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Real estate basics: What is a conveyance deed?

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A conveyance deed is an essential document required for the purchase of a property. We explain its importance and what a home buyer should look out for when signing the document

‘Conveyance’ refers to the act of transferring the title, ownership, rights, and interests in a property, from one entity to another. The term ‘deed’ refers to an instrument, like a written document that is signed by all the parties to a contract, in this case, the seller and buyer. It is a binding contract that is enforceable in a court of law. A conveyance deed is, therefore, a contract in which, the seller transfers all rights to the legal owner. The purchase of a property is not complete without a valid conveyance deed.

The terms conveyance deed and sale deed are often used interchangeably and while they refer to the same contract, there is a subtle difference between the two. All sales deeds are conveyance deeds but conveyance deeds can also include gift, exchange, mortgage, and lease deeds.

It is important to note the difference between an agreement for sale and a sale/conveyance deed. An agreement for sale contains a promise to transfer a property in question in future, on the satisfaction of certain terms and conditions. An agreement for sale does not, in itself, create any interest in or charge on a property. Therefore, the sale of a property is not complete without a conveyance deed.

Contents of Conveyance Deed

  1. The actual demarcation of the property.
  2. Other rights annexed to the property and its use.
  3. The full chain of titles, that is all legal rights up until the present seller.
  4. The method of delivery of the property to the buyer.
  5. A memo of the consideration, stating how it has been received.
  6. Any further applicable terms and conditions for the full transfer of ownership rights.

Important things about Conveyance Deed

  1. The seller is required to certify that the property is free of any legal encumbrance.
  2. If a loan was taken against the property in question, then, the mortgage must be cleared before the deed is signed. Buyers have the option of having this checked at the local sub-registrar’s office.
  3. The conveyance deed should state the exact date on which the property will be handed over to the buyer.
  4. Within four months of the execution of the deed, all the original documents related to the sale of the property, need to be produced for registration before the local registrar.
  5. The deed is required to be signed by at least two witnesses.

Types of conveyance deeds

There are three types of conveyance deeds:

Deed of conveyance of freehold property: A property can be converted into freehold status by the concerned authority, such as the Delhi Development Authority (DDA) or any state authority. The conveyance deed is given to the owner as a final document.

Deed of conveyance of leasehold property: The leasehold ownership of a property means the owner has the right to everything within the four walls of the property but it does not include the external or structural walls. The landlord is the owner of the structure, the common areas of the building, and the land it is built upon.

Deed of conveyance subject to the mortgage: In this case, subject to the said mortgage the purchaser can, from time to time, enter into and possess or enjoy the land in question and its premises.

Procedure for obtaining Conveyance Deed

The Conveyance Deed is executed on non-judicial stamp paper and registered by presenting it at the nearest Registrar’s office. Once the registration is done, the Stamp Duty and Registration Fee have to be paid. The Stamp Duty and registry charges are different state-wise.

Documents required for Conveyance Deed

  1. Registered Agreement for sale entered into with the seller
  2. Mutation entries/ Property card,
  3. Location Plan
  4. City survey plan or survey plan from the revenue department.
  5. Layout Plot plan approved by the local authority
  6. Architect certificate about the entitlement of undivided interest in the entire Layout Plot, common areas and the facilities by each of the entity or the structure constructed or to be constructed on such Layout Plot.
  7. Certificate under Urban Land Ceiling Act, 1976
  8. Building/ Structure Plan approved by the appropriate authority
  9. Commencement Certificate
  10. Completion Certificate,
  11. Occupancy Certificate (exempted if not available),
  12. List of owners
  13. Proof of payment of Stamp Duty
  14. Proof of Registration
  15. Development agreement or power of attorney or agreement for sale, if executed by the seller
  16. Draft conveyance deed / Declaration proposed to be executed in favor of the applicant.

Difference between Conveyance Deed and Sale Deed

Any legal document that acts as legal proof of transfer of property rights, fall in the broad category of conveyance deeds. That way, a sale deed is also a conveyance deed. Other property transfer documents that fall under the category of conveyance deed include gift deed, exchange deed, relinquishment deed, etc. This also means that while all sale deeds are conveyance deeds, not all conveyance deeds are sale deeds.

Key points to remember

  • Conveyance deeds are governed by the Registration Act, 1908.
  • Sale deeds and gift deeds are different types of conveyance deeds.
  • To be created on a non-judicial stamp paper, a conveyance deed follows the blueprint set under the agreement to sell.

SOURCE –  https://housing.com/news/real-estate-basics-conveyance-deed/

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