Real estate basics: What is a conveyance deed?

[ecis2016.org] A conveyance deed is an essential document required for the purchase of a property. We explain importance of deed of conveyance and what a home buyer should look out for, when signing the conveyance deed document

In property transactions, one would invariably hear the term ‘conveyance deed’. Since conveyance deed is not something one would have a clear understanding of, unless one has dealt with matters of property, it becomes important to get clarity on the term –deed of conveyance, something we attempt to explore in this article.

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‘Conveyance’ refers to the act of transferring the title, ownership, rights and interests in a property, from one entity to another. The term ‘deed’ refers to an instrument, like a written document that is signed by all the parties to a contract, in this case, the seller and buyer. So, what is conveyance deed? Conveyance deed is a binding contract that is enforceable in a court of law. The deed of conveyance meaning, therefore, is a contract in which, the seller transfers all rights to the legal owner. The purchase of a property is not complete without a valid conveyance deed.

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Conveyance deed meaning

The terms conveyance deed and sale deed are often used interchangeably and while they refer to the same contract, there is a subtle difference between the two. When it comes to conveyance deed vs sale deed, all sales deeds are conveyance deeds but conveyance deeds can also include gift, exchange, mortgage and lease deeds.

It is important to note the difference between an agreement for sale and a sale/conveyance deed. An agreement for sale contains a promise to transfer a property in question in future, on satisfaction of certain terms and conditions. An agreement for sale does not, in itself, create any interest in or charge on a property. Therefore, the sale of a property is not complete without a conveyance deed.

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Contents of conveyance deed

1. The actual demarcation of the property.
2. Other rights annexed to the property and its use.
3. The full chain of titles, that is, all legal rights up to the present seller.
4. The method of delivery of the property to the buyer.
5. A memo of the consideration, stating how it has been received.
6. Any further applicable terms and conditions for the full transfer of ownership rights.
7. Power of attorney, if used.
8. Memo about the property ownership.
9. Signatures of both parties.

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Important things about conveyance deed

1. The seller is required to certify that the property is free of any legal encumbrance.
2. If a loan was taken against the property in question, then, the mortgage must be cleared before the conveyance deed is signed. Buyers have the option of having the conveyance deed checked at the local sub-registrar’s office.
3. The conveyance deed should state the exact date on which the property will be handed over to the buyer.
4. Within four months of the execution of the deed of conveyance, all the original documents related to the sale of the property, need to be produced for registration before the local registrar.
5. The deed of conveyance is required to be signed by at least two witnesses.

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Types of conveyance deeds

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There are three types of conveyance deeds:

Deed of conveyance of freehold property: A property can be converted into freehold status by the concerned authority, such as the Delhi Development Authority (DDA) or any state authority. The conveyance deed is given to the owner as a final document.

Deed of conveyance of leasehold property: The leasehold ownership of a property means the owner has the right to everything within the four walls of the property but it does not include the external or structural walls. The landlord is the owner of the structure, the common areas of the building and the land it is built upon.

Deed of conveyance subject to mortgage: In this case, subject to the said mortgage the purchaser can, from time to time, enter into and possess or enjoy the land in question and its premises.

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What is the purpose of a conveyance deed?

The purpose of a conveyance deed or a sales deed is to legally document that the seller of a property has transferred all the authority and the ownership regarding a property to the buyer. The implication of the conveyance of property document is paramount due to the legal technicalities. It is likely to save you from other kinds of fraudulent claims and activities.

Who prepares a conveyance deed?

As mentioned in the article, the conveyance deed is legal documentation of the transfer of authority and ownership of a buyer. There is the intervention of the government to ensure that this is a legal transaction. To facilitate this process, there is a requirement of the lawyer, and in certain cases the real estate agent. They enable the two parties to systematically draw the deed.  Their help is often required as they know the legalities and are in terms of their requirements. The government obtains money or revenue from the registration of this conveyance deed of the stamp duty that is required for the deed.

Sample format of a conveyance deed

Procedure for obtaining conveyance deed

The Conveyance Deed is executed on non-judicial stamp paper and registered by presenting it at the nearest Registrar’s office. Once the registration is done, the Stamp Duty and Registration Fee have to be paid. The Stamp Duty and registry charges are different state-wise.

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There are certain things that one needs to be careful of while executing the conveyance deed.

