All About Conveyance Deed: Meaning, Types, Purpose, Differences from Sale Deed

A conveyance deed is an essential legal document created during property transactions. It serves as proof of the transfer of ownership from the seller to the buyer and is crucial for safeguarding the interests of both parties. 

In this article, we will cover everything including conveyance deed meaning, types, purpose, and the differences between conveyance deeds and sale deeds. 

What is a Conveyance Deed?

A conveyance deed is a legal document that transfers the ownership of a property from one party to another. It is also referred to as a property deed or a title deed. It is a crucial document as it outlines the rights and responsibilities of the property owner and provides legal proof of ownership.

It is essential to understand the conveyance deed to ensure you have clarity of the terms and conditions associated with the transfer of property ownership. Failing to understand the conveyance deed may lead to legal complications, financial loss, and even property disputes.

Understanding Conveyance Deed Vs Registry

Conveyance deeds and registry are two distinct documents that play different roles in property transactions. The conveyance deed serves as proof of ownership transfer from the seller to the buyer, while the registry is a legal record of the property ownership maintained by the government.

Types of Conveyance Deed

Three main types of conveyance deeds are commonly used in property transactions:

1. Deed of Assignment: This type of conveyance deed is used when the ownership rights of the property are transferred from the seller to the buyer without any changes to the property itself. 
2. Deed of Transfer: This is used when the ownership rights of the property are transferred from the seller to the buyer with changes to the property itself. 
3. Deed of Conveyance: This is used when the ownership rights of the property are transferred from the seller to the buyer without any conditions or restrictions. 

Legal Requirements for Creating a Conveyance Deed

Several legal requirements must be met when creating a conveyance deed. These include:

1. The deed must be in writing and signed by both the buyer and seller.
2. The deed must include a description of the property, including its boundaries and any rights or restrictions associated with it.
3. The deed must include the purchase price and any other terms of the sale, such as the date of transfer.
4. The deed must be executed in the presence of at least two witnesses who are not related to either the buyer or seller.
5. The deed must be registered with the relevant land registry or local authority to ensure its legal validity.

Importance of Conveyance Deed in Property Ownership

The conveyance deed is essential for property ownership, as it establishes legal proof of ownership rights. It provides the buyer with a sense of security and assurance that they are the legal owners of the property. 

During times when a property owner seeks a loan against property with the lowest interest rates, the lending institution among other important documents also requires the conveyance deed as collateral.

Legal Protections Provided by Conveyance Deed

The conveyance deed provides legal protections to both the buyer and the seller. For the buyer, it serves as legal proof of ownership, protecting them from any claims of ownership from third parties. For the seller, it protects them from any legal liabilities or claims that may arise after the transfer of ownership.

What is a Sale Deed and its Role?

A sale deed is a legal document that records the transfer of ownership rights from the seller to the buyer. It establishes the agreement for the sale of the property, including the terms and conditions of the sale, the purchase price, and other relevant details.

Conveyance Deed vs Sale Deed: Key Differences

The terms "conveyance deed" and "sale deed" are often used interchangeably, but they are not the same. Let’s understand the major differences between the two.

Ownership Transfer

The main difference between a sale deed and a conveyance deed is the type of ownership transfer they facilitate. While a sale deed records the agreement for the sale of the property, a conveyance deed transfers ownership rights from the seller to the buyer.

Legal Rights and Obligations

Another key difference is the legal rights and obligations they create. A sale deed does not establish the legal rights and obligations of the buyer and seller beyond the terms of the sale agreement. On the other hand, a conveyance deed creates legal proof of ownership rights and establishes the legal obligations of the buyer and seller regarding the property.

Stamp Duty and Registration Fees

 The stamp duty and registration fees for a conveyance deed are typically higher than those for a sale deed. This is because a conveyance deed is a more comprehensive legal document that establishes ownership rights and legal obligations.

Steps to Follow for Creating a Conveyance Deed

The following are the steps to follow for creating a conveyance deed:

1. Prepare a draft of the conveyance deed that includes all the necessary details of the transaction.
2. Review the draft with both parties.
3. Once both parties agree to the terms and conditions, the deed should be signed by both the buyer and seller in the presence of witnesses.
4. Pay the applicable stamp duty on the conveyance deed as per the state government regulations.
5. Register the conveyance deed with the appropriate authority. 

Documents required for creating a Conveyance Deed

Below are the documents required for conveyance deed creation:

1. Title deed
2. Sale agreement
3. Proof of stamp duty and registration fees
4. Identity proof
5. Property tax receipts
6. Encumbrance certificate

Professional Assistance for Creating a Conveyance Deed

Professional assistance can be sought for creating a conveyance deed to ensure all legal formalities are met, the deed is legally valid, and the transaction is smooth. 

Importance of Registering Conveyance Deed

Registering a conveyance deed is crucial for transferring ownership of property legally. The conveyance deed becomes legally valid only after it is registered with the competent authority. 

But what if the conveyance deed is not registered? It may not be legally binding, and the transfer of ownership may not be recognized by the law. 

Conclusion

In a nutshell, a conveyance deed is a crucial document that must be created and registered during property transactions. It serves as evidence of the transfer of ownership from the seller to the buyer, and it safeguards the interests of both parties. Doing so can help to ensure that all legal formalities are met and that the transaction is smooth and hassle-free.