Owning a property or a dream house is essential but more important is to have the required knowledge of this process so that you do not get duped if you don’t know the procedure or the list of documents which you should acquire along with the property. Just paying the amount for the property does not mean that you own that property. You should have all the legal documents to prove that you are the new owner of that particular property and you should also know the importance of them. One such document is Conveyance Deed.
1. Meaning and Purpose of Conveyance Deed
The term ‘Conveyance’ refers to the act of transferring the title, ownership, rights and interests of a property, from the seller to the buyer. It is a written document that is signed by both the parties. In this document, the seller transfers all the rights to the new owner of that property. Now, the new owner of the property has all the rights over that property. He can hold or sell it on his or her wish. Without a proper Conveyance Deed, the buyer will not hold any legal rights over that property in spite of paying the agreed amount. Hence a Conveyance Deed is an important document and declares that the transaction for that property is now complete.
This deed holds some legal technicalities which can save you from fraudsters. This is a legal document that states that the seller of a property has transferred all the authority and the ownership regarding that property to you and no else can now have a claim on the said property.
2. Conveyance Deed and Sale Deed
A Sale Deed is a Conveyance Deed but it is not vice versa. Any legal document that declares the transfer of property rights is considered to be a Conveyance Deed, so Sale Deed is also a Conveyance Deed. Other documents like Gift Deed, Exchange Deed, and Relinquishment Deed are also counted as Conveyance Deed.
3. Types of Conveyance Deed
There are five types of Conveyance Deed where you need to transfer the rights of the said property to the new owner. It may be with some consideration (monetary) and at times without any monetary consideration.
3.1. Conveyance Deed of Freehold Property
A Freehold property, as the name declares is free from any hold from any person and the owner of such property is free to use it for any purpose. The sale of such property needs lesser paperwork but is more expensive. The Conveyance Deed of such Freehold property gives the liberty to the owner to enjoy all the rights over that property.
3.2. Conveyance Deed of Leasehold Property
In a Leasehold Property, the new owner has the right to everything within the four walls of the property but it does not include the external or structural walls. The property will be given on lease for a length of time- usually 30-99 years. The ownership of the land, the structure, the common areas of the building remain with the owner of the land and the new owner has the right to live within the stipulated period of time and he also holds the right to do any changes within the outer walls of the structure. The Conveyance Deed for a Leasehold Property will be prepared with the required instructions.
3.3. Conveyance Deed for Subject to Mortgage Property
In this type of Deed, the buyer holds the right to enter the subject to mortgage property from time to time and enjoy the building and its premises.
3.4. Relinquishment Deed of Conveyance
This type of deed is created when the transfer of a property takes place with a common property. For example – If a person dies without leaving any will, then his property will he inherited by his legal heirs. Now it is up to the legal heirs what they want to do with that property. If the heirs decide to divide the property and anyone of those legal heirs decide not to keep the property, can relinquish his share in favour of any other legal heir. This process of transferring of rights from one legal heir to another legal heir of that same property is known as Relinquishment and the Conveyance Deed of Relinquishment holds all these facts of transfer of rights on that said property.
3.5. Gift Deed of Conveyance
If a property is gifted to someone, then it needs a Conveyance Deed to prove that the rights of that property are transferred from the grantor to the grantee.
4. Importance of Conveyance Deed
A Conveyance Deed is a legal document that includes legal terms and declares the transfer of rights on a particular property from the seller to the buyer. The purchase of that property is incomplete without the Conveyance Deed. This is governed under judicial Act and prepared on a non-judicial stamp paper. It is registered at the local Sub-Registrar’s Office after paying the registration fee. A Conveyance Deed includes the details of the property like – the names of the buyer and seller, their addresses, demarcation of the property, the chain of titles of the said property and the method of delivery of the property. It should also have the power of Attorney if it was created and must include the exact possession date on which the property will be handed to the buyer. This Deed also holds a memo of consideration that states how the property has been received. It has to be signed by the buyer, seller and at least two witnesses. The details of both the witnesses should also be included. Basically any legal document that transfers the rights of a property from the seller to the buyer is considered to be under the banner of Conveyance Deed.
As mentioned earlier a Sale Deed is a Conveyance Deed but the reverse is not applicable. A Conveyance Deed is signed against a monetary consideration whereas gift deeds are based on family bonds. A property gifted to some close one, needs to have a Gift Deed to declare that you have gifted that property to your close one and also transferred all the rights to him, otherwise that gifted property has no legal value. Your legal heir can claim that property in your absence, as it does not hold any Deed. Legally, the legal heir will also acquire that gifted property from your close one as it is without any Conveyance Deed. So, by now you must have understood the importance of Conveyance Deed.
Written by
Kishore Reddy
When it comes to the Realty Sector, the name of Mr. Kishore Reddy, an eminent builder, echoes everywhere and outshines many others. As a partner of EIPL INFRA, he has taken up the construction in Real Estate to an elite echelon. He believes in transparency, value creation, and decent profitability, and his sharing his thoughts, advice, and information on his immense knowledge in real estate through blogging.