Making a valid deed

Making a valid deed
11 Nov, 2007, 0230 hrs IST,Ashish Gupta, TNN

In case of property transactions, various types pf deeds need to be drawn up. These may relate to agreement to sell, sale agreement, power of attorney and so on. Certain basic points need to be taken into account while drawing out these legal documents. The main content of a deed includes:

1. The names of the parties -buyer and seller, lessor and lessee etc

2. Terms and conditions related to the sale or transfer of the property

3. Details of the parties

4. Details of property in question

5. Sale consideration agreed on 6. Advance amount paid 7. Mode of payments 8. Time limits for payment of consideration

9. Timeframe for handing over original documents of the property 10.Timeframe for handing over possession of property 11. Indemnity provisions for the parties.

The deeds should be prepared on non-judicial stamp paper of requisite value as prescribed by the Stamp Act of the State concerned. Different States have different valuations and stamp rules related to property transactions in respect of sale, mortgage and leases.The purchaser is liable to pay the stamp duty in accordance with the applicable stamp rules. Normally, a deed should be executed by all the parties concerned.

All pages of the deed are to be signed. The deed should be witnessed by at least two witnesses giving their full names, signatures, particulars and addresses. Most deeds related to immovable property need compulsory registration at the jurisdictional sub-registrar's office. All the parties concerned need to be present at the time of registration. All documents should be presented in original.

In case the purchaser cannot be present personally before the sub-registrar, he can give a power of attorney to someone to sign and present the documents on his behalf. The photos of the purchaser, thumb prints and signatures are entered on the deed. The documents should be presented for registration within four months from the date of execution. If it is not done within four months, a grace period of another four months is allowed on payment of a penalty.

A maximum penalty of 10 times the registration charges may be levied by the registrar. The liability to pay the stamp duty as well as registration charges lies with the purchaser of the property. The terms and conditions contained in the deeds should be clear and unambiguous. Any vague references and ambiguous connotations may give rise to misinterpretation and disputes between the parties.

The details of the property should be specifically and clearly defined. The exact location of the property, whether the property is a leasehold property or a freehold property etc should be mentioned. The details of how the owner of the property got ownership should also be mentioned. The details of registration already done with the office of the registrar should be mentioned as well. It should also be stated whether the property is free from any encumbrances or not, or whether there are any charges on the property.

The date from which the transaction is going to be effective should also be mentioned in the deed. The purpose of drawing the deed should be clearly mentioned - whether it is an agreement to sell, a sale agreement, a lease agreement, or a licence agreement. The law will go by the nomenclature used to find the true nature of the agreement. The deed should be signed, preferably by the parties themselves, in person.

In case the person cannot be present due to unavoidable circumstances, the executor should have proper power of attorney from the original party to enter into the transaction on behalf of the original party. Such power of attorney should be registered with the office of the registrar. The signatures of the parties should be properly attested.