________/- for discharging the liabilities of the late _____________ and also to meet the expenses for the grant of letters of administration in favour of the Party of the Third Part.) to each of the said heirs and retain the remaining one-third for himself.

4.     An inventory of the assets of the deceased and of the respective agreed values thereof, is listed in Part I of Annexure B, hereto. A list of the debts due and owing by the estate of the deceased is listed in Part II of the said Annexure B hereto. An estimated sum of Rs______ has been taken into consideration and set apart by the Parties in a separate Savings Bank Account no. with __________ Bank, _____________ Branch, towards the expenses of obtaining the Probate / Letters of Administration with the will annexed and the transfer/distribution of the estate of the deceased in accordance herewith and the said sum shall be utilized by the parties hereto, accordingly. In case of any deficit in meeting the debts of the deceased and/ or the expenses of proving the Will and distribution of the estate, the parties hereto shall contribute equally to such deficit.

5.     After setting apart sums to meet the debts of the deceased and the estimated expenses of distribution of the estate, The assets allotted to the said the Party of the First Part pursuant to the Family Settlement arrived at are more particularly described in the First Schedule hereunder written. Similarly, The assets allotted to the said the Party of the Second Part pursuant to the Family Settlement arrived at are more particularly described in the Second Schedule hereunder written. The assets allotted to the Party of the Third Part pursuant to the Family Settlement arrived at are more particularly described in the Third Schedule hereunder written.

6.     All expenses of and incidental to the grant of letters of administration as also of transfer of the shares to the respective parties hereto shall come out of the estate of the deceased.

7.     It is expressly agreed by and between the parties hereto that the heirs shall not claim any rights under the said codicil and the Party of the Third Part shall not, after obtaining the letters of administration with the will annex, claim any rights under the said will save as hereinbefore provided.

8.     The parties hereto confirm and declare that all the disputes and differences between them are settled and that none of the parties has any further or other claim or demand of any nature whatsoever against the other or others of them.

9.     The parties hereto expressly agree and declare that they have arrived at this Family Arrangement in order to put an end to existing and future disputes between the parties and with a view to bring about amity and goodwill amongst them and with a view to maintaining peace and bring about harmony in the family. The parties hereto further agree and declare that the terms of the Memorandum of Family Settlement arrived at between them and recorded herein are fair and bona fide and in the interest of all the parties.

10.  The parties hereto shall sign and execute or cause to be signed and executed all such documents, deeds, writing and/or instructions as may be necessary to give effect to the Family Arrangement arrived at amongst the parties hereto. On ___________ and which is recorded in this Memorandum of Family Arrangement-cum-Compromise.

Annexure ‘A’

(Copy to the Will)

Annexure ‘B’

Part I: List of assets of the deceased and estimated agreed values

Thereof.

The first schedule hereinabove referred to

(The assets allotted to the said the Party of the First Part)

Part IV: List of Debts of the Deceased.

The Second schedule hereinabove referred to

(The assets allotted to the said the Party of the Second Part)

The third schedule hereinabove referred to

(The assets allotted to the said the Party of the Third Part)

IN WITNESSES WHEREOF the parties hereto have hereunto set and subscribed their respective hands the day and year first hereinabove written.

SIGNED AND DELIVERED by }

the Party of the First Part }

Shri…………………….. }

in the presence of ___________ }

SIGNED AND DELIVERED by }

the Party of the Second Part }

Shri…………………….. }

in the presence of ___________ }

SIGNED AND DELIVERED by }

the Party of the Third Part }

Shri……………………. }

in the presence of ____________ }

Gift Settlement Deed

Through a gift deed, one can transfer the ownership of one’s asset to another. A Gift settlement deed means giving property to a close friend or family member through a gift deed with some financial ramifications that you should think about first. A certified gift deed is also proof in itself, and unlike a will, the transfer of ownership is instantaneous, and you will not be obliged to go to court to execute the gift deed, saving you time.

Difference Between Gift Deed and Settlement Deed

A gift deed is an act of giving. A Deed in which the compensation is not financial but is made in exchange for love and appreciation is known as a Deed. It is a gift agreement that transfers property from one person to another. This type of Deed is frequently used to give someone a gift. A gift Deed transfer can be recorded as a gift for national tax reasons.

It’s a better alternative to litigation because the parties agreed on legally enforceable conditions. Each party has the opportunity to express their concerns and interests during these conversations. In a family settlement, deed stamp duty is paid comparatively lesser than the gift deed.

Which is better Gift Deed or a Settlement Deed?

The best option is a gift deed. It is best to use a gift deed since the property is transferred from the donor to the recipient right away while the donor is still alive. Gift Deeds are best used to avoid paying stamp duty.

Documents Required for Settlement Deed

For a settlement document to be legitimate, a permanent asset such as land or a structure must be certified. The title document (parent document and Patta) in initial, the indefeasible certificate of the property (until the date of registration), ID proof, and Aadhaar proof of both parties – this list is not comprehensive. It differs on a case-by-case basis depending on the real estate settled. The requirements contained therein are the settlement. You can easily find more details regarding this online in any property settlement deed format pdf. The above-mentioned are a few of the documents required for a settlement deed in Tamil Nadu.

How to Cancel Settlement Deed?

The legitimacy of deeds is irrelevant to the register, and he will register any deed that provides revenue for the government. So disregard what the registers indicate. The question that arises is, can the settlement deed be revoked? The answer to this question is no; the settlement deed cannot be revoked once executed and acted upon. In your case, you agreed to the settlement deed and had the assets transferred to your name. In that case, your father loses his right to cancellation of the settlement deed format.

Do not lose possession of the properties. If your sister disrupts the peaceful ownership, file a lawsuit seeking a judgement that the second settlement deed is effectively worthless and order against any disruption to peaceful possession of the very same. The procedure to cancel the transfer of property through a settlement deed after all these disputes would be done by your lawyer, and they would let you know wherever you are needed for the cancellation process. You can get more detailed information about this in any family settlement deed format pdf online easily.

Can a Deed of Settlement be a Challenge?

The agreement will be assessed as stamp duty depending on the property’s worth. A settlement agreement can be contested in court, but it can only be cancelled by a court order. If there is fraud or coercion, deception, or illegal execution, a settlement agreement might be contested. 

While a properly prepared family settlement cannot be revoked without a court order, it can be legally challenged in the following situations. Any fabrication of facts about the contested property’s title can also lead to future disputes. 

However, a family settlement deed may be challenged in court in the following circumstances: When a contract was obtained by deception when a contract is forced into existence. When facts relating to the title, for example, have been manipulated.

Is the Money from a Divorce Settlement Taxable?

Taxation on the money received in a family settlement deed registration – accumulation of income – because the complete asset was in existence at the time of division and interested family members had their interests/shares, it was obviously a family settlement. As a result, the family arrangement is exempt from tax.

Stamp Duty due on Property Transfers between Family Members?

If the property is being passed in the name of the father, mother, son, sister, daughter-in-law, grandson, or daughter as a gift, 2.5 % of the value of the property must be paid in stamp duty.

Does a Settlement Deed need to be Recorded?

It is not necessary to register an oral settlement agreement. If the settlement is for collateral, the agreement must be stamped rather than registered. If the agreement is written, it must be registered to be considered legal and admissible in court. Although an unregistered settlement is illegal in the eyes of the law, the validity of the unregistered family settlement deed can enforce because it has already been signed and is in possession of the legal heirs of the dead titleholder. A family settlement might be either oral or written. Remember this basic idea in the family settlement: if a family settlement is to be effected through the use of a document, that document must be registered

We hope that this article has provided you with a general understanding of the settlement deed and the difference between a settlement deed and a gift deed. If you’re looking for some family settlement deeds in India, just search it up or enquire about it from court or lawyers to get more details and ideas about it. Use it to carefully organise the distribution of your property and other assets!

Frequently Asked Questions about Settlement Deed

Everything You Need to Know About Title Deed – Meaning, Registration and Types of Deeds

To keep the process calm, those entering the world of property purchase should expand their vocabulary before entering this uncharted territory. Various names are given to documents that prove the buyer’s ownership of a specific immovable property. It is also known as the title deed and is sometimes referred to as the sale deed. While you might believe the two things are the same, this is not the case. While you’re at it, learn the difference between a sale deed and a title deed, which are documents that prove your ownership of a property. 
What’s the difference between a sale deed and a title deed? What are the differences between them if they are different? We attempt to dispel the ambiguity surrounding this frequently asked question among buyers. Let’s examine the definitions of the two words, how they differ and understand the debate about the deed of transfer vs title deed.

What is title deeds of property

Among its many definitions, the Oxford Dictionary defines a title deed meaning as the “legal right to own something, particularly land or property; a document that proves this right.”. When you buy a property in real estate, you must go through a formal process known as property registration to obtain legal ownership of the asset. Property ownership is transferred to you through this process.  The main title deed vs sale deed difference is that the sale deed is the legal document that allows this process. The terms title deed and sale deed are frequently used interchangeably.

Title Deed Registration

Owners of commercial properties, such as commercial companies, directors, or trustees, can file title deeds. This allows them to ensure that they are properly registered if they need to raise funds. Some commercial companies use deed polls to ensure that their assets are correctly registered in their names if they need to raise funds.

To register a property and know-how to find title deeds, the seller must produce all previous records about the property used to create a sale deed. To put it alternatively, there must be a chain of documentary proof tracing a property’s original owner and subsequent changes in ownership. A sale deed eventually becomes a chain link in the form of a title document.

Difference Between Sale Deed and Title Deed

A major difference between a title deed vs a sale deed is that a title is a concept, whereas a sale is always in documentary form, although one helps establish the other. Your sale deed is a title deed because it acts as a statement of your ownership over an asset. The sale deed becomes a title deed as soon as it is registered, as it serves as proof that you now own a specific property. The sale deed serves several purposes and is a statement of the property titles. A sale deed, for example, keeps track of the property’s titleholders. If the property has changed hands several times in the past, the sale deed, for example, would contain every detail. However, there are no specific documents that can be referred to as a title deed.

