What Is A Conveyance Deed & Why Is It Important? (Real Estate)

Whenever you set out to buy a property, you will come across the term conveyance deed. It is one of the important documents that are essential to close the property deal. Here, you will come across several details with regards to the conveyance deed, why it is so important, the things you should keep an eye out on, and signing the document as well.

Until and unless, you have dealt with different property matters, it can be hard to know the ins and outs of the conveyance deed. So, you need to have much more details and clarity on what the conveyance deed is and why it is such an important paper.

The Meaning

Conveyance in the literary sense refers to moving from one place to another. So, if you put the two words together, you will understand that the conveyance deed refers to the process of moving the title, the ownership, and the rights of a property from one person to the other.

The deed refers to the instrument, so, it is the paper which is signed by both the parties that will make the details in it legally binding. Therefore, the conveyance deed is the binding contract which is applicable in the court of law. Via this contract, one can prove that all the rights to the property have been transferred from the seller to the buyer. Until and unless, you sign the conveyance deed, the property will not be deemed as sold.

Sale deed is another word which is often used interchangeably with conveyance deed. However, there is some difference between the two. While all sales deed is conveyance deed, the reverse is not so. Some of the conveyance deeds can also deal with mortgages and lease apart from property.

Yet another document that you may have heard of is the agreement for sale. This document is largely different from the conveyance deed. The agreement of sale is a document that mainly promises to transfer the property in the future. It lists down several terms and conditions. However, this document is not enough to validate the change of ownership rights of a property.

So, if you are looking to buy or sell a property, the conveyance deed is one of the most important documents out there. No sale of the property will be deemed complete unless this document has been duly signed.

The Difference Between The Conveyance Deed And The Sale Deed

The conveyance deed is listing the details of the property to be transferred from one person to the other and no consideration is needed.

The sale deed is a document needed when the property is sold to the buyer in exchange for consideration. It will therefore always involve consideration which can be both monetary and non-monetary as well.

Further, the conveyance deed spells the time for which the transfer of rights is made. It is often not permanent. The sale deed initiates the transfer of rights to property in a permanent way.

The presence of a conveyance deed infers that the buyer will have rights to the property but under no account can he choose to sell it. On the other hand, the sale deed still gives the buyer the power to both use and sell the property.

So, there is plenty of inherent differences between the two deeds and you should be familiar with the details to know the one you need to opt for while buying property.

So, now that we have established the importance of the conveyance deed, let us look into the details of the matter contained in the deed.

The Content Of The Deed

Here are the details of what all are a part of the conveyance deed. These details will come in handy to give you a clear picture of what to expect from the deed.

The demarcation of the property
The complete hierarchy of ownership of the property
The delivery method
The memo for the method stating clearly how the property was received
Power of attorney, if applicable
The rights annexed to the property
Any other terms and conditions
Memo of the property ownership
Signature of both the parties

These are the key content that are a part of the conveyance deed. Each of these details is very important and it helps you be sure that you will be able to do the complete and legal transfer of rights from the seller to the buyer.

The Important Things To Note

When you are making the conveyance deed, there are some important points that you have to bear in mind. Here they are.

The seller needs to certify that the property doesn’t have any open legal disputes
The deed should clearly state the exact date when the property will be handed over to the buyer
If any loan was taken against the property, the mortgages should be duly cleared before signing the conveyance deed. If buyers want to be sure, they can have the deed checked at the sub registrar’s office and they will tell if any loan is still applicable on the property being sold.
At least two witnesses are required for the signing of the deed
Within four months of signing the deed, all the original documents about the property should be produced for registration. This process will be carried out in the presence of the local registrar.

This would thereby seal the transfer of property and rights.

The Type Of Deeds

The conveyance deeds can be broadly categorized into three different types. Let us see what they are.

The Conveyance Deed Of Freehold Property

Only state authorities have the right to give the property a freehold status. In this case, the owner gets complete rights over the land and the property. There is no limitation governing its use. In such cases, the conveyance deed ends up acting as the final document.

The Conveyance Deed Of Leasehold Property

Ownership of such a property means that the buyer has the right to everything present inside the walls of the property. However, the external area and the structural walls are not included. The common areas of the building and the land where the property is built remain under the ownership of the landlord.

The Conveyance Deed Subject To A Mortgage

As per the deed details, the buyer will possess or enjoy the land from time to time based on the clauses of the said mortgage. They won’t have complete ownership of the property all the time as they will only be mortgaging it for a certain period.

Who Makes The Conveyance Deed?

