How thrilling would it be to buy your own dream home or receive a piece of land from your family? But years later, someone challenges your possession of the property, claiming the property does not belong to you legally. Here, the conveyance deed becomes your staunchest ally.
A conveyance deed is not just a sheet of paper. It is a legal stamp of approval where property ownership from one party to another is officially transferred. Whether you purchase land, inherit it, lease it, or receive it as a gift, such a document validates your rights by applying the full weight of the law behind them.
However, this is also one area where many get confused: they believe that a conveyance deed is a sale deed, which is not true. Although sale deeds apply only to the sale of property, conveyance covers selling as well as other forms of transfer, such as gifts, lease deeds, and settlement deeds.
So, in this Brick & Bolt article, we will reveal everything you should know about conveyance deeds: their contents, types, why these deeds are important, and what exactly one should do if one ever loses one. It is also important to know about this document if you’re working with real estate. Let’s get on it and ensure you know everything to safeguard your property rights!
What Do You Mean By Conveyance Deed?
A conveyance deed is an official document used to formally transfer ownership or title from one party to several parties concerning any immovable property, including land, a home, or any commercial property. It protects the new owner’s legal rights by providing unmistakable evidence that the property is in his control. To conclude, conveyance deeds are indispensable in property transactions, as they ensure that ownership is documented and that the proper registration is free from disputes.
Key Features of Conveyance Deed
- Legal Ownership Transfer: This ensures a rightful transfer of property from a seller to a buyer.
- Binding Contract: Forwarding their acceptance, the deed legally binds both parties to the agreed terms once signed.
- Protects Against Future Claims: This serves as proof of ownership and averts legal disputes or claims on the property.
- Registered Document: To be legally valid, one needs to register the deed with the appropriate sub-registrar.
- Covers Various Transfers: This covers gifts, wills, leases, and exchanges and is not limited to sales alone.
Importance of Conveyance Deed
- Legal Proof of Ownership
Unless you have a conveyance deed, even if you have purchased the property, you have no official proof of ownership. This will function as a vital document to stake your ownership claim with the government.
- Prevents Future Disputes
This document further guarantees that no third party can claim ownership of your property under any circumstances. It sets forth the terms of the property’s transfer in a binding manner, thus protecting both parties.
- Essential for Selling or Transferring the Property
If you plan on selling, gifting, or transferring the reviewed property in the future, the conveyance deed is an obligatory document. It fulfills your claim of having all the rights regarding the property before transferring them to a third party.
- Protects Against Encumbrances
The deed presents the full facts of the encumbrances, such as mortgages or easements, existing on the property. This enables the buyer to be fully informed of liabilities before purchase.
- Required for Property Loans
Banks and financial institutions demand a conveyance deed when loans are applied against property. Sometimes, it becomes really difficult to obtain or repay a mortgage loan or refinance without such a document.
What Does It Include?
A conveyance deed is a vital legal document that should be written with utmost precision for a smooth transfer of ownership. It has several important details regarding the terms of the titles of the property being transferred and serves to protect both buyer and seller. Here’s what constitutes a typical conveyance deed:
- Details of the Parties Involved
The deed contains identifying information, including names, addresses, and identification numbers of the transferor (seller, donor, lessor, etc.) and transferee (buyer, donee, lessee, etc.). This helps describe who will transfer the property and who will receive it.
- Complete Property Description
A thorough description of the property, along with the street address, area, boundaries, survey number, and other special identifying criteria, is given to avoid ambiguity concerning the asset to be transferred.
- Transfer Terms and Consideration Amount
If it is a sale, the consideration amount is also clearly mentioned. If it is a gift deed, then it mentions no consideration for the transfer. If it is an exchange deed, the properties being swapped will be detailed.
- Ownership History and Encumbrance Status
The deed shall state the presence or absence of mortgages, loans, or legal disputes on the property. Free from encumbrance should be mentioned in the deed as a kind of assurance for the buyer that no other claims are made on the property with respect to financial or legal liens.
- Signatures and Witnesses
Though laws vary from state to state, the general requirements for deed validity are that the deed be signed by all parties concerned and witnessed by at least two persons.
- Indemnity Clause
This protects the buyer from all claims, monetary or otherwise, that arise because of defects in the title resulting from the transfer.
- Registration Details
To be enforceable in law, a conveyance deed must be registered at the sub-registrar’s office in your area.