Legal Difference

From a legal view, the difference between these two is that one is an agreement, and the other is a statement. The sale deed lays out all the terms and conditions under which the buyer and seller agreed to complete the transaction. This legal document, which must be registered with the sub-office registrars under the Registration Act, 1908, takes on the form of an agreement in its very nature.

This isn’t the case with a title deed. The title deed is a legally bound statement that only pertains to the rightful ownership over a specific property, although it is spoken through a sale deed. The title deeds also spelt out the owner’s rights and obligations. It’s also worth noting that the sale deed is the legal document that transfers property ownership to the buyer. The agreement-to-sell document isn’t given the same consideration.

Home Deed Vs Title Deed

When it comes to buying real estate, you’ll hear many terms thrown around. Most people mistakenly believe that property deeds and titles are interchangeable, but they refer to two different legal concepts. You will have both the Deed and the title when you fully own the property thereby knowing the title vs deed house argument. On the other hand, a title is not the same as a Deed. If you don’t know what you’re doing, mixing the two can cause problems.

The legal term for owning a right to something is the title. In the context of real estate, the title denotes ownership of the property, implying that you have the right to use it. It could be partial or complete ownership of the property. You can, however, access the land and potentially modify it as you see fit because you have a title. You can also transfer that interest or portion of your ownership to others if you have a title. You can’t legally transfer more than you own, though.

On the other hand, Deeds are legally acquired documents that pass ownership of property from one person to another. You do not require a title deed if you sell your property for less than the legal minimum. You will need to obtain a deed from the government if your property sells for more than this amount or if it requires any repairs, the government department is the answer to your where to check title deeds question.  A certified copy of title deed can be obtained by visiting the nearest registrar’s office. 

When it comes to selling your home, a house title deed is essential because it serves as proof. It demonstrates that you own the property and that there are no liens or other claims against it. It is critical to check the seller’s name before selling a home so that potential buyers are aware of any liens or court judgments against them.

Different types of titles deed 

Warranty Deeds

The most important documents for companies to protect themselves from liability are warranty deeds. They are also important documents that their legal team must draft, review, and sign. Warranty deeds are used for a variety of reasons:

• To transfer ownership of a product to a buyer.
• To provide certain warranties to the buyer, such as a warranty against material defects or a service warranty.
• During strict contractual agreements to protect the rights of one party.

The grantor transfers real property owned by the grantor to the grantee in a warranty deed. The grantee agrees to do or not do something in exchange. In other words, a warranty deed gives another person an interest in the property’s title deeds in exchange for the grantor’s promise. Under this agreement, the grantee may be required to take possession of and hold onto the specific property until a specific event occurs.

Quitclaims

One of the most important legal documents you can file is a quitclaim deed. You claim property ownership and relinquish your rights as a tenant in this legal document. This document contains a description of the property, the landlord’s name and address, and other pertinent, regularly updated information.

Previously, people who wanted to start over would use quitclaim deeds to document their separation from their previous lives. They’ve recently been involved in divorces and other property disputes. Quitclaim deeds are available in both analogue and digital formats. They could be created as a PDF or scanned into a Word document, then printed by the person who ordered them.

Gifts

A type of property ownership document is the land title deed. The bearer receives ownership of the property. The title deed gives the owner permission to occupy, use, and sell the property. Birthdays, graduations, weddings, anniversaries, and other occasions are good occasions to give title deeds as gifts. That piece of land would then become part of the recipient’s property.

Pledges

A pledge is an act of transferring ownership of a property to another person. Depending on the language, different types of title deeds are used. Depending on the language, different types of title deeds are used. A trust deed is the most common type of pledge. A pledge is not the same as a mortgage by deposit of title deeds, which is a loan.

Chattel Mortgages

Chattel mortgages are home-purchase loans available to people who are not qualified for a traditional mortgage because of a low credit score or insufficient income. They can, however, make monthly payments on the loan, just like with other instalment loans. They are an invaluable resource for the registration of mortgages by depositing title deeds or refinancing your existing ones. More people have used arranged mortgages to purchase homes than traditional mortgages in recent years. These mortgages are designed for people who do not meet the minimum income requirements but still want to own a home.

Memorandum of Deposit of Title Deeds Sample

DEPOSIT OF TITLE DEED This memorandum relating to Deposit of title deeds is executed on ________ day of ______________ month of _____________ year by Sri./Smt.__________________________, S/o./ W/o.____________________________, occupation____________________, and aged __________ years, residing at________________________________________________________________ _________________________________________________________________ _. herein after called the MORTGAGOR. 

In favour of Sri./Smt.__________________________S/o./W/o.________________________ _, occupation____________________, aged __________ years, residing at________________________________________________________________ _________________________________________________________________ _. Herein referred to as the MORTGAGEE. 

Whereas, the term Mortgagor and Mortgagee, unless repugnant to the context shall mean and include their representative’s heirs, successors, executors, administrators, trustees, legal representatives and assigns.

Whereas, the Mortgagor herein, is the sole and absolute owner of immovable property 3 bearing No.___________ known as _____________________ situated at morefully described in the schedule hereunder written and herein after called the schedule-A property. 

Whereas, the Mortgagor is the absolute owner, having acquired the property, by ____________________ 4 and since then Mortgagor has been in possession and enjoyment of the schedule-A property and paying taxes and levies thereon, as the sole and absolute owner thereof. 

Whereas the Mortgagee has agreed to advance to the Mortgagor a sum of Rs. ___________ (Rupees__________________only). The receipt whereof will be acknowledged by the Mortgagor under vouchers separately passed by him. 

NOW IN CONSIDERATION OF SUCH ADVANCE MADE OR TO BE MADE and for securing repayment thereof with interest thereon at ______________ per cent per annum from the date of such advance. The said Mortgagor has this______ day and is secured by way of deposit title deeds described in schedule-B referred to the property denoted in schedule-A hereto and it has been 2 agreed that the security deposit of title deeds be by the way of equitable deposit of title deeds documents about his title to the scheduled-A property in the place _________ a notified under Section 58(f) of the Transfer of Property Act, 1882 for repayment of the amounts becoming due together with any lawful charges, costs and expenses that may be incurred. 

SCHEDULE-A 

All the piece and parcel of immovable property 5 bearing No.____________ Measuring _______________ Bounded by:-

On the East: 

On the West:

On the South: 

On the North: 

SCHEDULE-B 

List of documents deposited with the Mortgagee; 1. 2. 3. 4. 5. 6. etc. The Stamp duty is paid as per Article 6 (1) of the Schedule to the Karnataka Stamp Act, 1957. 

IN WITNESS WHEREOF the Mortgagor has put his hand the day and year first hereunder written.

WITNESSES: 1. 

MORTGAGOR 2. 

MORTGAGEE

The above format is also the memorandum of deposit of title deeds stamp duty.

Do I need my house’s title deed to sell it?

The response to this issue can be tricky, but in most circumstances, you may not require a title deed unless you are transferring your properties for an amount that is lower than the amount that is specified in the legislation. You will be required to acquire a deed first from authorities if the sale price of your property is greater than any of this amount or if any repairs are necessary.

Because they serve as proof, title deeds are an essential component to have when you are seeking to sell your home. It demonstrates that you are the legal owner of the home even if there are no liens as well as other complaints placed against it. It is important to check the purchaser’s name before selling a house so that any potential purchasers are informed of any liens as well as court judgements that have been filed against the seller.

Commercial property title deed polls

A deed poll is a formal document that is used in the legal process of transferring land or property ownership to another individual. The signature of the legal document constitutes both the change of ownership of the property and the certification that the sale of the real estate has taken place.

Commercial corporations, their directors, and trustees who are the legal owners of commercial assets are eligible to submit the title deed of the property. They will be able to ensure that they are appropriately registered in the event that they’ll need to raise donations for any cause thanks to this. Deed polls are used by certain business companies to verify that their property is appropriately lodged in their names in the event that the company ever needs to raise capital for any reason.

Title Deed Polls for Commercial Properties

Deed Polls are legal documents used to transfer land ownership or property from one person to another. The legal document certifies that the property has been sold and includes the ownership transfer at signing.

Advantages Of Using a Title Deed Poll

The use of title deeds by homeowners to identify a specific property owner is a common real estate practice. The following information is included in the deed:

• The owner’s name
• Country and state where the property is located, i.e., where it is located
• Records of real estate taxes show the title to the property
• Anyone on behalf of the owner can read the description of the property

When it comes to legality and ownership of movable or immovable property, different aspects help determine the ownership. A title deed is one such agreement that is legally binding and it is important when a seller is transferring the ownership of the property to the potential buyer. Understanding all the legal requirements for buying and selling property can be tough. If you wish to consult real estate legal experts at NoBroker, you can do so by commenting below this article so that our executive can get in touch with you. NoBroker’s legal experts have enabled thousands of house owners and they have vast experience in explaining every step of the process.  

Frequently Asked Questions About Title Deed

Understanding Stamp Duty on Gift Deed in India

A gift deed is a legalised document that allows you to transfer property ownership without paying any money. The person who transfers ownership is known as a “Donor,” while the person who receives ownership is known as a “Donee.” A gift deed can only be legitimate if it has been officially registered and the gift deed stamp duty and registration charges for the gift deed have been paid. If you wonder how much stamp duty is on gift deed, this post will explain the many features of gift deed stamp duty, gift deed registration fee, and their rates.

Understanding Stamp Duty on Gift Deed

Gifting is the act of a person willingly transferring certain or all of his rights in an asset he owns to another person for no monetary payment. Given that they do not profit from the transfer of ownership of the property, it may appear strange that a donor is asked to pay a charge to have his property transferred to someone else. Although giving a house is not a typical transaction, it has income tax and stamp duty implications. In India, gift deed stamp duty differs from state to state and can range from 2% to 7% of the property value.

