When engaging in real estate transactions, one may come across the term deed. A deed refers to an agreement signed between two parties to transfer the ownership of a movable or immovable property. In India, there are various types of deeds for property used to establish property ownership and transfer of property rights. In this article, we will discuss the various types of deeds in India.
What is a deed?
A deed refers to a signed legal document transferring property ownership from one person, grantor or seller to another, the grantee or buyer. In simple words, a deed is a legally binding agreement to accomplish something. It is a document that proves a person owns a property or an asset.
Types of deeds in India
Sale deed
It is a document that transfers the ownership, title, and property rights from the seller to the buyer. The buyer and seller are required to sign a sale deed before the property transaction is legally completed.
Lease deed
A lease deed refers to a legal agreement for the performance of a lease, that is, for granting a rental property for a specified period. The document establishes the lessee’s ownership rights and interests in the leased property.
Mortgage deed
A mortgage deed refers to a legal agreement when the property is given as collateral for a loan. If the borrower defaults, the lender is allowed to sell the property to recover dues. The document contains details such as the loan amount, interest rate, property held as collateral, parties involved, etc.
Gift deed
A gift deed refers to a legal document used to transfer property ownership as a gift from one person to another without any monetary consideration. According to Section 122 of the Transfer of Property Act, 1822, the donor has the right to freely transfer their existing movable or immovable property to the donee through a gift deed.
Partition deed
A partition deed is a document used to divide the property among its co-owners. It specifies details of the shares of each co-owner and the property allocated to each.
Relinquishment deed
A relinquishment deed refers to a document in which a co-owner gives up his/her share of ownership or interest in a property to another co-owner.
Conveyance deed
A conveyance deed is a document used to transfer property ownership from one person to another as a gift, an exchange, a lease, or a mortgage, among other things. Thus, a conveyance deed may be referred to as a gift deed, lease deed, sale deed, or mortgage deed. One should note that a sale deed is used to transfer ownership of a property through a sale. However, all conveyance deeds can be sale deeds, but all sale deeds are not conveyance deeds.
Power of Attorney (POA)
A power of attorney (POA) is not a deed but a legal document that gives an individual the right to act on behalf of the property owner. A POA refers to a legal document by which the principal grants his agent certain powers to conduct and execute certain actions or deeds, including property transactions, on his behalf.
Release deed
A release deed refers to a document used to relinquish the rights of one party over the property in favour of another party.
Trust deed
A trust deed refers to an agreement to create a trust in which a property is transferred to a trustee to secure a debt, such as a promissory note or a mortgage. In case of a default on duty, the trustee has the authority to sell the property. In India, through a trust deed, the settlor transfers the property to the trustees and the trustees are required to manage the trust as per the terms and conditions.
Exchange deed
An exchange deed refers to a document used when two parties agree to exchange their properties. The terms of the exchange are specified in the deed.
General warranty deed
In the case of residential property sales, a warranty deed serves as a guarantee to the buyer that the seller has all the right to sell the property and that the property is free of debts and liabilities.
A general warranty deed is mostly used in residential sales. The warranties conveyed and pledged legally bind the seller or grantor. The grantor offers several covenants or warranties for the title in the deed, promising that the title to the property is good and clear and the property is free from any obligations and liabilities.
Special warranty deed
In a special warranty deed, the grantor or seller’s guarantee, offered to the buyer or grantee, does not cover the property throughout its history but only for the time when the grantor owned it. In this type of deed, the grantor makes two warranties – firstly, that the grantor has title to the property and secondly that the property was free of encumbrances during the grantor’s ownership term.
Quitclaim deed
A quitclaim deed is a document typically executed when both parties are familiar or have some kind of relationship with each other, such as family members, divorced couples, and friends. This type of deed is created to transfer any title, claim, or interest in the property by the grantor. However, it does not guarantee that such a title is legitimate. There is no money exchanged and no promise or guarantee.
FAQs
What is the difference between a deed and an agreement?
In an agreement, one party may offer the product in return of money from the other party. On the other hand, in a deed, consideration is not required for a deed to be legally binding, and it must be executed in writing.
Is a deed legally valid?
For a deed to be legally valid, it must be in writing, must be signed, expressed to be a deed, delivered to another party, and be witnessed by at least one person, who is not a party to the deed.
What are the different types of deeds in India?
Some widely used deeds in real estate transactions are sale deed, conveyance deed, gift deed, lease deed, etc.
What are court order deeds?
Such types of deeds are executed due to a court order without the owner’s agreement, typically when the seller is unable to pay the price of the property.
What is a development agreement?
A development agreement refers to an agreement between a landowner and a developer for the development of a property. The document specifies details such as the terms of the development project, revenue sharing, etc.
What is an adoption deed?
Adoption is the process of establishing a parent-child bond between people who are not biologically related. A deed of adoption is signed when an adoption takes place. Through this document, the biological parents or parents’ rights and duties and filiation are transferred to the adoptive parents. The adoptive family bestows the rights, privileges and responsibilities of a child and heir to the adopted kid.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
