Agreement to Sale

An Agreement to Sale is a formal contract between a buyer and a seller that outlines the terms and conditions of a property transaction. Agreement to Sell or Deed of Sale Agreement is registered for sale of lease hold property or when there is a promise to transfer in future. As the name specifies, Agreement to sell is registered when the seller is not the absolute owner of the property & agrees to sell the property as the title vests with the government. Thus, it is agreed between the parties that whenever, in future, the clear title shall be given by the government, the concerned property shall be sold to the intended purchaser.

Key Features of an Agreement to Sale:

An Agreement to Sale contains specific details that protect the interests of both the buyer and the seller. Some of its essential elements include:

• Property Details: A precise description of the property, including its location, size, and title details.

• Sale Price: The agreed-upon price for the property, along with payment terms (advance, instalment structure, etc.)

• Timelines: Deadlines for completing payments, property registration, and other necessary formalities.

• Conditions Precedent: Specific conditions that must be fulfilled by either party, such as clearing loans on the property or obtaining approvals from authorities.

• Default Penalties: Provisions for penalties if either party fails to honor the agreement.

• Signatures: The agreement is only valid when signed by both parties and, in some cases, witnesses.

Understanding the sale agreement format is essential to ensure all necessary clauses are included for a legally binding contract. A well-structured format outlines the rights and obligations of both parties, reducing the risk of disputes and ensuring a smooth property transaction

An agreement to sale with delivery of possession of property is a compulsorily registerable document and an unregistered sale agreement has no value in the eyes of law. The agreement must be registered in the office of the concerned Sub-Registrar within whose jurisdiction the property is situated after payment of applicable stamp duty and registration fee. While a sale deed is used for the transfer of ownership of freehold properties, a sale agreement is generally used for the transfer of leasehold properties such as flats, plots, shops etc. allotted by the DDA, L&DO, and MCD etc.

After the judgment of the Hon’ble Supreme Court in the Suraj Lamp case, the registration of sale agreement had been stopped by Delhi Government, but in November, 2014, it had been decided to once again allow its registration alongwith GPA before the Sub-Registrar Offices for the transfer of leasehold properties in Delhi. Till now, the owners of apartments and offices in multi-storied buildings in areas such as those in Connaught Place, Barakhamba Road, Nehru Place, Netaji Subhash Place, Bhikaji Cama Place, Saket, Janak Puri, Rajendra Place, Pusa Road, Rohini, Dwarka etc. we are not able to get their lease deeds registered and obtain loans against such property due to the absence of registered builder buyer agreement. But now, the owners of such property can get the Builder Buyer agreement stamped/registered in the Sub Registrar office after paying the applicable Stamp Duty.

We also provide services for the impounding and stamping of unregistered/notary agreement to sell and Builder Buyer agreements executed in the years 2001, 2002, 2003 or 2004 by getting it impounded from the Collector of Stamps/SDM office for freehold conversion of leasehold DDA flats or plots.

Stamping & Registration of Agreement to Sale in Delhi:

Following is some of the Important Points to note in relation to registration of agreement to Sale:

• Stamp Duty: Equivalent to that payable on the registration of a sale deed i.e. 6% in case of men and 4% in case of women needs to be paid for the registration.

• Registration fee: Shall be payable @ 1% of the value of the property as per the circle rate.

• Both the parties and two witnesses: Along with their identification documents need to be present during the presentation of the agreement of sale before the Sub-Registrar.

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