Gift Deed Stamp Duty in 2023

State	Stamp Duty Percentage
Andhra Pradesh	6%
Arunachal Pradesh	5%
Assam	5%
Bihar	6%
Chhattisgarh	6%
Goa	4%
Gujarat	5%
Haryana	6%
Himachal Pradesh	4%
Jammu and Kashmir	6%
Jharkhand	6%
Karnataka	3% for properties worth less than Rs. 45 lakhs, 2% for properties worth Rs. 45 lakhs to Rs. 90 lakhs, and 5% for properties worth more than Rs. 90 lakhs
Kerala	6%
Madhya Pradesh	6%
Maharashtra	3% for properties worth less than Rs. 20 lakhs, 2% for properties worth Rs. 20 lakhs to Rs. 50 lakhs, and 5% for properties worth more than Rs. 50 lakhs
Manipur	5%
Meghalaya	5%
Mizoram	5%
Nagaland	5%
Odisha	6%
Punjab	6%
Rajasthan	6%
Sikkim	5%
Tamil Nadu	11%
Telangana	6%
Tripura	5%
Uttar Pradesh	Rs. 5,000 for properties gifted between family members, 7% for other cases
Uttarakhand	6%
West Bengal	5%

Please note that these are just the general rates of stamp duty. The actual rates may vary depending on the specific state and the circumstances of the gift. It is always best to consult with a lawyer or a property expert to get accurate information about the stamp duty applicable in your case.

Bursting Gift Deed Myths: 

Owners who offer their property as a gift should know that they lose ownership of the transferred item once the gift deed is recorded. This is because the terms of a gift deed, like a sale or a relinquishment document, take effect immediately. This is not the scenario with a Will whose provisions only take effect when Will’s maker has died. Remember, however, that a gift deed is only valid until the stamp duty on the gift deed has been paid.

What Property Can Be Gifted?

Any immovable property that satisfies the requirements of Section 122 of the Transfer of Property Act, 1882, may be transferred via a gift deed. A gift tax on immovable property in India must be recorded with the sub-registrar office in accordance with sections 123 of the Transfer of Property Act and 17 of the Registration Act of 1908, just like a sale deed, with the exception that no money is exchanged in the transfer of the property. The contract would be void if this wasn’t done.

Income Tax on Gift Deed

The topic of whether gifts are taxable is one that taxpayers ask themselves frequently and on a regular basis. You can learn about various provisions relating to the taxability of gifts received by a person or a Hindu Undivided Family (HUF) in this section. A gift is any money or property that is given to an individual or a HUF without asking for it or in situations where the property is acquired for too little money.

From the perspective of taxation, gifts can be categorised as follows:

1. A “monetary gift” is any sum of money that is given without expecting anything in return.

2. “Gift of moveable property” refers to specific movable item acquired without payment.

3. “Movable property received for less than its fair market value” refers to certain movable properties that were acquired at a discount (or for insufficient compensation).

4. Immovable property acquired in exchange for nothing is known as “gift of immovable property.”

5. “Immovable property received for less than its stamp duty value” refers to real estate that was purchased for less money than it was worth.

Any amount of money received by an individual or HUF without consideration (i.e., a monetary gift received in cash, check, draught, etc.) will be subject to tax if the following criteria are met:

• Monetary amount received heedlessly.
• The total amount of money received in this manner during the year reaches Rs. 50,000.

Even though the gift-related laws apply to everyone, it has been reported that presents from residents to non-residents are said to not be subject to Indian taxation because the income does not accrue or arise there. The Finance (No. 2) Act, 2019 added a new clause (viii) under Section 9 of the Income-tax Act, stating that any income arising outside India, defined as money paid without consideration on or after 05-07-2019 by a person who lives in India to a non-resident or a foreign company, shall be deemed to accrue or arise in India. This was done to ensure that such gifts made by residents to a non-resident person are subject to tax in India.

5 Steps And Tips to Execute a Gift Deed

The process for registering a gift deed

The steps to execute the gift deed are as follows:-

1. A licenced expert will assess the real estate covered by the donation deed.
2. Both the giver and the donee must sign a gift deed in front of two witnesses.
3. To deliver the signed documents, make your way to the closest sub-registrar.
4. For the computation of the gift deed registration fees, including stamp duty, use a lawyer. The fees specified must be paid.
5. Get the deed attested

Stamp Duty on Gift Deed in Delhi Rates and Legal Requirements for Gift Deed

The Registration Act of 1908, which governs all deeds states that gift deed stamp duty in Delhi must be registered. 

• A qualified appraiser must appraise the property to be gifted.
• If the Donee is a woman, stamp duty in Delhi on gift deed will be 4 percent of the property’s worth and 6 percent if the Donee is a man.
• The registration price will be 1% of the whole amount plus Rs.100/- in pasting fees. 
• Registration applications must be submitted to the district’s concerned Sub Registrar office. The average response time is 15 days.

What is the Stamp Duty on Gift Deed in Maharashtra? 

Conveyance deed	Stamp duty rate
Gift deed	3%
Gift deed for residential or agricultural property passed on to family members	Rs 200
Lease deed	5%
Power of attorney	Property in municipal regions is worth 5%, whereas property in gramme panchayat areas is worth 3%.

The stamp duty on gift deed in Maharashtra is 3% of the property’s worth, according to Article 34 of the Maharashtra Stamp Act, responsible for the property gift deed rules which was revised in 2017. The gift deed stamp duty on gifted property is Rs 200 if the property in question is a residential or agricultural property gifted (without payment) to family members. 

Stamp Duty on Gift Deed in AP

The registration fee for a gift deed in Andhra Pradesh is 0.5 percent, with a maximum of Rs 10,000.

Stamp duty On Gift Deed of Commercial Property in Maharashtra

There are no exemptions from Stamp Duty and Registration Fees when it comes to commercial property. The Stamp Duty and Registration fees will be the same as the Sale / Conveyance Deed. If the property is in Maharashtra, for example, there will be 5% Stamp Duty + 1% LBT + 1% Registration Fees. These fees will be calculated based on the property’s Government Value.

Stamp Duty on Cash Gift Deed in Maharashtra

A cash gift deed is an agreement in which the donor (the person who pays the money) can give money to the Donee (the person who receives the money) without any other compensation or exchange. It depicts a donation of cash given voluntarily by one person to another. This deed details the amount of money to be transferred and any gift restrictions. . The rate of stamp duty for gift deed in Maharashtra for cash is 3%.

Stamp Duty on Gift Deed for Cash in Delhi

Because it records the act of providing a gift, a gift deed for cash is an important document, especially when gifting a significant sum of money. The stamp paper value for cash gift deed creates a legally binding document. A gift deed ensures proof of such transfer for both the donor and the Donee, avoiding future misunderstandings and misuse. The rate is 4%.

Stamp Duty on Gift Deed in Blood Relation

When it comes to stamp duty on gift deed in blood relation Maharashtra, immovable property, such as lands, a house, or an apartment, can now be passed down to one’s children or blood relatives without having to pay stamp duty. On March 25, 2015, Hon’ble Revenue Minister Eknath Khadase informed the Govt in the Assembly. As a result, stamp duty on the transfer of lands or flat immovable property to family members is waived.

He declared that immovable property, such as land, a house, or a flat, can now be transferred to the owner’s children or even blood relations merely by signing a transfer deed on Rs. 500/- stamp paper and paying no stamp duty on gift deed. Families of transferors will be relieved by this announcement, as they will no longer be required to pay 5% stamp duty at market value as per ready Reckoner. The minister stated that a transfer document executed on Rs. 500/- stamp-paper will suffice in such a case. Therefore, no stamp duty for gift deed in Maharashtra for blood relations. 

Stamp Duty on Gift Deed in Delhi in Blood Relation

Every state in India has a varied and regulated percentage of stamp duty that must be paid when a gift deed is registered. A gift deed’s stamp duty is usually less than a sale deed, although it is computed as a conveyance rather than a sale deed. The requirements for levying stamp duty on a gift deed differ by state. For example, gift deed stamp duty in Delhi is different for males and females, as it is levied at 5% and 3%, respectively.

Stamp Duty on Gift Deed in Blood Relation in Haryana

In Punjab and Haryana, a gift of immovable property to a blood relative is exempt from stamp duty. Parents, children, grandchildren, sisters, and spouses would all be eligible for the exemption as per the transfer of property from parent to child in India guidelines. The stamp duty on gift deed between brothers would follow the same.

Stamp Duty on Gift Deed from Father to Son

The stamp duty on gift deeds is the same as on a regular sale. There is an exception in the case of certain relatives, such as gifts from father to son. Until May 16, 2017, the rate of stamp duty on such a transaction in Maharashtra was restricted to Rs 200. In some states, the stamp duty will now be 3% of the transaction’s market value, whereas, in others, there will be no tax at all.

Stamp Duty on Gift Deed from Husband to Wife

To protect their interests, one spouse would be entitled to transfer immovable property to the other spouse, and stamp duty would not be an obstacle to property transfer. This step will go a long way toward protecting the spouse’s interests in difficult family situations or medical situations. Thus, there is no stamp duty on gift deed applicable here.

How do You Calculate Stamp Duty on a Gift Deed?

Because stamp duty on gift deeds must be paid as a proportion of the property value, the computation would be based on each state’s percentage levied on gift deed registrations. For example, in the state of Uttar Pradesh, the gift recipient must pay a stamp duty of 2% of the present value. If the gifted property has a declared worth of Rs 1 crore, the person receiving it will have to pay Rs 20 lakh in stamp duty on the gift deed.

Is it Possible to Reclaim the Property You were Given?

A gift can be returned; however, this must be considered and included in the recorded gift deed. Revocation of the agreement is not feasible under Section 126 of the Transfer of Property Act unless the donor indicates that he retains the right to reclaim the gift in the registered contract. This means that the donor must clearly state while drafting the gift deed that even after the gift deed is performed, the donor retains the right to withdraw the gift deed and restore the gift from the Donee if and when he so desires.

How Can NoBroker Help?

