Conveyance Deed and Sale Deed: How Different Are They?

Purchasing a property is no overnight decision, given its comprehensive process. Though factors like budget, location, and resale value play a part, one must recognise the documentation process, without which your real estate transaction is considered null and void in the eyes of the law. Nonetheless, in this blog, we will discuss two such deeds (Conveyance and Sale) from their meaning to their types and differences. 

Conveyance Deed

A document that concludes the buying and selling process, the conveyance deed, is a legal document that transfers property ownership from the seller to the buyer, serving as evidence in case of property-related issues.
Other than selling or purchasing the property, the deed includes gifting, leasing, mortgaging, and exchanging. 

Importance of Conveyance Deed

• Transfer of ownership: The conveyance deed serves as a legal document that facilitates the transfer of ownership rights from the seller (grantor) to the buyer (grantee). It establishes the buyer's rightful ownership and title over the property.
• Legal validity: A properly executed and registered conveyance deed provides legal validity to the property transaction. It ensures that the transfer of ownership is legally binding and recognized by the law.
• Proof of ownership: The conveyance deed acts as crucial evidence of ownership. It serves as proof that the buyer has acquired the property and holds the legal rights to possess, use, and transfer the property in the future.
• Protection against disputes: By executing a conveyance deed, the buyer gains protection against potential disputes related to property ownership. It helps establish clarity and prevents conflicting claims over the property.
• Title verification: During the conveyance deed process, title verification and due diligence are conducted to ensure that the property being transferred has a clear and marketable title. This helps identify any existing encumbrances, liens, or legal issues associated with the property.
• Registration requirement: In many jurisdictions, the registration of a conveyance deed is mandatory for it to be legally enforceable. Registering the deed imparts public notice of the property transfer and offers additional legal protection to the buyer.
• Financial transactions: A conveyance deed is often required when seeking financing or mortgage on the property. Lenders may require a registered conveyance deed as collateral and evidence of ownership.
• Can be used as proof in a court of law: For any legal battles regarding property disputes, the conveyance deed could serve as evidence, helping resolve issues quickly.
• Ownership: Acting as an essential document for the right of ownership.
• Transfer of property rights: The availability of a conveyance deed helps you legally transfer property rights.  
• Acts as a certificate: The conveyance deed certifies that the property is not legally entangled. 

Elements of the Conveyance Deed

• Mentioning of demarcation, if present.
• Details of both parties, the buyer and seller, such as name, age, and address.
• The signature of both buyer and seller is to be present.
• Terms and conditions concerning the transfer of property.
• The chain of title and method of delivery of property to the buyer.
• The sale deed. 

Types of Conveyance Deeds

• Conveyance deed for Freehold Properties: In this case, the owner has complete control over their property and isn’t accountable to anyone, barring the guidelines laid down by the legal authorities.
• Conveyance deed for Leasehold Properties: In these cases, the occupant is not the property owner and is on a lease agreement, usually consisting of 99 years. Nevertheless, the landlord, who may be an individual or builder, is the rightful owner of the property.
• Conveyance Deed for Mortgage Properties: A property being mortgaged has nothing to do with the ownership, with the buyer having all the rights. 

Documents required for Conveyance Deed

• Registered sale agreement
• Property card/ mutation entries
• The location and survey plan concerning the revenue department
• The layout and structure plans approved by the authorities
• List of certificates: Commencement, Completion, Occupancy, and architect
• List of owners
• Receipt of stamp duty payment
• On the deal materialising, power of attorney or development agreement to be presented
• Draft the Conveyance Deed

Sale Deed

A legal document that transfers the rights of ownership from the seller to the buyer. It requires the signatures of both parties, with at least two witnesses present, following which the property is registered at the sub-registrar’s office. 

