It is clear from the above definition that a purchase contract contains a promise to transfer an asset in question in the future to meet certain conditions. Thus, this agreement itself does not create any right or interest in the property for the proposed buyer. The sale of real estate is associated with complex procedures. For a hassle-free transaction, all parties need to understand the entire sales process, including knowing the differences between a sales contract and a deed of sale from a legal perspective. A sale agreement is an agreement to sell a property in the future. This agreement defines the conditions under which the property in question is transferred. The Real Estate Transfer Act of 1882, which regulates matters related to the sale and transfer of home ownership, defines a contract of purchase or a contract of sale as follows: The Supreme Court further reaffirmed the importance of the purchase agreement between the builder and the buyer, since it recently ruled that the period of allocation of a dwelling to a home buyer must be taken into account from the date of the builder-buyer contract and not from the date of registration of the project under the Real Estate (Regulation and Development) Act, 2016. The court also ordered the RERA authorities to order the payment of compensation to the builder in accordance with the contract of sale, the sanctity of which was maintained by that order. A purchase contract, on the other hand, is an enforceable contract. It evokes the possibility of a future transfer. The risks, with an agreement on the sale, remain with the seller until the execution of the deed of sale. In the event of the Seller`s failure to sell or take possession of the property to the Buyer, the Buyer shall be entitled to certain performance under the provisions of the Specific Reparations Act 1963.
A similar right is available for the seller under the contract to require a specific service from the buyer. Finally, home buyers should keep in mind that only a registered deed of sale can facilitate the transfer of ownership of real estate. Those who have purchased a property under a purchase agreement are not entitled to title to the property. You must immediately ask the seller to prepare the deed of sale and have it registered under the Native American Registration Act. With the exception of the limited right granted to purchasers under section 53A, any sale that does not meet the requirements of sections 54 and 55 of the “Transfer of Ownership Act” will not transfer ownership or transfer shares of the property to the buyer. According to the Indian Registration Act of 1908, registration is required for the sale of properties worth more than a hundred rupees. Thus, if a buyer buys a property under a purchase contract but does not pursue it with the execution of a deed of sale, he has no rights to the property. In general, developers, who are not builders, enter into an agreement on the construction of apartments. These activities attract VAT and SERVICE TAX. The average buyer must enter into two agreements.
One, for the undivided part of the land, (sale agreement) and the other, construction agreement. The execution of two contracts confuses the buyer. Is it necessary? NO. According to the rules, for a building under construction, in addition to the registration of the UDS (payment of 11% of the value as stamp duty and registration fees), a construction contract is signed between the developer and the buyer through a deed of sale. The buyer only has to pay 2% (1% stamp duty and 1% registration fee) for the registration of the construction contract. If the building is not included in the deed of sale, the savings for the buyer is 9% of the cost of the building. But the other side of the coin is that there is no deed of sale for a new apartment at the time of the first sale. If the same apartment is resold, the buyer must pay 11% stamp duty and registration fee for the UDS and the value of the apartment. In fact, the building does not receive a deed of sale until the second sale. However, many sub-registrars have refused to include UDS alone in the deed of sale of completed real estate, even if it is an initial sale. They stated that there can be no construction agreement between the buyer and the developer once the building is completed and the regulator (such as the CMDA or the DTCP) has issued a certificate of completion.
Therefore, for completed buildings, as in the case of a second sale, the UDS and the value of the building should be included in the deed of sale, many sub-registrars insisted. The developer community argued that even after receiving the certificate of completion, several works would be pending in the apartment. .