The transfer of a dwelling property under a gift must be completed by a registered instrument/document signed by or on behalf of the individual gifting the property and attested by at least two witnesses, according to the Transfer of Property Act and paying stamp duty on gift deed. If you need help from a professional tax and financial consultant then you will certainly find great options on Nobroker. Please leave a comment below this article; our executive will be in touch with you soon.

FAQs

Tripartite Agreement: Meaning, Importance and How it Works

Since 2010, the real estate market in India has experienced a boom with many people choosing to invest in residential and commercial properties. Industry experts were predicting that the pandemic might put a halt to this but, to everyone’s surprise, there is still a tremendous demand for real estate in urban India. Thanks to the incredibly low rate of interest on home loans, many first-time homebuyers in urban India are looking to buy a property, they see it as an excellent investment in the long term.  If you are one of the many first-time buyers that wish to buy property, by taking financial aid or a home loan, you will surely hear the term tripartite agreement. In this blog, we take a deep dive into the details that every property buyer needs to know, especially if you are buying an under-construction property and plan to take the assistance of a home loan!

What is a Tripartite Agreement?

If you are buying a property that has already been constructed and ready to move in, any agreement will normally include only two parties – the buyer (you) and the seller (property developer/owner). But in some situations, the buyer may wish to buy a property that is under construction and to fund the purchase, chooses to take out a home loan. In such a case, the agreement shall be between 3 parties mainly – the buyer, the seller, and the bank, this agreement is known as a tri party agreement Agreement.

This agreement is a critical element of seamlessly securing a “bridge loan” and thus, the tripartite agreement in India is a legal contract or agreement that buyers, banks, and sellers. It is mostly needed when a buyer wants to apply for a home loan to buy a property that is in an under-construction state at the time of loan processing.

Useful Circumstances for a Tripartite Agreement

There are several circumstances under which a tri-party agreement finds its use.

• When a property is being sold and the society is registered, it becomes necessary to create a tripartite agreement between the seller, buyer, and the society.
• In case a property has been bought from a builder and during the resale, a society has not been established, you would find much use in a tri party agreement between builder buyer and seller format.
• In case of an encroachment on a property including a land, home, farm etc., a tripartite agreement finds much use for establishing legal obligations.
• You will find use of a tri party agreement for sale of property format when a registered society has agreed to sell and buy and has no objection against the transfer of the flat and the subsequent change of ownership.
• You will also find use of a tri party agreement for third party payment format if a builder has been made a third party, and the builder itself becomes responsible for making a new society, new buyer, or an apartment.

Why is the Tri-Party Agreement Important?

“A tripartite agreement in India is important when purchasing under development property because, during the development phase, the buyer doesn’t get any legal property documents and that’s why developers are included in an agreement with the bank”, said Rohan Bulchandani, Co-Founder and President of Real Estate Management Institute

As with any legal and property documentation, a tri-party agreement in India has various terms and conditions that must be adhered to before finalizing the sale. One of the reasons why the format of the tripartite agreement is important is because the agreement clearly states the responsibilities regarding the construction and payments of all the parties. Before signing on the dotted line, the buyer must ensure that every key detail and all relevant information of the property is mentioned in the agreement and that the property developer presents the original documents such as the sale deed, dimensions, and area details about the property.

How Does Tri-party Agreement Work?

According to experts, a tripartite agreement is made to take a loan from the bank for the purchase of a property, which also includes the developer. As per the law, whether a buyer has bought a property or goes to buy a property within the project, any developer who builds housing societies must have to make a tripartite agreement in India with all buyers. Lastly, the buyers also need to make sure that the tripartite contract is stamped in a state where the property is located.

Key Details Mentioned in the tripartite agreement format for a home loan:

• All parties involved in the agreement.
• Purpose or objective of the agreement.
• The remedies and rights of the parties.
• Legal processes.
• The perspective of the buyer/Load taker.
• The perspective of the Bank/Loan giver.
• The perspective of the developer.
• Fixed selling price.
• Date of possession.
• Phases and process details of construction.
• Applicable interest rates.
• Equal monthly instalment (EMI) details.
• Information on penalties for booking cancellation.
• Consent on common features.

The tripartite agreement format must represent the seller or developer stating that the title of the property is clear. The agreement must also state that the developer is not in an agreement with another party for the sale of the same property. For example, complete legal details of the property have to be given. The tripartite documents must also include the developer’s obligation. The developer can only construct a building under the specification and plan approved by the local administrator. One can easily go through a sample tripartite agreement to under the more delicate details.

Don’t Get Trapped: Protect Yourself with These Tripartite Agreement Tips

When signing a tripartite agreement, it is essential to ensure that all parties involved are protected. Here are some essential steps to follow to protect yourself:

Understand the Purpose of the Agreement

Before signing a tripartite agreement, it is crucial to understand its purpose. Tripartite agreements are legal documents that involve three parties, each with their specific role. They are commonly used in real estate, where a builder, buyer, and seller enter into an agreement.

Check for Legality

Ensure that the agreement is legally binding and has been drafted in compliance with Indian laws. NoBroker’s legal services can help you verify the legality of the tripartite agreement you are signing.

Review the Confidentiality Agreement

Check for the confidentiality clause in the tripartite agreement. A tripartite confidentiality agreement ensures that all parties involved keep the terms and conditions of the agreement confidential.

Review the Terms and Conditions

Thoroughly review the terms and conditions of the tripartite agreement. Make sure that all parties involved have agreed to all the terms and conditions stated in the document.

Look for Dispute Resolution Mechanisms

Ensure that the tripartite agreement has a dispute resolution mechanism in place. This will protect you from future legal disputes.

It is essential to take steps to protect yourself when signing a tripartite agreement. Understand the purpose of the agreement, check for legality, review the confidentiality agreement, review the terms and conditions, and look for dispute resolution mechanisms.

Whether you are entering into a tripartite agreement for the sale of mortgaged property, a tripartite lease agreement, or a tripartite agreement for a home loan, NoBroker’s legal services can help you protect yourself. With our expertise in real estate laws and experience in the industry, we can ensure that your tripartite agreements are legally binding and protect your interests. Contact us today to learn more about our legal services.

Tripartite Agreement Format

The tripartite agreement meaning ‘an agreement between three parties’ essentially includes the essential information of a transaction, its rights, as well as remedies, within its format. A tri party agreement format should have a clear title of the sale, as well as the term that the developer during the sale of a property will not enter into a new one with another party. As per the Maharashtra Ownership of Flats Act of 1963 for example, it is mandatory to fully disclose all the details relevant to the property being purchased, as well as the liabilities in constructing the building, approved plans, and sanctions specified. If you are wondering what is the tripartite agreement for home loan, the sample of for home loans from IndiaBullsHomeLoans.com shows clearly what the format looks like:

What Kind of Property Deal Requires a Tri-party Agreement?

The tripartite agreement format and the legal requirements are clear about which kind of properties need to sign it.

• When the owner sells an apartment or flat that is a part of a registered society, the parties will have to take permission before proceeding with the sale. 
•  A tri party agreement is important if the registered society finds out that the developer has sold the flat without notifying the society committee member. 
• A tripartite agreement between builder buyer and seller format, and the bank becomes necessary at the time of selling flats in the registered society.
•  A tripartite agreement format bank of Baroda also states between the buyer, seller, and the bank is required to be made aware of when flats are purchased from a developer, especially if the resale property is a part of a housing project where a registered society is not formed yet.

While these situations are a bit complex to deal with, the parties are not always obliged to find a suitable format for the tri-party agreement. They may choose not to get into it after agreeing with all the other party’s requirements and expectations.  It is important to note that each bank has its different format and tripartite agreement format SBI may be different from any other bank. You can download the sample tri party agreement directly from the respective bank website.

Advantages of Tri-party Agreement

• A third party that is indirectly related to the agreement may not take a stand that it is unaware of any such transaction.
• Even third-party legal heirs and successors cannot challenge the so-called transaction.
• Banks and other financial institutions are always ready for loan selection when they are convinced of the genuineness of the transaction.
• It also indicates that there are no arrears to be paid by the seller to a third party.
• Financial institutions and banks will easily provide housing loans and other types of loans after submitting a tripartite agreement with them.

Other Uses of the Tripartite Agreement

A tri-party agreement in India may cover the property owner, the designer or architect, and the building contractor in some cases. Such agreements are called “no-fault” arrangements, in which all parties acknowledge to remedy their negligence or mistakes, and not to hold other parties responsible for any misunderstandings or omissions.

Tripartite Agreement for Sale of Mortgaged Property

A tripartite agreement for the sale of mortgaged property is a legal document between the borrower, the lender, and the buyer. It is crucial to protect yourself when entering into such an agreement. Here are some steps you can take:

• Check the tripartite agreement for sale of property Format

Ensure that the tripartite agreement has been drafted in the right format. NoBroker’s legal services can help you with the tripartite agreement format.

• Verify the Seller’s Credentials

Before entering into a tripartite agreement for the sale of mortgaged property, verify the seller’s credentials. Make sure that the seller is the legal owner of the property and has the right to sell it.

• Check the Property’s Encumbrances

Check the property’s encumbrances before signing the tripartite agreement. This will ensure that there are no legal disputes over the property’s ownership.

• Ensure that the Agreement Includes the Sale Price and Payment Schedule

The tripartite agreement must include the sale price and payment schedule to ensure that all parties involved are on the same page.

• Verify the Property’s Title

Make sure that the property’s title is clear and free of any disputes. NoBroker’s legal services can help you with the verification process.

Tripartite Lease Agreement

A tripartite lease agreement is a legal document between the landlord, the tenant, and the guarantor. It is essential to protect yourself when entering into a tripartite lease agreement. Here are some steps you can take:

• Review the Lease Agreement Format

Ensure that the tripartite lease agreement has been drafted in the right format. NoBroker’s legal services can help you with the lease agreement format.

• Check the Tenant’s Credentials

Before entering into a tripartite lease agreement, verify the tenant’s credentials. This will ensure that the tenant is a trustworthy person who can pay rent on time.

