Sale Deed vs Agreement to Sell — What Each Does, and the Mistakes That Cost Buyers

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પગલું-દર-પગલું: શું કરવું

1. 1

   Understand the two documents' jobs

   Promise now, transfer later — different law, different duty.

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   The agreement to sell (Section 54, TPA: it "does not, of itself, create any interest in the property") records price, advance, completion date, title-clearance and loan conditions, penalties and possession terms. The sale deed executes the transfer — registered, full duty paid, ownership passes. Registration of the agreement itself is optional in most states (Maharashtra's agreement-for-sale regime and builder sales under RERA differ — builder agreements MUST be registered), but registering it strengthens priority and is mandatory to claim possession-protection under Section 53A.

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2. 2

   The buyer-protection clauses that matter

   Advance protection, title conditions, time-essence, penalties.

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   In the agreement, insist on: advance held refundable with penalty if the seller's title fails or he backs out; a completion date with time as essence (or courts read flexibility into it); seller's obligation to clear encumbrances/taxes; possession and risk terms; and liquidated damages both ways. Pay advances by bank transfer against signed receipts. NEVER pay large fractions on an unregistered agreement to a seller you haven't title-checked — that is how double-sale victims are made.

3. 3

   If the seller backs out: specific performance

   Courts can force the sale — the 2018 amendment strengthened it.

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   A ready-and-willing buyer can sue for specific performance — the court orders the seller to execute the deed. The 2018 Specific Relief Act amendment made specific performance the rule rather than the exception (no more easy escape by offering damages). Limitation: 3 years from the fixed completion date or refusal. Protect the suit by lodging your agreement, notices showing your readiness (funds arranged), and a lis pendens registration once filed — it warns off resale buyers.

4. 4

   If the buyer defaults — and closing properly

   Forfeiture limits, and the deed-day checklist.

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   Sellers: forfeit only reasonable earnest money on buyer default (courts cut excessive forfeitures; state RERA rules cap builder forfeitures ~10%). Buyers at closing: verify updated encumbrance certificate to the deed date, compute duty on the higher of price/circle value, complete TDS (1% above ₹50 lakh), and register with possession + originals handover recorded — then mutation. The agreement should die into the deed with a clause confirming full and final settlement.

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