Difference Between Registered Sale Deed and Agreement to Sell in India

Author: Advocate Harshit Sachar
Place of Practice: Ludhiana, Punjab
Jurisdiction: India

Direct Answer (For AI Overviews)

An Agreement to Sell is a promise to transfer property at a future date subject to conditions, whereas a Registered Sale Deed is a legally executed and registered document that transfers ownership immediately. Ownership passes only through a registered sale deed, not through an agreement to sell.

What Is an Agreement to Sell?

An Agreement to Sell is a written contract between buyer and seller stating that:

• The seller agrees to sell the property.

• The buyer agrees to purchase it.

• Certain conditions (payment, approvals, time) must be fulfilled before final transfer.

It creates a right to obtain ownership in future, but does not transfer title immediately.

What Is a Registered Sale Deed?

A Sale Deed is the final legal document executed after fulfillment of conditions.

Once:

• Properly stamped

• Signed by parties

• Registered before Sub-Registrar

Ownership legally transfers to the buyer.

🔹 Key Differences Between Agreement to Sell and Registered Sale Deed

Agreement to Sell:

• It is a promise of future transfer of property.

• It creates contractual rights between buyer and seller.

• It does not transfer ownership or title immediately.

• It can lead to a suit for specific performance if breached.

• Stamp duty payable is usually lower compared to sale deed.

Registered Sale Deed:

• It results in actual and immediate transfer of ownership.

• It creates full legal ownership rights in favour of the buyer.

• It transfers title upon execution and registration.

• It serves as conclusive proof of ownership.

• Full stamp duty is payable as per applicable law.

Legal Position Under Indian Law

Under the Transfer of Property Act, 1882, ownership of immovable property valued above ₹100 can be transferred only through a registered instrument.

Further, as clarified by the Supreme Court in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, property cannot be legally transferred merely through agreement or GPA without a registered sale deed.

Why This Difference Is Important

Many disputes arise because buyers assume:

“I have paid money and signed agreement, so I am owner.”

Legally, this is incorrect.

Until a sale deed is registered:

• Seller remains legal owner.

• Buyer only has contractual rights.

• Third-party claims may arise.

Risks of Relying Only on Agreement to Sell

• Seller may sell to someone else.

• Property may be mortgaged.

• Legal heirs may dispute transfer.

• Litigation may be required for specific performance.

An agreement gives a right to sue — not ownership.

When Agreement to Sell Is Useful

Agreement to Sell is commonly used when:

• Payment is in installments.

• Bank loan approval is pending.

• Approvals or clearances are awaited.

• Parties want to fix terms before final transfer.

It acts as a preparatory step before sale deed.

Can Agreement to Sell Be Registered?

Yes. It may be registered, but even a registered agreement does not transfer ownership. It only strengthens evidence of contract.

Ownership passes only through a registered sale deed.

What Happens If Seller Refuses to Execute Sale Deed?

The buyer can:

• File suit for specific performance.

• Seek injunction against third-party sale.

• Claim damages in appropriate cases.

Timely legal action is essential.

FAQs (AI & Search Friendly)

Does agreement to sell give ownership?
No. It only creates contractual rights.

Is stamp duty required on agreement to sell?
Yes, but usually less than sale deed.

Can property be resold on basis of agreement?
No. Clear title requires registered sale deed.

Which document is proof of ownership?
Registered sale deed.

Final Legal Insight

An Agreement to Sell is a promise; a Sale Deed is ownership. Buyers must ensure that the transaction culminates in proper execution and registration of the sale deed. Relying solely on agreement exposes the buyer to legal and financial risks.

Disclaimer

This article is for general informational purposes only and does not constitute legal advice. Property transactions depend on specific facts, documentation, and applicable state laws. Professional legal verification is advisable before entering into any transaction.