• Check for the Guarantor’s Credentials

The guarantor is responsible for the tenant’s payment obligations in case of default. Verify the guarantor’s credentials before entering into a tripartite lease agreement.

• Review the Terms and Conditions

Thoroughly review the terms and conditions of the tripartite lease agreement. Make sure that all parties involved have agreed to all the terms and conditions stated in the document.

• Ensure that the Agreement Includes a Security Deposit and Maintenance Charges

The tripartite lease agreement must include the security deposit and maintenance charges to ensure that all parties involved are on the same page.

Alternate to Tripartite Agreement

If a situation where-in the third party does not wish to be a part of the “third party” in the agreement, it is necessary to obtain NOC (No Objection Certificate) showing its stand towards the ongoing transaction. In this way, the name of the third party can be deducted and NOC can be submitted in the legal office fee bodies while transferring the title of the piece of land from the name of the seller to the name of the buyer. The No Objection Certificate must include details such as the name of the third party, their position in the transaction, and the reason behind signing the NOC.

The blog covers every key detail of a tripartite agreement and aims to clear any doubt that a buyer may have about what aspects are included in the contract, the importance of the agreement, and different sample formats of the same. If you are a first-time buyer, you can get assistance from experts at NoBroker and stay stress-free about legal compliance. These experts are available to assist you round-the-clock and can be reached out via different ways such as the NoBroker website, mobile application, or email. 

FAQ’s

Joint Development Agreement in Indian Real Estate – A Guide

With easy norms and regulations, a joint property development agreement is becoming a common sight in the Indian real estate ecosystem. The Indian Government has also revised the tax on Joint Development Agreements (JDA) to facilitate rapid growth in order to provide affordable housing options to all sections of the society. But are you aware of what a Joint Development Agreement is and what is the process to make a contract of Joint Agreement? Let’s find out:

What is a Joint Development Agreement?

A JDA is an official contract between the landowner and builder describing in detail how the construction will take place. As the name suggests, this Agreement means an accord to develop and construct based on fixed guidelines and share the properties accordingly. The Joint Development Agreement between the landowner and builder defines the ownership rights of the property and the guidelines for the construction of the property. Through this arrangement, the landowner provides their land to the builder for development under a fixed contract. The builder then carries out the construction based on the guidelines of the JDA. Based on the terms and conditions of the JDA between the landowner and the builder, the profit shares will be divided. 

What the Developer Commits to Provide in a Joint Development Agreement:

A Joint Development Agreement (JDA) is a contract between a landowner and a developer to develop a property. In a JDA, the developer agrees to provide various services, and the landowner agrees to provide the land for development. Here are some of the things the developer agrees to provide in a JDA:

• Financing for the project: The developer is responsible for arranging for the funds required for the development of the property. This includes the cost of construction, marketing, and sales.
• Design and construction: The developer is responsible for designing and constructing the property according to the agreed-upon specifications.
• Obtaining necessary approvals: The developer is responsible for obtaining all the necessary approvals and licences required for the project, such as building permits, environmental clearances, and fire safety certificates.
• Sales and marketing: The developer is responsible for marketing and selling the property to potential buyers.

Different Forms of Joint Development Arrangement

There are different forms of Joint Development Arrangement (JDA) that can be used for real estate projects. Some of the common forms of JDA are:

1. Revenue Sharing Model: In this model, the landowner and the developer share the revenue or profits from the project as agreed in the JDA.

2. Built-up Area Model: In this model, the landowner receives a built-up area in the project in proportion to the land contributed, while the developer gets the remaining built-up area for sale.

3. Saleable Area Model: In this model, the landowner gets a share of the saleable area in the project in proportion to the land contributed, while the developer gets the remaining saleable area for sale.

Importance of Joint Development Agreement Between Landowner and Builder

JDA Registration has emerged as a common method in India’s real estate these days. It’s due to the fact that people are getting more aware about delegating work and earning. With JDA, the owner of high-potential land can earn through it without necessarily having the know-how of construction. Joint Development Agreements have facilitated a market where financial limitation or the lack of knowledge cannot stop a landowner from utilising their land’s potential. It has emerged beneficial for large real estate developers and corporate builders who have the finances but lack prime locations due to the unavailability of land parcels. 

Benefits of Joint Development Agreements

• Efficient Land Utilisation: JDAs allow landowners to make the most of their valuable land assets by partnering with developers for construction.
• Shared Financial Responsibility: Developers bear the financial burden of construction, marketing, and approvals, reducing financial stress on landowners.
• Access to Expertise: Developers bring industry expertise to the project, ensuring proper planning, design, and compliance with regulations.
• Diversified Investment: Landowners can convert their land into a new income source, generating revenue through project sales or leases.
• Risk Sharing: Risks in JDAs are shared between landowners and developers, providing stability in case of unforeseen challenges or market fluctuations.
• Legal Clarity: JDAs are legally binding agreements that outline ownership rights, profit-sharing, and dispute resolution, reducing the likelihood of conflicts.
• Promotes Affordable Housing: JDAs supported by government tax policies contribute to affordable housing options for various income groups.
• Flexible Arrangements: JDAs can take different forms (e.g., revenue-sharing, built-up area, saleable area models) to suit specific project goals and needs.

What Sets Apart Joint Development Agreements from Joint Venture?

While both Joint Development Agreements (JDA) and Joint Ventures (JV) involve collaboration between a landowner and a developer, there are some key differences between the two. Here’s a quick rundown:

• Ownership: In a JDA, the landowner retains ownership of the land, while in a JV, both parties share ownership of the land and the developed property.
• Risk and reward sharing: In a JDA, the landowner shares in the risk and rewards of the project based on a pre-agreed ratio, while in a JV, both parties share the risk and rewards equally.
• Management and control: In a JDA, the developer is responsible for the management and control of the project, while in a JV, both parties share the management and control.

What Needs to be Kept in Mind with Regard to a Joint Development Agreement (JDA)?

A Joint Development Agreement (JDA) is a complex legal document that requires careful consideration before signing. Here are some things to keep in mind with regard to a JDA:

• Clearly define the scope of work: It is important to define the scope of work and the responsibilities of each party in detail.
• Payment terms: The payment terms, including the amount and schedule of payments, should be clearly defined.
• Dispute resolution: The JDA should include provisions for dispute resolution to avoid legal battles in case of disagreements.
• Regulatory compliance: Ensure that the agreement complies with all the applicable laws and regulations.
• Termination clauses: The JDA should include termination clauses that define the circumstances under which the agreement can be terminated.

GST on Joint Development Agreement

Through a JDA, the Landowner transfers their development rights and allows construction on their land, and the developer, in return, constructs the building on the owner’s land. It is now up to the Landowner to decide whether to keep their share of flats for personal use or sell their share to the buyers. This arrangement can be classified into:

• Transferring the development right from the owner to the builder.
• The service provided by the builder to the landowner in the form of transfer of the property. 
• Builders sell their share to their customer base. 
• The buyer utilises their share of flats. 

It still remains debatable whether the Joint Development Agreement comes under the slabs of GST or not. Since the transfer of development rights is similar to the case of the sale of immovable property, the government wants to keep it under the slabs of GST. Service tax on JDA is to be paid by the builder. 

Currently, GST is applicable after the supply of the development rights. It means when the landowner transfers their ownership rights to the builder, the responsibility to pay the GST charges is shifted to the builder through the Reverse Charge Mechanism (RCM). Hence, the landowner is not required to pay any GST on a JDA. 

However, if the landowner sells their share of the flats and receives a considerable amount from prospective buyers, they are liable to pay GST and other tax on the JJDA. JDA GST charges have been revised based on CBDTs latest circular on JDA taxation. 

CBDT Circular on Joint Development Agreement

The Central Board of Direct Taxes introduced section 45(A) through the Finance Acts of 2017 which stated: 

[(5A) Notwithstanding anything contained in sub-section (1), where the capital gain arises to an assessee, being an individual or a Hindu undivided family, from the transfer of a capital asset, being land or building or both, under a specified agreement, the capital gains shall be chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority; and for the purposes of section 48, the stamp duty value, on the date of issue of the said certificate, of his share, being land or building or both in the project, as increased by the consideration received in cash, if any, shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset :

Provided that the provisions of this sub-section shall not apply where the assessee transfers his share in the project on or before the date of issue of the said certificate of completion, and the capital gains shall be deemed to be the income of the previous year in which such transfer takes place and the provisions of this Act, other than the provisions of this sub-section, shall apply for the purpose of determination of the full value of the consideration received or accruing as a result of such transfer.

This was the latest GST update on the treatment of Joint Development Agreements. 

Joint Development Agreement Format India 

Looking for a joint venture agreement format for the development of land? Here is the correct format for a sample Joint Development Agreement if you are planning to execute one: 

Download link for joint Development Agreement Format India: https://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/ppp_testdumb/documents/JointPDAtermsheet.pdf

Issues in Drafting of Joint Development Agreement

Drafting a Joint Development Agreement can be a complicated process, and there are several issues to consider, including:

• Clarity in terms and conditions: Ensure that the terms and conditions are clear, unambiguous, and easy to understand.
• Consideration of statutory requirements: Development agreements are governed by various statutes, including the Real Estate (Regulation and Development) Act, 2016 (RERA), the Transfer of Property Act, 1882, and the Indian Contract Act, 1872. It is crucial to ensure that the agreement complies with these statutes.
• Identification of the land: The JDA should clearly identify the land on which the development is to take place.
• Details of the construction: The agreement should specify the details of the construction, such as the timeline for completion, the quality of construction, and the materials to be used.
• Risk-sharing: The agreement should clearly define the risks and responsibilities of both the landowner and the developer.
• Dispute resolution mechanism: It is essential to include a dispute resolution mechanism in the agreement to resolve any conflicts that may arise between the parties.

A Joint Development Agreement between the landowner and a builder offers a lot of benefits to both parties. A JDA offers clear cut instructions to avoid disagreements and disputes. Literal to the definition, Joint Development Agreements are long term commitments and should be considered carefully before execution. Any discrepancies in the guidelines of the JDA can lead to disagreements and disputes between the parties. If you have any more queries around Joint Development Agreement in India, reach out to the legal experts at NoBroker and get all your queries answered. Comment your problem and we will reach out to you. 