• Both the signing parties need to be present while the written document is being executed.
• Their document has to be ultimately registered with the Sub-Registrar of Assurances. This is a compulsory step and cannot be skipped in any manner.
• The execution of this document has to be attested by a minimum of two people.
• The stamp duty is the way for the Government to obtain revenue out of this, it should be necessarily and unavoidably paid.
• The implication of this process must be clearly understood by both the sprites partaking in this. There should be no ambiguity regarding the transfer of the property and the due ownership and the authority over it.  No party should engage in fraudulent activities.

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Documents required for conveyance deed

• Registered Agreement for sale entered into with the seller.
• Mutation entries/ Property card.
• Location plan.
• City survey plan or survey plan from the revenue department.
• Layout Plot plan approved by the local authority.
• Architect certificate about the entitlement of undivided interest in the entire Layout Plot, common areas and the facilities by each of the entity or the structure constructed or to be constructed on such Layout Plot.
• Certificate under Urban Land Ceiling Act, 1976.’
• Building/ Structure Plan approved by the appropriate authority.
• Commencement Certificate.
• Completion Certificate.
• Occupancy Certificate (exempted if not available).
• List of owners.
• Proof of payment of Stamp Duty.
• Proof of Registration.
• Development agreement or power of attorney or agreement for sale, if executed by the seller.
• Draft conveyance deed / Declaration proposed to be executed in favour of the applicant.

Differences between an agreement to sell and conveyance deed

Since a registered agreement to sell initiates the process of property transaction, it could fall under the broad category of being a conveyance deed. However, it should not be confused with the sale deed, which ultimately acts as the proof of the completion of the transaction that was initiated through the execution of the agreement to sell.

Conveyance deed vs sale deed

So, how do you explain conveyance deed vs sale deed? Any legal document that acts as a legal proof of transfer of property rights, fall in the broad category of conveyance deeds. That way, a sale deed is also a conveyance deed. Other property transfer documents that fall under the category of conveyance deed include gift deed, exchange deed, relinquishment deed, etc. This also means in conveyance deed vs sale deed, while all sale deeds are conveyance deeds, not all conveyance deeds are sale deeds.

What if the conveyance deed is lost?

If the conveyance deed is lost due to negligence of the banker, then, it is important to take the following steps:

• The owner should file a police complaint as early as possible. Keep a copy of the first information report (FIR) securely, as home buyers may ask for it at the time of sale.
• You can post an advertisement in a newspaper about the loss of the conveyance deed documents. You may have to wait till a specified time of about 15 days, to know if someone finds and returns the documents within the period.
• One can prepare an affidavit and get the same notarised. It should include all the property details, FIR details and information about the notified newspaper ad.
• You can get a legally certified copy of the conveyance deed from the sub-registrar’s office, where the property was registered. You will need to pay the specified charges and provide the relevant documents.

Key points to remember

Note: A conveyance deed, executed on a non-judicial stamp paper, must be registered. Once this is done, upon payment of the requisite fees, it is transferred in the public domain. The government receives its revenue in the form of stamp duty and registration charges.

Deemed conveyance deed

Once the state government issues a deemed conveyance deed, the law considers the deed to be executed even if the developer has not executed the conveyance deed. In order to have a deemed conveyance deed, one needs to apply with the required documents to the concerned authorities. The developer should also ensure that both the parties are present as the authority law would pass a judgment only after hearing both the parties.

The following are the documents required for applying a deemed conveyance deed:

• Relevant land documents such as land revenue, municipal records and the like.
• A copy of the agreement between the landlord and the developer regarding the development of a property.
• Registered and stamped agreement copies of each flat.
• A copy of the approved building plan. 

Conditions for a deemed conveyance

The following are the conditions for being eligible for a deemed conveyance deed:

• A minimum of 60% of the total number of flats in the property should be sold.
• The flat owners should have formed a cooperative society at least 3-4 months before applying for a deemed conveyance.
• There should be clear communication between this cooperative society and the builder where the builder has either promised to provide a complete conveyance deed or refused to provide for the same.
• A resolution regarding the same should be passed before applying for a deemed conveyance deed. 

FAQs

(With inputs from Sneha Sharon Mammen and Sunita Mishra)

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Source: https://ecis2016.org
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