A well-worded conveyance deed guarantees ownership rights, prevents disputes, and the smooth and easy transfer of property itself.
Types of Conveyance Deeds
A deed of conveyance is a legal documentation by which immovable property ownership is transferred from one person to another. However, not all transfers are done through monetary sales. Based on the nature of the transfer, conveyance deeds have different varieties. It can be stated that the deeds most commonly used include:
Sales Deed
The deed of sale is the most general type of conveyance deed in transactions relating to property, whereby, on the basis thereof, one person sells his property to another person for monetary consideration. The deed of sale includes:
- Agreed sale price
- Payment terms
- Description of property
- Encumbrance status (property free of any legal or financial liabilities)
- Signature of both parties and witnesses
As soon as the sale deed is executed and registered, the buyer becomes the legal owner of the property.
Exchange Deed
This deed of conveyance is executed for the exchange of properties by two parties instead of cash. This kind of deed is common when landowners and/or builders are involved in exchanging land for built property. A typical example could be a farmer who exchanges agricultural land for residential land. Some aspects mentioned in an exchange deed include:
- Details of both properties involved in the exchange
- Determining a fair value for both properties for fair exchange
- Terms and conditions as agreed upon by both parties
Exchange deeds must also be registered under local authorities for validity to become enforceable.
Settlement Deed
A settlement deed is used when an owner desires to disperse or transfer the property among family members, guaranteeing transparency and preventing future litigation. They are frequently utilized in familial settlements wherein an owner formally transfers property rights to a relative. Key features of a settlement deed include:
- The relationship between the parties involved
- The portion of the property being transferred
- Conditions or restrictions imposed, if any
- Signatures of family members and witnesses
A settlement deed is an important part of inheritance planning because it handles the amicable distribution of property among family members.
Gift Deed
A gift deed may be executed to effect a transfer of title to property without exchanging any money. It may apply when someone wishes to gift property to a family member or intimate friend. A gift deed must specifically state:
- Such transfer is voluntary
- The name of the donee.
- That the property is free and clear from any encumbrances of any kind.
As opposed to a sale deed, a gift deed does not involve consideration, that is, payment for the transfer of ownership. However, the gift deed must be presented before the sub-registrar for it to be valid.
Will Deed
A will deed is a document outlining the manner of disposition of a testator’s estate after death. It differs from other conveyance deeds in that the transfer of ownership takes place after the death of the original owner. The will deed has the following basic characteristics:
- The names of the persons who are to inherit the property;
- Particular directions for property distribution and
- The name of an executor chosen to carry out the instructions in the will.
A will does not require registration. Nevertheless, if it is registered, it would help avoid legal disputes within the heirs.
Lease Deed
In a lease deed, a landlord (lessor) grants another person/corporation (lessee) the right to use and occupy their property for a particular period in exchange for rent. The lease deed describes the following:
- Duration of the lease
- Agreed rental amount
- Rights and responsibilities of both landlord & tenant
- Conditions for lease renewal or termination
Thus, a lease deed does not result in the loss of ownership; it simply gives the tenant the right to use the property for the agreed term.
Documents You May Need For Conveyance Deed
Some essential documents must be presented to ensure a smooth and legally valid transfer. These documents demonstrate the authenticity of a property, ownership history, and legal and regulatory compliance. Here are the basic documents generally needed to execute any conveyance deed:
- Sale Agreement of Property
This is a fundamental document that indicates the terms and conditions set between a buyer and seller before the actual transfer of property. It sets forth the sale price, payment schedule, and stipulations pertinent to both parties.
- Property Card and Mutation Entries
A mutation entry and the property card show the seller’s legal title upon receipt of proceeds and that the property has been legitimately transferred in the seller’s name. The local revenue authorities maintain these.
- Approved Structure Plan and Layout Plan
For properties within a housing development or apartment complex, approval of the design and layout plan from the municipal authority is necessary. This verifies that the construction or building conforms to the zoning law and construction rules of the concerned authority.
- Location and Survey Plan
A location and survey plan from the revenue department confirms the existence of the property and certifies the boundary of the same. This will prevent disputes over encroachment into the adjoining lands.
- List of All Previous Owners
For resale properties, there needs to be a record of each previous owner. This is done to clear any possible discrepancy in ownership history and requires documentation by the seller to the effect that he has a clear title to the property.