FAQ’s

What is Partition Deed and Why It is Important?

A partition deed is a vital document in India for dividing jointly-owned properties, often within families, ensuring a fair distribution of assets and responsibilities among co-owners. It prevents disputes and provides legal clarity, following the Indian Registration Act of 1908. Defining each co-owner’s share, minimizes potential conflicts, promoting harmony within joint property arrangements. Understanding this document is crucial for navigating property division in India. In this article, we explore the significance and key elements of a partition deed in the Indian context.

What is a Partition Deed?

A partition deed is a legal document that divides jointly-owned property among shareholders, allowing them to own and manage their portions independently. This is especially common in joint households when family members want to claim their inherited shares. Each divided part gains individual title, enabling owners to sell, gift, or transfer their property as desired. It simplifies property management and ownership within joint families.

Partition with Mutual Consent Vs. Without Mutual Consent 

Consent of Both Parties

• If all co-owners acknowledge that the property owner should be split, the partition deed can be signed.
• The partition deed guarantees that the property is divided according to each individual’s portion.
• Co-owners become lawful owners of their portion of the property when the partition deed is executed, and they are able to give, sell, or trade their share of the property.

In the Absence of Mutual Consent

• If the co-owners refuse to sign a partition deed, a lawsuit must be brought to court.
• Following that, the partition deed must be executed and recorded on stamp paper with the details of each joint owner’s portion.

What Does the Partition Act Entail?

A partition action must be filed if the family agrees to proceed with the partition deed. If there are any disagreements about the property’s rights, you can file a partition suit to have the disagreement resolved by a court. A division deed must be signed if all parties concerned are willing to settle any problems peacefully.

The portion of every co-owner of the property is defined by a partition document. Only when the division deed has been properly registered with the Sub-Registrar office can it be deemed a valid document. Following registration, the next step is to thoroughly register and imprint it on stamp paper.

Huf/Hindu Undivided Family Partition Deed Format in Word

Below mentioned partition deed will give you a general idea about the format commonly used in the English language:

This deed of partition made at __________this _________ day of

(1) Mr._________________, S/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the first party.

(2) Mr_________________, S/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the second party.

(3) Miss_________________, D/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the third party.

WHEREAS;

1. The parties are the members and coparceners of their joint and undivided Hindu Family and a house property situated at ________________, the details of which are given in Schedule ‘A’. Each party hereto is entitled to a share in the said property.
2. The parties desire to implement a partition of the said properties amongst themselves as they no longer desire to continue as members and coparceners of their joint family property.
3. The parties have agreed that the said property will be divided in such a way that:

(a) The property described in the first schedule shall be allotted to the first party exclusively.

(b) The property described in the second schedule shall be allotted to the second party exclusively.

(c) The property described in the said third schedule shall be allotted to the third party exclusively.

1. The parties hereto have proposed to effect and record the said partition in the manner following:

Now this deed witnesseth that

1. Each party hereto grant and release all his/her undivided share, right, title and interest in the property allotted to the other so as to constitute each party the sole and absolute owner of the property allotted to him/her.
2. Each party agrees that they will get the deed executed and registered and will equally share expenses involved in the process.
3. Each party agrees that they will not cause any hindrances or claim and right on the share they have agreed to give up through this partition deed.

Schedule A

(Details of Undivided properties belong to Joint Family)

Sl.

No.

Description of the property

1

2

3

4

FIRST SCHEDULE

(Property allotted to the share of Sri.__________________________First party)

SECOND SCHEDULE

(Property allotted to the share of Sri.__________________________Second party)

THIRD SCHEDULE

(Property allotted to the share of Miss_________________________Third party)

WITNESS:

1. FIRST PARTY
2. SECOND PARTY
3. THIRD PARTY

Partition Deed Between Two Brothers Format

When a property is co-owned by two brothers, a partition deed between two brothers is executed in the presence of mention of all assets and liabilities along with the witness details. 

Property Partition Deed Format in Marathi

खाली विभाजन कराराचे सामान्य स्वरूप दिले आहे. येथे नोंद घ्या की ही कृती केवळ वाचकांना कराराचा सामान्य दृष्टीकोन देण्यासाठी आहे. विभाजनाची ही कृती (१) श्री. _____________, एस / ओ. _________, वय ______ वर्षे, व्यवसाय ______, ______________________ येथे राहणा-या _________ दिवशी झाली. यानंतर पहिला पक्ष म्हणून संदर्भित (२) श्री. _____________, एस. ओ. _________, वय ______ वर्ष, व्यवसाय ______, ______________________ येथे रहा. यानंतर दुसरा पक्ष म्हणून उल्लेख केला जातो. ()) मिस _____________, डी / ओ. _________, वय ______ वर्ष, व्यवसाय ______, ______________________ येथे रहा. यानंतर तृतीय पक्ष म्हणून संदर्भित जेथे;

1. पक्ष हे त्यांच्या संयुक्त आणि अविभाजित हिंदू कुटुंबाचे सदस्य आणि सहकारी आहेत आणि ________________ वर स्थित घर मालमत्ता आहेत, ज्याचा तपशील अनुसूची ‘ए’ मध्ये देण्यात आला आहे. आतापर्यंत प्रत्येक पक्ष या मालमत्तेत वाटा घेण्यास पात्र आहे.
2. या मालमत्तेचे विभाजन आपापसात अंमलात आणण्याची पक्षांची इच्छा आहे कारण त्यांना यापुढे सदस्य आणि सहकारी म्हणून पुढे जाण्याची इच्छा नाही. त्यांची संयुक्त कुटुंब मालमत्ता.
3. पक्षांनी सहमती दर्शविली आहे की उक्त मालमत्ता अशा प्रकारे विभागली जाईलः

(अ) पहिल्या वेळापत्रकात वर्णन केलेली मालमत्ता पहिल्या पक्षास विशेषतः दिली जाईल. (ब) दुसर्‍या वेळापत्रकात वर्णन केलेली मालमत्ता दुसर्‍या पक्षाला पूर्णपणे दिली जाईल. (क) वरील तृतीय वेळापत्रकात वर्णन केलेली मालमत्ता तृतीय पक्षाला पूर्णपणे दिली जाईल.

1. आतापर्यंत पक्षांनी खाली दिलेल्या पद्धतीने प्रभाग रेकॉर्ड करण्याचा प्रस्ताव दिला आहेः

आता हे कृत्य याची साक्ष देत आहे

1. प्रत्येक पक्ष त्याला वाटेल त्या मालमत्तेत आपला सर्व / तिचा अविभाज्य हिस्सा, हक्क, हक्क आणि व्याज देईल आणि त्यास सोडेल जेणेकरून प्रत्येक पक्ष त्याला / तिला देण्यात आलेल्या मालमत्तेचा एकमात्र आणि परिपूर्ण मालक बनवू शकेल.
2. प्रत्येक पक्ष सहमत आहे की त्यांना कृतीची अंमलबजावणी आणि नोंदणी होईल आणि प्रक्रियेत गुंतलेला खर्च तितकाच सामायिक करेल.
3. प्रत्येक पक्ष सहमत आहे की या विभाजन कार्यातून देण्याचे त्यांनी मान्य केले त्या वाटेवर ते कोणतेही अडथळे आणणार नाहीत किंवा दावा करु शकणार नाहीत.

अनुसूची अ (अविभाजित मालमत्तेचा तपशील संयुक्त कुटूंबातील आहे) अनु. प्रथम मालमत्तेचे तपशील 1 2 3 4 प्रथम शैक्षणिक (श्री. ______________________ प्रथम पक्षाच्या वाट्याला दिलेली मालमत्ता) दुसर्‍या शाळेतील (मालमत्तेच्या वाट्याला दिलेली जागा श्री.

1. पहिला पक्ष
2. दुसरे पक्ष
3. तृतीय पक्ष

Property Partition Deed Format in Hindi

नीचे दिए गए विभाजन विलेख के लिए एक सामान्य प्रारूप है। यहाँ ध्यान देंइस विलेख में केवल पाठकों को विलेख का एक सामान्य दृष्टिकोण देना है।

विभाजन का यह कार्य __________this _________ के दिन किया गया

(१) श्री। _________________, एस / ओ। _____________, आयु ______ वर्ष, व्यवसाय __________, __________________________ पर रहते हैं। इसके बाद पहली पार्टी के रूप में जाना जाता है।

(२) Mr_________________, S / o। _____________, आयु ______ वर्ष, व्यवसाय __________, __________________________ पर रहते हैं। इसके बाद संदर्भ देंदूसरी पार्टी के रूप में एड।

(३) _________________________, D / o। _____________, आयु ______ वर्ष, व्यवसाय __________, __________________________ पर रहते हैं। इसके बाद तीसरे पक्ष के रूप में जाना जाता है।

जहाँ तक;

पार्टियां अपने संयुक्त और अविभाजित हिंदू परिवार के सदस्य और कॉपरेकर और ________________ पर स्थित एक घर की संपत्ति हैं, जिनका विवरण अनुसूची ‘ए’ में दिया गया है। प्रत्येक पार्टी हेटो उक्त संपत्ति में हिस्सेदारी का हकदार है।

पार्टियां अपने बीच उक्त संपत्तियों के विभाजन को लागू करने की इच्छा रखती हैं, क्योंकि वे अब अपने संयुक्त परिवार की संपत्ति के सदस्यों और कॉपर्कर के रूप में जारी रखने की इच्छा नहीं रखती हैं।

पार्टियों ने सहमति व्यक्त की है कि उक्त संपत्ति को इस तरह से विभाजित किया जाएगा:

(ए) पहली अनुसूची में वर्णित संपत्ति विशेष रूप से पहली पार्टी को आवंटित की जाएगी।

(बी) दूसरी अनुसूची में वर्णित संपत्ति को आवंटित किया जाएगाecond पार्टी विशेष रूप से।

