Both Sale Deeds and Sale Agreements are essential legal documents that must be drawn up for the sale of a property. Both agreements must be signed by both buyer and seller, but they have different functions.
- A sale deed is a document that transfers ownership of a property, or properties, in exchange for the price agreed in the sale agreement. It is also called a Property Title.
- A sale deed is termed an ‘instrument of conveyance’ and must be drawn by a registered conveyancer, whereas a sale agreement not be.
- A sale deed must be registered with the relevant Deeds Office and is an official notification of a transfer of ownership of an asset to the buyer, and the transfer of capital gains to the seller. It is generated upon the transfer and requires the payment of transfer duties.
- A sale deed makes null and void any prior obligations or rights of the seller in respect of the property.
- A sale agreement predates a sale deed. It is the document that defines the property, or properties, to be transferred, and the price it will be transferred in exchange for, along with any terms and conditions to the sale.
- A sale agreement is an agreement of terms, legally binding between the buyer and seller. It does not convey ownership.
- A sale deed may contain ‘suspensive clauses’ defining any obligations on the part of one party to the other, or conditions that must be met before transfer of ownership.
- A sale agreement does not need to be registered with any outside body, but it is legally binding according to the terms and conditions agreed to by both parties. A sale agreement can be a crucial document when it comes to dispute resolution after the transfer of ownership and the signing of the sale deed if it includes ’suspensive clauses’ regarding the obligations of the seller.
Once the deed of sale has been registered, the sale is complete
A sale agreement is a memorandum of agreement wherein all the terms and conditions of a prospective contract of sale are calculated along with the proposed details of payment. This is where both buyer and seller formalize all aspects of the future sale. This document enables the process of sale to happen smoothly by describing the steps in detail and is the document that the Deed of sale is based on.
Having a professional at your side through the process is a great advantage. One that can assist you with property evaluations and sales agreements will make the process smooth and binding. TAT Accountant brings both the financial and legal savvy together making your sale or purchase effortless.
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