- Completion, Commencement and Occupancy Certificate
These certificates, issued by local municipal authorities, confirm that the building was legally built and safe for residence:
- Commencement Certificate (CC)-It certifies that the construction started with the proper approvals.
- Completion Certificate (CC)– CC certifies that the building meets safety and construction standards.
- Occupancy Certificate (OC)– OC states that the property is safe and fit for residence under the governing laws.
In some cases, some of these certificates may not exist, especially for older properties; however, the absence should be clarified with the authorities.
- Power of Attorney or Development Agreement (If Applicable)
In the event that the seller is not executing the sale him or herself, but has authorized a representative to perform the sale in their stead, then a power of attorney-P.O.A-between the seller and the representative should be presented.
This may also include a development agreement in case the property falls under an ongoing real estate development project.
- Stamp Duty Payment and Registration
Stamp duty must be paid on the conveyance deed, which must be registered in the office of the sub-registrar. Proof includes a receipt showing that stamp duty was paid.
- Draft of the Conveyance Deed
A draft conveyance deed must be prepared before the final deeds are signed. The deed shall give detailed particulars about the property, the seller and buyer involved, the amount of money involved, and any other legal conditions.
The documents would protect the interest of both parties through their clear definition and make sure that no disputes over the property taking place arise, followed by the legal transfer of it.
How To Obtain A Conveyance Deed?
Here’s a step-by-step guide on how to obtain a conveyance deed.
Verify Ownership and Property Title
Before starting this process, ensuring the property ownership status is essential. The buyer must examine that the seller has a good title to the property, with no encumbrances, disputes, or challenges against it. This can be checked from the property card, sale deed, and ownership records maintained by local authorities.
Prepare the Required Documents
The deed of conveyance cannot be executed without bringing the above mentioned required documents into record and ready.
Pay Stamp Duty and Registration
Failing to register the conveyance deed at the sub-registrar’s office will lead to an invalid deed. Stamp duty & registration fees need to be paid by the buyer; the charges depend on the property’s locale and its valuation. These fees can be either paid online or at designated banks.
Execute the Deed and Register It
Both parties need to report to the subregistrar’s office to sign the conveyance deed in the the presence of witnesses. The deed is registered, and the new owner receives a certified copy.
Obtain the Final Registered Conveyance Deed
Upon registration of the conveyance deed, it is handed over to the buyer. Proof of legal ownership: the document must be kept safely since it acts as evidence of ownership and may be needed in future transactions.
What Happens If You Lose a Conveyance Deed?
Losing a conveyance deed could be a very exasperating affair, for it is the legal standing of ownership of a property. In the absence of it, proving ownership or carrying out future transactions related to selling, leasing, or mortgaging will become quite difficult. However, there are a few steps one must take in order to procure a new copy or replace the untraceable one.
- File a Police Complaint
Firstly, a person must submit a First Information Report (FIR) at the local police station where the owner resides after the deed is lost. This is important to secure against any fraudulent activity-such as illegal transfers or disputes.
Usually, the FIR should act as proof that the document in question has been lost and was not intentionally misplaced or destroyed.
- Publish a Public Notice
It is always better to give a notice in a local newspaper declaring to the public about the loss. So, anyone who might have found it can return it and also thus secure the chance that said deed is not put to any fraudulent use. A detailed description of the property and ownership should be included in the notice.
- Apply for a Certified Copy
Another option is to secure a certified copy of the conveyance deed from the sub-registrar’s office under which the property was initially registered. You will have to file:
- Your FIR copy
- An affidavit stating the loss of the deed
- Property Details and proof of ownership
- Execute an Indemnity Bond
Some authorities may require you to execute an indemnity bond that you will be held responsible for any future claims that might arise from the loss of the document.
- Keep the New Deed Safe
After obtaining a duplicate or certified copy, this document has to be preserved in a very safe location to avoid any future loss.
While losing a conveyance deed is troublesome, following all the aforementioned steps assures that the property can legally be recovered or replaced without any loss of rights.
Conclusion
Conveying clear ownership of property is of utmost importance because it removes the ambiguity associated with either party’s position. Knowledge of its elements, types, and legal implications could help both sellers and buyers carry out the transactions without a hitch, thus averting any potential disputes. Heightening concern toward proper documentation and adherence to appropriate legal requirements infuses transparency and enforceability into this process. To protect their interests, it is always advisable to get legal professionals involved and verify all issues before concluding a transfer.
Hemali Patel