Table of Contents
Frequently asked questions
What is a Sale Agreement?
A Sale Agreement is a legal contract between a seller and a buyer, outlining the terms and conditions for the sale of a property. It records the mutual consent to sell and buy the property at an agreed price.
Is the Sale Agreement legally binding?
Yes, once signed by both parties, a Sale Agreement becomes legally binding. It can be enforced in a court of law if either party breaches the terms.
What is the purpose of paying "Earnest Money" or an "Advance"?
Earnest Money is a token amount paid by the buyer to show genuine intent to purchase the property. It secures the deal and is typically adjusted against the total sale consideration.
Can the Sale Agreement be canceled?
Yes, the Sale Agreement can be canceled by mutual consent. However, if one party defaults, the consequences (such as forfeiture of earnest money or legal action for specific performance) are governed by the terms stated in the Agreement.
Who pays the Stamp Duty and Registration Charges?
Unless otherwise agreed, the buyer is responsible for paying the applicable stamp duty, registration fees, and other statutory charges related to the registration of the Sale Deed.
What happens if the buyer fails to pay the balance amount?
If the buyer fails to pay the balance amount within the agreed timeline, the seller may terminate the agreement and forfeit the earnest money, as per the terms of the Agreement.
What happens if the seller refuses to sell after signing the Sale Agreement?
If the seller refuses to sell without a valid reason, the buyer may file a suit for specific performance in court, requesting the court to direct the seller to complete the sale.
Is possession given at the time of signing the Sale Agreement?
No, possession is usually handed over at the time of execution and registration of the final Sale Deed, after the full payment is made by the buyer.
What documents should the seller provide before finalizing the sale?
The seller should provide clear title documents, previous Sale Deeds, Encumbrance Certificate, Tax Receipts, No Objection Certificates (NOCs) from relevant authorities, Occupancy Certificate, and Society Clearance (if applicable).
Should I register the Sale Agreement?
While registration of a Sale Agreement is not mandatory for all property transactions, it is advisable, especially when an advance payment is made, to provide legal sanctity. In some states, registration is compulsory if possession is handed over under the Sale Agreement.
What is the difference between a Sale Agreement and a Sale Deed?
A Sale Agreement precedes the Sale Deed. It outlines the intention to sell and buy, along with terms and conditions. A Sale Deed, however, is an actual transfer of ownership and must be registered with the Sub-Registrar.
What if there are pending dues on the property?
It is the seller’s responsibility to clear all dues (like property tax, maintenance charges, or utility bills) before transferring possession, unless otherwise agreed.
Sample Draft
This Sale Agreement ("Agreement") is made and executed on this 29th day of April, 2025, at Mumbai, Maharashtra.
BY AND BETWEEN:
Mr. Rahul Sharma, aged about 45 years, son of Late Mr. Vijay Sharma, residing at 501, Lotus Residency, Bandra (West), Mumbai – 400050, hereinafter referred to as the "Seller" (which expression shall, unless repugnant to the context or meaning thereof, mean and include his heirs, successors, executors, administrators and assigns)
OF THE FIRST PART
AND
Ms. Priya Nair, aged about 38 years, daughter of Mr. Ramesh Nair, residing at 1203, Sunflower Apartments, Andheri (East), Mumbai – 400069, hereinafter referred to as the "Buyer" (which expression shall, unless repugnant to the context or meaning thereof, mean and include her heirs, successors, executors, administrators and assigns)
OF THE SECOND PART
The Seller and the Buyer are hereinafter collectively referred to as the "Parties" and individually as a "Party".
WHEREAS:
The Seller is the sole and absolute owner of the immovable property bearing Flat No. 703, Seventh Floor, Tower B, Green Meadows Complex, situated at Lokhandwala, Andheri (West), Mumbai – 400053, Maharashtra, admeasuring 1,200 square feet built-up area, along with one covered car parking, and undivided proportionate share in the land (hereinafter referred to as the "Property").
The Seller has absolute right, title and interest in the Property, free from all encumbrances, liens, mortgages, claims, charges, litigation, or third-party rights.
The Buyer has agreed to purchase and the Seller has agreed to sell the Property for a total consideration of Rupees Two Crore Fifty Lakhs Only (INR 2,50,00,000/-) under the terms and conditions set out herein.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
SALE AND CONSIDERATION
The Seller agrees to sell and the Buyer agrees to purchase the Property for a total sale consideration of INR 2,50,00,000/- (Indian Rupees Two Crore Fifty Lakhs Only).
The Buyer has paid an amount of INR 25,00,000/- (Indian Rupees Twenty-Five Lakhs Only) as advance/earnest money (the "Earnest Money") to the Seller on the execution of this Agreement, the receipt of which the Seller hereby acknowledges.
The balance amount of INR 2,25,00,000/- (Indian Rupees Two Crore Twenty-Five Lakhs Only) shall be paid by the Buyer on or before the date of execution and registration of the Sale Deed.
PAYMENT TERMS
The Buyer shall make the payment of the balance consideration amount through a banker's cheque, demand draft, or direct bank transfer into the Seller’s designated bank account at the time of execution of the Sale Deed.
All applicable taxes, charges, and duties including Stamp Duty, Registration Fees, and any other statutory dues, shall be borne and paid solely by the Buyer.
POSSESSION
The Seller agrees to hand over vacant, peaceful, and physical possession of the Property to the Buyer at the time of registration of the Sale Deed.
TITLE AND ENCUMBRANCE
The Seller declares and represents that he is the sole and absolute owner of the Property.
The Seller warrants that the Property is free from any encumbrances, mortgages, litigation, acquisition proceedings, claims, or any third-party rights.
The Seller agrees to provide all necessary documents, including the original title documents, previous Sale Deeds, No Objection Certificates (NOCs), Society Clearance, and Occupancy Certificate, to enable the Buyer to verify the title of the Property.
REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants that:
He has full power and authority to enter into and perform this Agreement.
No other person has any right, title, or interest in the Property.
There are no unpaid dues, taxes, maintenance charges, or utility bills pending in respect of the Property.
The Buyer represents and warrants that:
She has inspected the Property to her satisfaction.
She has understood and accepted the condition of the Property on an "as-is-where-is" basis.
INDEMNITY
The Seller hereby agrees to indemnify and keep indemnified the Buyer against all losses, damages, costs, claims, or expenses that may arise due to any defect in title or breach of the Seller’s representations.
DEFAULT
If the Buyer defaults in making the balance payment within the stipulated time, the Seller shall have the right to terminate this Agreement and forfeit the Earnest Money.
If the Seller defaults in completing the sale or transferring the Property, the Buyer shall have the right to seek specific performance of this Agreement through appropriate legal remedies.
GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the laws of India.
The courts at Mumbai shall have exclusive jurisdiction to entertain and try all matters arising out of or in connection with this Agreement.
MISCELLANEOUS
This Agreement constitutes the entire understanding between the Parties and supersedes all prior discussions, agreements, and understandings, whether written or oral.
Any amendments to this Agreement shall be made only in writing and signed by both Parties.
The headings in this Agreement are inserted for convenience only and shall not affect the construction of its provisions.
IN WITNESS WHEREOF, the Parties hereto have executed this Sale Agreement on the day, month, and year first above written.
Signed and Delivered by the Seller
___________________
(Rahul Sharma)
Signed and Delivered by the Buyer
___________________
(Priya Nair)
Witnesses:
___________________
(Name & Address)
___________________
(Name & Address)