Importance of Sale Deed

1. Transfer of ownership: The sale deed serves as proof of the transfer of ownership rights from the seller to the buyer. It legally establishes the buyer as the new owner of the property.
2. Legal validity: A properly executed and registered sale deed provides legal validity to the property transaction. It ensures that the transfer of ownership is legally binding and recognized by the law.
3. Property rights and title: The sale deed contains details about the property, including its description, boundaries, and any encumbrances. It helps in verifying the title and ownership rights of the property being sold.
4. Evidence of transaction: The sale deed acts as concrete evidence of the transaction between the buyer and the seller. It outlines the terms and conditions agreed upon, including the purchase price, payment terms, and any other specific clauses or agreements.
5. Protection against disputes: By executing a sale deed, the buyer gains protection against potential disputes or claims by others over the property. It provides legal recourse in case of any disagreement or breach of the terms mentioned in the deed.
6. Registration requirement: In many jurisdictions, the registration of a sale deed is mandatory for it to be legally enforceable. Registering the deed imparts public notice of the property transfer, prevents fraud, and offers additional legal protection to the buyer.
7. Financial transactions: Lenders or financial institutions often require a registered sale deed as collateral when providing financing or mortgage on the property. It acts as evidence of ownership and security for the loan

Elements of Sale Deed

• Details of seller and buyer: Details of both parties, such as name, address, age, and contact information.
• Details of the property: Information about the fixed asset, such as area, dimensions, and type of construction.
• Indemnity Clause: This is added to safeguard the buyer's interest and protect them from any defaulting activities of the previous owner. 
• Payment details and mode: This includes the final price at which the seller agrees to transfer ownership of the property to the buyer. In the case of any advance payments or instalments, all specifications must be mentioned. The mode can be bank transfer, cheque, and cash. 
• Right to examine: The buyer can thoroughly inspect the seller’s documents before registration.
• Witnesses during the transaction: A clause in the deed suggests two witnesses being present at the time of signing the deed, who need to share their details, such as name, address, and age. 
• Possession of property: The deed will specify the date the buyer will gain possession.

List of documents required for Sale Deed

• Sale agreement
• Title deed draft
• Signed agreement between the builder and property owner
• The allotment letter provided by the housing board
• Power of attorney, if needed
• NOC (No Objection Certificate) for resale flat
• Blueprint of necessary authorities 
• CC (completion certificate)
• Tax receipts of property 
• Encumbrance certificate 
• Receipt of stamp duty 
• Identity verification of all parties involved
• Possession letter
• Bank papers for loan against the property
• Occupancy certificate (OC)
• Passport size photographs 

Critical differences between Conveyance Deed and Sale Deed

• A Conveyance Deed may not necessarily involve a monetary exchange during the transfer of ownership from the seller to the buyer, the other ways being gifting, leasing, and other exchanges.
• All Sale Deeds are conveyance deeds but not the other way around.
• A Conveyance Deed implies its roles and purpose, unlike the Sale Deed.
• In Sale Deed, a transfer can be with or without any contemplation. On the other hand, a conveyance deed can also be addressed as a transfer deed. 

Hopefully, the above blog has served to educate you about the Conveyance Deed and Sales Deed, resolving all the doubts between them. 

• Which is better sale deed or conveyance deed?

When comparing a sale deed and a conveyance deed, it's important to understand their respective purposes. A sale deed is a legal document that transfers the ownership of a property from the seller to the buyer. It establishes the transaction and outlines the terms and conditions of the sale. On the other hand, a conveyance deed is a broader term that refers to any legal document that transfers an interest in property from one party to another. While a sale deed is a type of conveyance deed, there are other types as well, such as gift deeds or exchange deeds.

• What type of deed is best for house?

When it comes to houses, the most commonly used and recommended type of deed is a Warranty Deed. A Warranty Deed provides the highest level of protection and guarantees that the seller has the legal right to sell the property and that there are no undisclosed liens or claims on the property. It assures the buyer that the property is free from any title defects.

Warranty Deeds typically include covenants or promises from the seller to defend the buyer against any future claims related to the property. This type of deed offers the buyer greater peace of mind and legal protection. 

• What is the safest type of deed?

The safest type of deed for property ownership is a Warranty Deed. A Warranty Deed provides the highest level of protection for the buyer. It guarantees that the seller holds clear and marketable title to the property, free from any undisclosed encumbrances or claims. The seller also warrants to defend the buyer against any future legal challenges to the title. This type of deed offers the strongest assurances and legal safeguards, making it the preferred choice for ensuring the safety and integrity of property ownership.