The conveyance deed is mainly a legal paper that seals the transfer of ownership rights of land or the property from the seller to the buyer. The government needs to be a part of this document to make it authoritative and legally binding. This is why you will need to have a lawyer when the document is signed. Sometimes, the real estate agent or the broker should also be present at that time.

The presence of these people helps in ensuring that the legal formalities and all the terms and conditions of the property will be mentioned and listed. No changes will be made after the conveyance deed has been duly signed.

The government ends up making money from the registration of the deed. They make revenue from the stamp duty charges as well.

What Is The Key Purpose Of The Deed?

If you are wondering what is the main purpose of the conveyance deed, read on. It is mainly a legal way of proving that the seller has transferred the complete rights and authority of the property to the buyer.

The document has a valid significance because it is legally binding and therefore has government approval. It will also save the buyer and the seller from fraud claims by either of the parties.

The Process To Obtain The Deed

deed-paper — Source: Rodnae Productions / Pexel

First of all, you will need a non-judicial stamp paper and you need to go to the registrar’s office to have it registered. The conveyance deed will then be made on this paper. After you have done the registration, you need to pay the registration fee along with the stamp duty. These charges vary from one state to the other.

Here are some of the salient points you need to bear in mind when you are executing the conveyance deed.

You must pay the stamp duty. It is a means by which government generates revenue throughout the process.
When the deed is being executed, both the signing parties must be present
A minimum of two people must be present as witnesses when the conveyance deed is being executed.
The document only gets valid when it is registered with the sub-register of assurances. You cannot choose to skip this step under any account.
Both the parties involved should clearly understand the implication of this document. There should be no ambiguity over ownership rights transfer and none of the parties should partake in any fraudulent activities.

The Documents Required

When you are executing the conveyance deed, a lot of documents have to be presented so that the details can be duly checked and finalized. Here is a snapshot of the details you need to keep in mind for getting the work done.

The registered agreement for the sale
The Location Plan
The Commencement Certificate
The Completion Certificate
Property Card or the mutation entries
The Layout plan as approved by the local authorities
The Building plan as approved by the appropriate authorities
The City Survey plan
The Architect Certificate will detail the entitlement of the entire layout plot
The Occupancy certificate
The proof of registration
Proof of payment of stamp duty
The certificate of Urban Land Ceiling Act, 1976
The list of owners
The power of attorney or the agreement for sale or the development agreement; whichever is applicable
Draft of the conveyance deed

Lost The Deed- What To Do?

In the unfortunate event of losing the conveyance deed, you will need to know what to do to remedy the situation. By now, you must have understood that it is a very important document. So, here are some of the things you can do in case of loss of deed.

The owner must lodge an FIR. Always make sure to retain a copy of the FIR as it may be needed when you are looking to sell the property
You can place an advertisement in the newspaper about the missing document. Wait for a week to see if someone finds it and chooses to return the deed to you
You can choose to make an affidavit and also notarize it. When doing so, be sure that you include all the details of the property, the FIR, and also the newspaper ad to make the information complete and authentic
The best option usually is to get a legally certified copy of the deed from the sub-registrar’s office. Of course, this one comes with charges but is the safer option. You will have to again produce the necessary documents for obtaining the deed.

What Is A Deemed Conveyance Deed?

A deemed conveyance deed is issued by the state government and it means that deed has been duly executed. This will be applicable even if the developer did not execute the deed yet.

To get the deemed conveyance deed, you should submit all the relevant and required land documents which include but are not limited to land revenue, municipal records, and more.

You should also provide a copy of the approved building plan, the registered as well as a stamped agreement for each of the flats. Finally, you need to have a copy of the agreement between the landlord and the developer.

FAQ

What is a conveyance deed?

A conveyance deed is mainly a legal contract that states the transfer of rights from the seller to the buyer. It is an important and compulsory document to validate the transfer

Is the conveyance deed and the sale deed the same thing?

No, there is some difference between the two. All sales deed is conveyance deed but it is not true and vice versa. Some conveyance deeds may also include a lease, exchange, mortgages, and more.

What can I do if I misplace my conveyance deed?

You can get a legally certified copy from the sub-registrar’s office but you will have to pay the fee again and also produce the required documents

Do you need witnesses for signing the conveyance deed?

Yes, a minimum of two witnesses are needed when you are signing the conveyance deed.

Is it compulsory to pay the stamp duty?

The conveyance deed will not be executed unless you produce proof of the payment of stamp duty. This is a means by which government generates revenues from the land rights transfer work.

Can you cancel the conveyance deed?

As per the Specific Relief Act, 1963, the conveyance deed can be cancelled by mutual consent of both parties. If the individual feels that the deed is voidable or has doubts that can injure his interest, he can choose to proceed with his application.