What Are Sale Deed And Lease Deed When Buying Property? Know Which One Is Better – News18

Transfer of immovable property or real estate is perhaps one of the most common and frequent business transactions that people deal with. Be it a shop, a piece of land, a commercial warehouse or a home, they are all prone to exchange of ownership through various processes which may include sale deed, lease deed, gift deed or power of attorney.

A sale deed and a lease deed may share a lot of common attributes and look the same prima facie but they are set apart from each other through some basic differences.

Buying a property through a sale deed makes you the owner of the property for the entirety of the future. The sale deed belongs to the same class of conveyance deeds as various other deeds, including lease deeds, mortgage deeds, gift deeds and exchange deeds. The sale deed and associated deed paperwork are useful when selling a property. A sale deed does not transfer the rights of the property to you for a specified time period but for as long as you want to keep possession of it.

If you buy a property through a lease deed, you get ownership rights only for a fixed period. It is comparable to a lease between a landlord and tenant but is typically signed for a longer length of time- at least more than one year. A lease on an agreement’s duration is typically between anything more than a year and 99 years.

The sale deed is written on stamp paper. In this, the ownership rights are completely transferred. Along with this, registration is also done in the local sub-registrar’s office. In a lease deed, as opposed to a rent agreement, where a tenant pays the landlord rent in exchange for the use of the property, the lessee purchases the lease rights to the lessor’s property and becomes owner for a specified time period.

Lease deeds were fairly common in the past. Governments frequently take out proposals to turn leased property into sale deed property.

The agreement to sell is finalised once the sale deed is recorded. The selling deed must be registered which is very crucial. The buyer cannot legitimately become the property’s owner unless the sale deed is recorded. Once the sale deed is signed and registered, the buyer officially owns the property.