(ग) उक्त तीसरी अनुसूची में वर्णित संपत्ति विशेष रूप से तीसरे पक्ष को आवंटित की जाएगी।

पार्टियों के सदस्यों ने कथित विभाजन को निम्नलिखित तरीके से प्रभावित करने और रिकॉर्ड करने का प्रस्ताव दिया है:

अब यह विलेख गवाह है कि

प्रत्येक पक्ष को हर कोई अपने सभी अविभाजित हिस्से को देने के लिए एक दूसरे को आवंटित संपत्ति में अपना सभी अविभाजित हिस्सा, सही, शीर्षक और ब्याज जारी करता है।उसे / उसे आवंटित की गई संपत्ति का ner।

प्रत्येक पक्ष इस बात से सहमत है कि वे विलेख निष्पादित और पंजीकृत होंगे और प्रक्रिया में शामिल खर्चों को समान रूप से साझा करेंगे।

प्रत्येक पार्टी इस बात से सहमत है कि वे इस विभाजन विलेख के माध्यम से देने के लिए सहमत हुए हिस्से पर कोई बाधा या दावा और अधिकार नहीं देंगे।

आयोजित करें

(अविभाजित संपत्तियों का विवरण संयुक्त परिवार से है)

क्र।

नहीं।

डेसंपत्ति का परिग्रहण

1

2

3

4

पहली अनुसूची

(श्री .__________________________ प्रथम पक्ष के हिस्से को आवंटित संपत्ति)

सेकंड स्कंध

(संपत्ति। श्री .__________________________ की पार्टी को आवंटित संपत्ति)

तृतीय अनुसूची

(संपत्ति Miss_________________________Third पार्टी के हिस्से को आवंटित)

गवाह:

FIRST PARTY

सेकंड पार्टी

और #13;

THIRD PARTY

Property Partition Deed Format in Telugu

Here is a partition deed sample in Telugu

విభజన దస్తావేజు కోసం సాధారణ ఫార్మాట్ క్రింద ఇవ్వబడింది. ఈ దస్తావేజు పాఠకులకు దస్తావేజు యొక్క సాధారణ దృక్పథాన్ని ఇవ్వడానికి మాత్రమే అని ఇక్కడ గమనించండి. విభజన యొక్క ఈ దస్తావేజు __________ ఈ _________ రోజు (1) మిస్టర్ ._________________, S / o ._____________, వయస్సు ______ సంవత్సరాలు, వృత్తి __________, వద్ద నివసిస్తున్నారు __________________________. ఇకపై మొదటి పార్టీగా సూచిస్తారు. (2) Mr_________________, S / o ._____________, వయస్సు ______ సంవత్సరాలు, వృత్తి __________, __________________________ వద్ద నివసిస్తున్నారు. ఇకపై రెండవ పార్టీగా సూచిస్తారు. (3) మిస్ _________________, డి / ఓ ._____________, వయసు ______ సంవత్సరాలు, వృత్తి __________, వద్ద నివసిస్తున్నారు __________________________. ఇకపై మూడవ పార్టీగా సూచిస్తారు. WHEREAS;

1. పార్టీలు వారి ఉమ్మడి మరియు అవిభక్త హిందూ కుటుంబ సభ్యులు మరియు ________________ వద్ద ఉన్న ఇంటి ఆస్తి, వీటి వివరాలు షెడ్యూల్ ‘ఎ’ లో ఇవ్వబడ్డాయి. ప్రతి పార్టీ ఇక్కడ చెప్పిన ఆస్తిలో వాటా పొందటానికి అర్హులు.
2. పార్టీలు తమలో తాము పేర్కొన్న లక్షణాల విభజనను తమలో తాము అమలు చేసుకోవాలని కోరుకుంటాయి, వారి ఉమ్మడి కుటుంబ ఆస్తి.
3. చెప్పిన ఆస్తిని ఈ విధంగా విభజించమని పార్టీలు అంగీకరించాయి:

(ఎ) మొదటి షెడ్యూల్‌లో వివరించిన ఆస్తి మొదటి పార్టీకి ప్రత్యేకంగా కేటాయించబడుతుంది. (బి) రెండవ షెడ్యూల్‌లో వివరించిన ఆస్తి రెండవ పార్టీకి ప్రత్యేకంగా కేటాయించబడుతుంది. (సి) చెప్పిన మూడవ షెడ్యూల్‌లో వివరించిన ఆస్తి మూడవ పార్టీకి ప్రత్యేకంగా కేటాయించబడుతుంది.

1. ఈ విభజనను క్రింది పద్ధతిలో అమలు చేయడానికి మరియు రికార్డ్ చేయడానికి పార్టీలు ఇక్కడ ప్రతిపాదించాయి:

ఇప్పుడు ఈ దస్తావేజు దానికి సాక్ష్యమిచ్చింది

1. ప్రతి పార్టీ అతనికి / ఆమెకు కేటాయించిన ఆస్తి యొక్క ఏకైక మరియు సంపూర్ణ యజమానిగా ఉండటానికి, ప్రతి పార్టీ తన / ఆమెకు అవిభక్త వాటా, హక్కు, శీర్షిక మరియు మరొకరికి కేటాయించిన ఆస్తిపై ఆసక్తిని మంజూరు చేస్తుంది మరియు విడుదల చేస్తుంది.
2. ప్రతి పార్టీ వారు దస్తావేజును అమలు చేసి నమోదు చేస్తారని అంగీకరిస్తారు మరియు ఈ ప్రక్రియలో పాల్గొనే ఖర్చులను సమానంగా పంచుకుంటారు.
3. ప్రతి పార్టీ వారు ఈ విభజన దస్తావేజు ద్వారా వదులుకోవడానికి అంగీకరించిన వాటాపై ఎటువంటి అవరోధాలు లేదా దావా మరియు హక్కును కలిగించవని అంగీకరిస్తారు.

షెడ్యూల్ A (అవిభక్త లక్షణాల వివరాలు ఉమ్మడి కుటుంబానికి చెందినవి) Sl. ఆస్తి వివరణ 1 2 3 4 మొదటి షెడ్యూల్ (శ్రీ వాటాకు కేటాయించిన ఆస్తి .__________________________ మొదటి పార్టీ) రెండవ షెడ్యూల్ (వాటాకు కేటాయించిన ఆస్తి శ్రీ .__________________________ రెండవ పార్టీ) మూడవ షెడ్యూల్ (మిస్ _________________________ మూడవ పార్టీ వాటాకు కేటాయించిన ఆస్తి) విట్నెస్:

1. మొదటి పార్టీ
2. రెండవ పార్టీ
3. మూడవ పార్టీ

Why is a Property Partition Deed needed?

When a property is co-owned by a group of individuals, there is a lot of uncertainty attached to it. Dividing the rights and responsibilities according to everyone’s wishes can be a tough task. Moreover, people might find themselves involved in familial disputes which makes it harder to co-own a property. In such cases, it is better to execute the partition deed and walk away with the individual’s shares. Once the consent of each co-owner is obtained, the legal process of partition can be carried out. Once done, each member gets to own their property and make some decisions regarding it. However, if there is no mutual consent involved, the interested party will have to file a lawsuit in court. 

Documents Required for Partition Deed Registration

Here are the documents required for the partition of land in India:

1. The preliminary document

2. Duty/Fees e-challan duty/fees e-challan duty/fees e-challan duty/Stamp Duty, Registration Fees, and Document Handling Fees, to name a few.

3. Print a copy of the PDE information.

4. Land revenue records as khasra and khatoni, as applicable in the deed

5. Transferred property map

6. Latest photographs of the parties in passport size

7. A current image of the property that has been transferred

8. Photo-identity cards for all parties and witnesses (Voter i-card, Kisan bahi, Bank passbook with photo, Id of the employer, Id of educational institution, ration card with photo, Aadhar card, LPG gas passbook with photo, pan card, driving licence, Arms licence with photo, voter list with photo, Degree / Mark sheet certificate with photo, and passport).

9. Copy of a Pan Card is compulsory where the valuation is above 5Lakhs.

10. Photographs of all the parties involved

11. PDE information sheet 

12.Copy of a Pan Card is compulsory where the valuation is above 5Lakhs.

Note: The amount of stamp duty and registration fees payable will depend on the location of the property and the value of the property. You can check the stamp duty rates and registration fees applicable in your state on the website of the Ministry of Finance.

Things to Keep in Mind When Executing a Partition Deed

In India, properties are frequently owned jointly, which inevitably leads to issues when the owners of the property disagree. The existence of numerous stakeholders makes selling a single share a difficult task. The main cause of this is the misunderstanding that joint ownership entails an equal ownership interest in the property.

By creating a partition deed, one can verify that the asset is divided legally and that each party has complete control over their respective half of the property, including the ability to sell, transfer, or gift it. Knowing what a partition deed is is crucial in India, where a property can give rise to both happiness and a lot of conflict. Here are some important things to keep in mind while executing a partition deed:

1. Consult with a Legal Expert: It’s advisable to consult with a lawyer or legal expert who specializes in property matters. They can guide you through the entire process and ensure that all legal requirements are met.
2. Clear Title and Ownership: Ensure that the property has a clear title, and all co-owners are in agreement regarding the partition. Any disputes should be resolved before proceeding.
3. Document Verification: Verify all property-related documents, including property title deeds, encumbrance certificates, and land records to confirm ownership and legal status.
4. Co-owner Agreement: Obtain the consent of all co-owners for the partition. All co-owners should be in agreement regarding the division of the property.
5. Property Valuation: Determine the fair market value of the property. You may need to engage a professional valuer to assess the property’s worth.
6. Drafting the Partition Deed: Prepare a partition deed with the help of a lawyer. The deed should clearly specify the property’s details, the shares each co-owner will receive, and other terms and conditions of the partition.
7. Stamp Duty and Registration: Pay the applicable stamp duty on the partition deed as per the Stamp Act of the respective state. After paying the stamp duty, the deed must be registered at the local sub-registrar office.
8. Adherence to State Laws: Be aware that property laws can vary from state to state in India. Ensure that your partition deed complies with the specific laws and regulations of the state in which the property is located.
9. Witnesses: The partition deed should be signed by all co-owners in the presence of at least two witnesses. The witnesses should also provide their signatures and contact information.
10. Distribution of Property: After the partition deed is executed and registered, distribute the property as per the agreed-upon shares among the co-owners.
11. Mutation of Records: After the partition is complete, update the property records at the local municipal office or panchayat to reflect the new ownership structure.
12. Tax Implications: Consider the tax implications of the partition, including capital gains tax and income tax, and consult with a tax expert if necessary.
13. Dispute Resolution: If there are disputes or disagreements among co-owners during the partition process, it may be necessary to seek legal remedies through the appropriate legal channels.
14. Post-Partition Formalities: Ensure that all co-owners receive their respective property shares and that the partition is completed without any pending issues.
15. Record Keeping: Maintain copies of all documents related to the partition for future reference and to establish ownership rights.

