Here's everything that you need to know about a conveyance deed –
What is Conveyance Deed?
The term "Deed" means a written legal contract that binds the parties to its terms and can be proved in the court as evidence.
The term 'Conveyance' is used when there is transfer of ownership or legal title in a property from one person to another. Hence, a conveyance deed is a legal document between a transferor and a transferee, which proves that a title or ownership in the property along with all other rights related to the property have been transferred from one person to another.v It informs that the property is free from any restrictions and disputes. Both parties sign it and it can be produced in a court if any dispute relating to the agreement arises in future.
However, a conveyance deed is a wide term which not only includes a sale of the property but also other kinds of transfers such as gift, exchange, lease, mortgage, relinquishment and other transfers.
A conveyance deed is valid only when the property is sold for a valid consideration (usually money) except in the case of a gift deed which results out of love and affection.
It can be signed for either movable or immovable property.
A conveyance deed is executed in accordance with the legal provisions under the Transfer of Property Act 1882, Registration Act 1908 and Indian Stamp Act, 1899.
Essential Elements in a Conveyance Deed
In order to be valid and acceptable in a court, a conveyance deed needs to contain some essential elements. For instance, it must:
- Establish exact boundaries of the property to avoid any dispute relating to land ownership,
- - State that all the rights relating to the property have been transferred along with the property,
- - Provide details regarding delivery and acceptance of the property,
- - State all terms and conditions relating to the transfer,
- - Be made on a non-judicial stamp paper and signed by both parties,
- - Mention full names, addresses and other requisite details of the seller and the buyer,
- - State that the property is free from any disputes and restrictions,
- - Be signed by at least two witnesses
- - Be in writing and notarized, and
- - Be registered through the local registrar’s office by submitting appropriate registration fee. Registration is proof that the property is free from any disputes and has been transferred to the buyer permanently with a clean title.
Once the registration is complete, the buyer becomes the absolute owner of the property and the conveyance process gets over officially. A lawyer and a real estate agent can help two parties compose, sign, and register a deed of conveyance during a transaction. The government obtains its revenue from the stamp duty and registration fees.
Why is it important?
For instance, your uncle gives you a piece of land without any written legal document and verbally states that the property belongs to you. Now, you build a house on that land but unfortunately, your uncle suddenly passes away. His son files a case against you stating that the land belongs to him after the death of his father. Since there is no Will or any legal document by your uncle which proves that you are the owner of that property, the only option left is to move the Court for getting the ownership of the land. But there is a possibility of losing the property as you have no document to prove that it was given to you by your uncle.
Now consider the other situation where you have a proper written legal document signed by you and your uncle which states that you are the absolute owner of the property. This document can be easily produced in any court to prove your ownership and other rights over the property.
Having a conveyance deed saves you from legal battles that can be filed against you and gives you full rights over the property including the right to sell, rent, mortgage and construct upon. It is advisable to sign a conveyance deed not only when you are entering into an agreement with a third party but also with your friends or relatives. A conveyance deed is also helpful in protecting you from fraudulent transfers of property.
What happens if you don't have a Conveyance Deed?
Not signing a conveyance deed can lead you to great trouble. You won't be able to save yourself from legal disputes in the absence of any written legal document which can prove your legal title in the property.
In the absence of the conveyance deed, you may face the following:
- - You cannot become the absolute owner of the property;
- -You cannot claim a valid title and interest in the property;
- - Your property won't be registered in the government records due to which all bills including electricity, tax and other bills will be issued in the name of the original property owner;
- - You may have to apply for costly and lengthy deemed conveyance process in case of non-cooperation by the builder;
- - You may lose your rights of renovating / reconstructing the property even in circumstances such as natural calamities, without permission of the original owner of the property.
Therefore, it is advisable to sign a conveyance deed if you are planning to transfer your property to another person.
Necessary Documents required for conveyance deed –
There are various documents that you require in order to execute a valid conveyance deed :-
1 Final copy of the conveyance deed
2 Society's registration certificate, if any
3 Power of attorney, if any
4 Identity card & address proof
5 Clearance certificates
6 Signing authority’s identity card
7 PAN card of both parties
8 Copies of electricity bill and property taxes paid
9 Authorization certificate and Occupancy Certificate
10 Proof of stamp duty paid
11 Registration charges
12 Area specification and building plan
13 List of facilities provided
14 Commencement Certificate
15 Mutation extracts
16 Development or purchase agreement b/w land owner and builder
17 Agreement between builder and buyer
At what stage does the conveyance deed come into play?
The Conveyance process begins when a buyer expresses interest in purchasing a property and makes an offer to the seller for it. If a seller accepts the offer, both are required to make and enter into an agreement for the sale of property which is called a conveyance deed. The deed is made with mutually agreed terms between the buyer and seller and once both parties sign, it turns into a valid contract enforceable in a court of law. After signing and exchanging the conveyance deed, the buyer is required to pay stamp duty, arrange necessary documents, & inspect for any claims or disputes that might affect the title of the property.
After the above formalities are over, the buyer and seller are required to conduct a meeting to exchange the transfer documents, stamp duty form and other legal documents. The buyer will also have to pay the remaining purchase price and other legal fees.
After the settlement between the buyer and seller, the buyer is required to submit the conveyance deed and other documents for registration in the local sub-registrar's office and sign it in the presence of two witnesses. The sub-registrar then inspects the documents submitted and after his satisfaction gives a registration number and registers the deed.
Remember that all original documents need to be submitted in the sub-registrar's office within four months of the execution of the deed. At this stage, there will also usually be a discharge of existing mortgages, withdrawal of any existing caveats, transfer of title, and transfer of the mortgage to the new mortgagee, if need be. The buyer is also required to inform other authorities that he is the new owner of the property.
Why do you need the help of a Lawyer?
You can now understand why the process of transfer of the property is so complex and lengthy. Starting from obtaining of title, examining the property, collecting the tax information and details of any liens on the property, reviewing the building or plot plan to preparing the loan documents, recording the documents, inspecting the property for any mortgage information and registering the final conveyance deed in the local sub-registrar's office requires a lot of patience, time, money, energy and obviously the help of a legal expert. Therefore, it is advisable to take the help of a lawyer to prepare a conveyance deed and also during the conveyance process, instead of doing things on your own, especially when you don't have any knowledge about the real estate laws.
You may also contact us at - +91-22-25452903, 66543333 or Email us at - sales@squarefeetgroup.in
