Difference Between Sale Deed and Conveyance Deed

When buying or selling property, paperwork can be overwhelming. Understanding legal jargons is critical to avoid future complications. Two terms that often used interchangeably but are entirely different in the purpose they serve are conveyance deed and sale deed. While the sale deed is specific to transactions involving the sale of a property, the conveyance deed is a broader legal instrument that can include various types of transfers, such as a gift, exchange, or lease. 

Knowing the difference between the two can help ensure a smooth and legally sound property transaction. In this blog, we have explained what sets conveyance deed and sale deed apart. Let's dive in!

What is a Conveyance Deed? 

A conveyance deed is a legal document that acts as a proof of transfer of ownership of property from one party to another. It is generally executed at the time of sale or transfer of immovable property including but not limited to land, houses, apartments, etc. Conveyance deed encompassed various types of deeds, such as gift deeds, exchange deeds, partition deeds, release deeds, mortgage deeds, or lease deeds. It establishes legal proof of ownership rights and outlines the rights and responsibilities of the property owner.

Types of Conveyance Deed

Here are the types of conveyance deeds you need to know:

• Sale Deed: This is the most common type of conveyance deed used when a property is sold. It transfers ownership from the seller to the buyer in exchange for a specified amount of money.
• Gift Deed: A conveyance deed used to transfer property from one person to another as a gift. No monetary exchange takes place, but the deed still legally transfers ownership.
• Lease Deed: This is used when property rights are temporarily transferred for a specific period. It grants the lessee (tenant) the right to use the property for a particular time, while ownership remains with the lessor (landlord).
• Mortgage Deed: This type of deed is used when property is transferred to a lender (usually a bank) as security for a loan. Once the loan is repaid, the ownership fully reverts to the borrower.
• Exchange Deed: This is used when properties are exchanged between two parties. Both parties transfer ownership to each other without monetary exchange.
• Partition Deed: Used when property is divided among co-owners, such as in the case of inheritance or joint property. It formally divides the ownership shares.
• Settlement Deed: This deed is used to settle disputes over property ownership, often among family members or co-owners, by clearly stating the terms of settlement.
• Relinquishment Deed: Used when a co-owner voluntarily gives up their share in a property, often in favor of another co-owner.

What Does Conveyance Deed Contain?

A conveyance deed must include certain essential elements to ensure that the property transfer is clear, legally valid, and enforceable. Here are the typical contents of a conveyance deed:

1. Title/Heading: The document should clearly state the type of deed, such as "Sale Deed," "Gift Deed," or "Conveyance Deed."

2. Details of the Parties Involved

• Name, age, and address of the seller (or transferor).
• Name, age, and address of the buyer (or transferee).
• In case of legal entities, the names and details of authorized signatories.

3. Property Description

• Detailed description of the property being transferred, including its location, area, boundaries, and identification number (if applicable).
• Details of any structures on the property (if applicable).

4. Sale Consideration (if applicable)

• The sale price or amount paid by the buyer.
• The payment terms, such as whether it's a lump sum or paid in installments.

5. Transfer of Rights

• A clear statement that the ownership rights, title, and interest in the property are being transferred from the seller to the buyer.

6. Warranties and Indemnity

• A clause where the seller guarantees that they have the legal right to sell the property.
• The seller may also indemnify the buyer against any legal issues, encumbrances, or disputes arising from the sale.

7. Encumbrance Details

• A declaration that the property is free from any legal disputes, mortgages, or claims.
• If the property is encumbered (e.g., under a mortgage), the details of the encumbrance must be disclosed.

8. Possession and Title Transfer

• A clause stating the date of possession when the buyer will take full ownership and control of the property.
• The handover of title and relevant documents like the original title deed.

9. Covenants

• Covenants are promises made by the seller regarding the condition of the property and future responsibilities, such as the right to peaceful possession or payment of taxes.

10. Liabilities

• A clause stating that any pending dues such as property taxes, utility bills, or other liabilities before the sale are the seller's responsibility.

11. Execution of Deed

• Signatures of both parties (seller and buyer).
• Signatures of witnesses to validate the transaction.

12. Registration Clause

• A clause mentioning that the deed will be registered with the relevant local authority (such as the Sub-Registrar’s office).
• Details about who will bear the registration charges (usually the buyer) and the procedure for registration.

13. Dispute Resolution Clause

• A clause that outlines how disputes, if any, related to the conveyance will be resolved, usually through arbitration or legal proceedings.

14. Miscellaneous Clauses

• Any additional clauses that may be specific to the transaction, such as timeframes for payment, maintenance of common areas (if applicable), or specific conditions agreed upon by both parties.

What are the Legal Implications of Conveyance Deed

Conveyance deed carries significant legal implications for both buyer and seller. It serves as the proof as the transfer of ownership of property from the seller to the buyer. The deed also contains indemnity clause where the seller indemnifies or protects the buyer from any future legal disputes or claims over the property.

The conveyance deed is also considered a binding legal contract between the buyer and seller. Both parties are legally obligated to fulfil the terms as stated in the deed. Additionally, the conveyance deed often included the right to possession, meaning that once the deed is executed and registered, the buyer is entitled to take the possession of the property.

What is a Sale Deed?

Sale deed is a legal document that officially transfers ownership of a property from the seller (vendor) to the buyer (purchaser) in exchange for a specific amount of money. It is one of the most critical documents in a property transaction, as it confirms that the sale has been completed and the buyer now legally owns the property.

Key Components of Sale Deed

1. Parties Involved: It includes the full details of the seller and buyer, such as their names, addresses, and identification information.
2. Property Description: A detailed description of the property being sold, including its location, size, boundaries, and any specific identification numbers like survey or plot numbers.
3. Sale Consideration: The sale price (amount paid by the buyer) is clearly mentioned, along with payment terms (whether full payment has been made or if there are any outstanding amounts).
4. Transfer of Ownership: The sale deed explicitly states that the ownership rights, title, and interest in the property are transferred from the seller to the buyer once the deed is signed and registered.
5. Warranties by the Seller: The seller declares that they have the legal right to sell the property, that it is free from any encumbrances (such as legal disputes or mortgages), and that the buyer will receive clear and undisputed ownership.
6. Indemnity Clause: The seller promises to indemnify (protect) the buyer from any future claims, disputes, or issues related to the property.
7. Execution and Registration: The sale deed must be signed by both parties in the presence of witnesses, and it must be registered with the local sub-registrar’s office to be legally valid. Without registration, the sale deed has no legal standing, and ownership does not transfer.

Sale Deed vs Conveyance Deed: Key Differences