What is the Registration Process and Partition Deed Stamp Duty?

According to Section 17 of the Indian Registration Act, of 1908, a partition deed has to be registered in the office of the sub-registrar of the same area as that of the immovable asset. To finalise the partition deed, all individuals involved will have to pay registration charges and stamp duty according to the Indian Stamp Act, 1899. The value of stamp duty charges in Delhi is 2% of the total property value of the separated share. For Maharashtra, a 2% stamp duty charge is applicable along with 1% registration fees. 

As with any other registration, the partition deed must be recorded with the sub-office registrars in the location at which the property is located. In this scenario, Rs 1,000 in stamp duty is charged for each piece of the property. In addition, there will be a 500 rupee registration charge.

The division deed will not be legally binding if it is not registered by submitting the necessary stamp duty and registration fees. Consequently, Section 49 of the Registration Act, of 1908 prohibits the use of an unregistered partition deed as evidence.

Key Things to Remember

Your partition deed must be registered in accordance with Section 17 of the Indian Registration Act of 1908. By paying a stamp fee of Rs 1,000, the deed can be recorded. Keep in mind that unregistered deeds cannot be used as proof of anything.

How to Register a Partition Deed?

The registration process of a partition deed in India is as follows:

1. Creating the partition agreement: The initial step involves the creation of a partition agreement, a legally binding document that outlines the distribution of property ownership among co-owners. It is essential to engage a qualified attorney to draft this document, which should contain the following information:

• Names and addresses of all co-owners.
• A comprehensive description of the property undergoing partition.
• The allocation of shares for each co-owner in the property.
• Terms and conditions governing the partition, including any financial transactions or settlements among co-owners.

2. Settling the stamp duty: Following the creation of the partition agreement, the next critical step is to settle the stamp duty. Stamp duty is a government-imposed tax related to property transfers, and the amount varies based on the property’s value and the specific state regulations.

3. Submission of the partition agreement: After the stamp duty has been paid, it is necessary to submit the partition agreement to the local sub-registrar’s office, which corresponds to the property’s location. This process typically includes paying a filing fee.

4. Validation of the partition agreement: The sub-registrar’s office will scrutinize the partition agreement to ensure its compliance with legal requirements. If the document meets all necessary criteria, the sub-registrar will proceed to register it and issue a registration certificate.

What Happens if a Partition Deed Remains Unregistered?

The partition deed will not be legally binding if it is not registered by paying the necessary stamp duty and registration fees. Consequently, under Section 49 of the Registration Act of 1908, the unregistered division deed will not be accepted as evidence.

Partition Deed v/s Partition Suit: What Are the Differences?

Aspect	Partition Deed	Partition Suit
Purpose	Divide property ownership among co-owners through mutual agreement	Divide property ownership when co-owners cannot agree mutually
Initiation	Can be initiated by mutual consent of co-owners	Initiated by filing a lawsuit in a court of law
Pre-Requirements	Typically requires cooperation and agreement among co-owners	Requires a formal request for partition to co-owners; can proceed to court if parties disagree
Legal Time Limit	No specific time limit for execution; depends on co-owners’ agreement	Must be filed within three years of the right to partition accrual
Involvement of Legal System	Minimal involvement; drafted by a lawyer, submitted to sub-registrar’s office for registration	Involves legal proceedings, court hearings, and legal representation
Resolution of Disputes	Co-owners reach an agreement on property division	Court decides on property division based on legal principles
Function	Establishes and terminates co-ownership rights in jointly owned property	Establishes and terminates co-ownership rights, but through a court order

Both a partition deed and a partition suit serve the purpose of distributing property among co-owners, but they differ in their initiation, involvement of the legal system, and resolution of disputes. A partition deed relies on mutual consent, while a partition suit is a legal recourse when agreement cannot be reached.

Is Income Tax Levied on a Partition Deed?

Obtaining a partition deed does not require any transactions, hence there is no tax to be paid. A beneficiary is not needed to pay tax on the deed following the property division, but capital gains tax will be due based on the type of property.

Verbal Partition Settlement and Its Validity under the Law

According to the laws of inheritance among Hindus, Jains, Buddhists, and Sikhs, Class-I heirs of a property may enter into a verbal family settlement agreement and divide the property in accordance with their mutual preferences. It is not necessary to register the transaction because this oral agreement was achieved without using the partition deed as an instrument.

A division bench of the Delhi High Court declared in 2007 that there is no stamp duty due in the instance of a verbal property split. The case was Nitin Jain v. Anju Jain and others.

The court’s ruling said- it is legal to reach an oral family agreement dividing or partitioning the properties and then record a written memorandum in which the existing joint owners record that the property has already been divided or partitioned for perpetuity.

“Oral partitions have been recognised by courts in circumstances involving joint families. As defined by Section 2(15) of the Stamp Act, an oral partition is not a partition document. Therefore, since an oral partition is not an instrument, no stamp duty is due on it,” the HC added.

The shares of the co-owners in this type of organisation, however, remain undivided in the absence of a partition document. This also implies that they are not free to sell, give, or otherwise dispose of their individual portion of the property.

Can Share of Inherited Property be Sold?

It depends if you and the other owners of the inherited property are joint owners. You have the right to sell, transfer, or give away the property following the execution of the partition deed.

What happens when there is property partition among family members with mutual consent?

The deed of partition between co-owners may be signed by all co-owners when they have all agreed that the property should be divided.

The partition deed ensures that the property will be divided according to each person’s portion.

Co-owners acquire legal ownership of their respective portions of the property at the completion of the partition deed, and they are free to give, sell, or transfer those portions as they see fit.

What happens when there is property partition among family members without mutual consent?

If co-owners are unwilling to sign a partition deed, a lawsuit must be brought to the appropriate court.

Executing the partition document and registering it on a stamp paper with details of each joint owner’s portion must come next.

What happens When the Property is Partitioned?

A partition suit must be filed when the family decides to proceed with the partition deed. When there are any disagreements regarding the ownership of the property and you go to court to resolve the disagreement, a partition suit is filed. A partition deed must be signed if all parties are willing to resolve their differences amicably.

A partition deed specifies each co-share owner of the property. Only once this division deed has been properly registered with the Sub-Registrar office will it be regarded as a valid document. Following registration, the next step is to thoroughly register and process it on stamp paper.

Dissolution of HUF Deed Format

By completing a partition deed for each of the members, HUF may be dissolved. According to the Hindu Succession Act, the HUF coparceners shall get an equal share of the HUF’s assets. A coparcener is an individual who gains a title to the ancestral property through birth in the framework of a HUF.

DEED CONFIRMING PARTITION OF A HINDU UNDIVIDED FAMILY 

THIS DEED OF PARTITION is made on the ____ day of _____

BETWEEN

Mr.______, S/o______, R/o_______ of the first part;

AND

Mr.______, S/o______, R/o_______ of the second part;

AND

Mr.______, S/o______, R/o_______ of the third part; all three after it collectedly referred to as parties and individually as the first party, second party and third party respectively, which expression is inclusive of their related successors, heirs representatives and assigns.

WHEREAS

1. The parties consist a Hindu undivided family ruled by the Mitakshara School of Hindu law. By mutual consent, the parties, on the ___ day of ___ adjudged for doing a total partition of assets/properties of the Hindu undivided family. Per this decision, a division of the properties/assets was made on the _________ by mutual consents, convincing all the parties by it. share of each party was delivered and transferred in his name in the municipal records.

2. It is intended, that the parties may not controvert all the assets of the family laid in Schedule A to this deed, were partitioned.

NOW HENCE THIS DEED WITNESSES AS FOLLOWS:

1. The first party, the second party and the third party, consisting a Hindu undivided family having separated from each other and have divided the family assets as detailed in Schedule A of this deed.

2. assets were divided by parties into three parts, the following division between the parties has been adjudged upon;

Party of the first part………… All the property given in Schedule I

Party of the second part……… All the property given in Schedule II

Party of the third part……… All the property given in Schedule III

3. Each of the above stated parties is and shall be complete owner of property as given to him as per clause 2 above. None other party shall bear any rights, title or interest in those assets after it.

4. This partition was made by mutual agreement, leaving no power to any party in assailing on any ground whatsoever.

5. The first party shall keep original deed of partition. A true copy signed by all the parties shall be kept by other parties, which true copy shall be considered as effective as the original deed for all purposes and intents.

IN WITNESS WHEREOF, the parties to this deed have set their hands in the presence of

______________________

PARTY OF THE FIRST PART

______________________

PARTY OF THE SECOND PART

______________________

PARTY OF THE THIRD PART

Witnesses:

1.

2

Simplifying Partition Deed with NoBroker Legal Services

A partition deed simplifies property division, avoiding court disputes. It outlines terms, registered locally. Content may vary by religion or relationship. Co-owners gain individual property rights. Each property becomes a separate legal entity.

Streamline your property matters with NoBroker Legal Services. Our experts provide step-by-step assistance for hassle-free solutions. Contact us today for efficient, cost-effective real estate legal support.

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