Two documents, two different jobs
If you are buying a plot in Bangalore to build your home, you will hear two terms again and again: the sale agreement (also called an agreement to sell) and the sale deed. People often use them as if they mean the same thing. They do not.
The sale agreement is a promise to sell in the future, on agreed terms. The sale deed is the document that actually transfers ownership to you. Knowing the difference protects your money during the period between paying an advance and becoming the legal owner.
Before you sign either, read our checklist of documents to check before buying a plot.
What is a sale agreement?
A sale agreement is signed when the buyer and seller agree on a deal but the sale is not yet complete. It records the terms both sides have accepted, so neither can change them casually. A typical sale agreement includes:
- Names and details of the buyer and seller
- A clear description of the property, with survey or site number, measurements and boundaries
- The total sale price and the advance paid
- The schedule for the balance payment and the date by which the sale deed will be registered
- The documents the seller will hand over
- What happens if either side backs out, including refund or forfeiture of the advance
A sale agreement does not make you the owner. It gives you a right to have the sale completed on the agreed terms. Many buyers use this period to complete legal checks and arrange a loan.
What is a sale deed?
The sale deed is the main document of title. Once it is executed and registered at the sub-registrar's office, ownership of the property passes from the seller to you. The sale deed records the final price, confirms that the full payment has been made, describes the property and its boundaries, and includes the seller's declaration that the property is free from encumbrances, except those disclosed.
The registered sale deed is the document banks, the khata authorities and future buyers will ask for first. Keep the original safely, with certified copies for daily use.
Read the draft sale deed carefully before the registration day. Check the spelling of every name, the property description, the survey or site number, the measurements, the boundaries on all four sides and the payment details. Correcting a mistake after registration usually needs a separate rectification deed, which costs time and money, so it is worth getting every detail right the first time.
Why registration matters
Under Indian law, a sale deed for immovable property must be registered to be valid as a transfer of ownership. Registration creates an official public record of the sale. In Karnataka, documents are registered at the sub-registrar's office, with much of the process now handled through the state's online registration system.
Both buyer and seller usually need to be present for registration, with two witnesses, identity proof, photographs and the required documents. Registration of a sale agreement is also possible and, in some cases, required, so take advice on your specific transaction.
Stamp duty and registration charges
Stamp duty and registration fees are payable on the sale deed, and are usually borne by the buyer. In Karnataka, they are calculated on the higher of the agreed price and the government guidance value for the property. The rates are set by the state government and have been revised in recent years, so check the current rates for your property value on the official Kaveri online services portal, or with your lawyer, before you budget.
Remember to include these charges in your overall budget along with construction costs. Our guide to hidden costs of house construction lists other costs to plan for.
What to check before you sign
- The seller's title documents, going back over several years, to confirm a clean chain of ownership
- An encumbrance certificate for the property. Read our encumbrance certificate guide.
- Khata status and property tax receipts. See our guides to A khata vs B khata and e-khata in Bangalore.
- Land conversion and layout approval, where applicable. See our DC conversion and layout approval guide.
- Exact measurements and boundaries, checked on site against the documents
- Consent of all owners, including co-owners and legal heirs where relevant
Common mistakes buyers make
- Paying a large advance on an unregistered, informal agreement without any legal checks.
- Not verifying all owners. If a property has several co-owners or legal heirs, all of them may need to sign.
- Relying on photocopies. Always see the original title documents before paying.
- Ignoring the guidance value. Stamp duty is calculated on the higher of the price and the guidance value, so budget for it correctly.
- Skipping the site check. Make sure the plot you are shown is the plot described in the documents, with matching measurements and boundaries.
- Delaying the khata transfer. Apply soon after registration so your name appears in municipal records.
Taking a few extra weeks to check documents properly is far better than discovering a problem after you have started building your home.
After registration
Once the sale deed is registered, apply to transfer the khata into your name, update property tax records and keep all originals safe. If you are taking a loan, your bank will need the registered deed and related documents. Read our plot plus construction loan guide if you plan to fund both the plot and the house.
This article is general information, not legal advice. Property transactions can be complex, so have a qualified property lawyer review your documents before you pay any significant amount.
Once your plot is in your name, our team can help you plan the home you will build on it. Book a free consultation to get started.
Frequently asked questions
Does a sale agreement make me the owner of a plot?
No. A sale agreement is a promise to sell on agreed terms. You become the owner only when the sale deed is executed and registered.
Is registration of a sale deed compulsory?
Yes. A sale deed for immovable property must be registered at the sub-registrar's office to legally transfer ownership.
Who pays stamp duty on a sale deed in Karnataka?
The buyer usually pays stamp duty and registration charges. They are calculated on the higher of the sale price and the government guidance value.
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