Sale Deed vs Agreement to Sell: What Changes Hands, and When
An agreement to sell is a promise to transfer a property later; a sale deed is the transfer itself. Section 54 of the Transfer of Property Act, 1882 says a contract for sale "does not, of itself, create any interest" in the property, and ownership of anything worth Rs 100 or more passes only through a registered sale deed. Until that deed is registered, the seller still owns the property.
Key takeaways
- The agreement to sell fixes price, timelines and conditions. The sale deed conveys title. You need both, in that order, for most resale purchases.
- The Supreme Court in Suraj Lamp & Industries v State of Haryana (2011) held that an agreement to sell, a GPA and a will together do not transfer ownership.
- An agreement to sell must be registered if you want the part-performance shield of section 53A, under section 17(1A) of the Registration Act, 1908 (added in 2001).
- Stamp duty on the agreement depends on the state. Karnataka charges 0.5% without possession; Maharashtra treats an agreement that hands over possession as a conveyance and charges full duty.
- If the seller backs out, your remedy under an agreement is a suit for specific performance, filed within three years under Article 54 of the Limitation Act, 1963.
What each document actually does
The agreement to sell records that the seller will sell and you will buy, at an agreed price, once certain things happen: the balance is paid, a loan is sanctioned, an NOC arrives. It creates rights between the two of you, not rights in the property against the rest of the world.
The sale deed (also called the conveyance deed) is the instrument that moves ownership. Section 54 defines sale as a transfer of ownership in exchange for a price, and says that for tangible immovable property worth Rs 100 or more, the transfer "can be made only by a registered instrument". Once the sale deed is executed and registered before the sub-registrar, you are the owner, even if a small part of the price is still outstanding.
Why the difference matters in real life
A seller who signed an agreement with you still holds title. If he mortgages the flat or sells it to someone else by a registered deed, your recourse is a lawsuit, not the flat. The Supreme Court restated this on 7 January 2025 in Indian Overseas Bank v M.A.S. Subramanian, holding that an agreement for sale does not transfer title to the purchaser, and again in January 2026 in Vayyaeti Srinivasarao v Gaineedi Jagajyothi, where a tenant who had paid Rs 6.5 lakh of a Rs 9 lakh price under a 2009 agreement was still not the owner.
Side-by-side comparison
| Point | Agreement to sell | Sale deed |
|---|---|---|
| Legal nature | Executory contract: a promise to sell in future | Executed transfer: the sale itself |
| Ownership | Stays with the seller | Passes to the buyer on registration |
| Governing law | Indian Contract Act, 1872; s.54 TPA (contract for sale) | s.54 TPA; Registration Act, 1908, s.17 |
| Registration | Needed for s.53A protection since 2001 (s.17(1A)); required by RERA s.13 in new projects | Compulsory; unregistered deed passes no title (s.49) |
| Stamp duty | State-specific; from 0.5% to full conveyance duty | Full conveyance duty (4% to 6% in the states below) |
| If the other side defaults | Sue for specific performance or damages | Sue for the unpaid price; title has already passed |
| Risk borne by buyer | Seller can still mortgage or resell | Buyer bears the risk of loss as owner |
Registration: section 17, section 49 and section 53A
Section 17(1)(b) of the Registration Act makes registration compulsory for any non-testamentary instrument that creates or transfers an interest in immovable property worth Rs 100 or more. A sale deed falls squarely within it. Section 49 then spells out the penalty: an unregistered document that should have been registered does not affect the property and cannot be received as evidence of the transaction.
Agreements to sell were long outside compulsory registration. That changed on 24 September 2001, when the Registration and Other Related Laws (Amendment) Act inserted section 17(1A). An agreement for consideration, executed after that date, has "no effect" for section 53A unless it is registered.
What section 53A gives you, and what it does not
Section 53A of the Transfer of Property Act is the doctrine of part performance. If you took possession under a written contract and have done, or are willing to do, your part, the seller cannot evict you just because no sale deed exists. It shields possession; it does not make you owner. Since 2001 you get it only if the agreement is registered.
One exception survives for unregistered agreements. The proviso to section 49 lets an unregistered agreement be received as evidence of the contract in a suit for specific performance. So an unregistered agreement is not worthless, but it leaves you depending on a court.
Stamp duty on each document, by state
Stamp duty is a state subject. The broad split is between agreements without possession and agreements that hand over, or promise, possession before the sale deed.
| State | Agreement to sell | Sale deed (conveyance) | Registration fee |
|---|---|---|---|
| Maharashtra | Full conveyance duty if possession is given or agreed to be given (Explanation I, Article 25) | 5% plus 1% metro cess in Mumbai (6%); women get a 1% concession | 1%, capped at Rs 30,000 |
| Karnataka | 0.5% without possession (Article 5(e)(ii)); Rs 20,000 cap removed from 3 February 2024 | 5% above Rs 45 lakh, plus cess and surcharge | 2% since 31 August 2025 (was 1%) |
| Delhi | Depends on the terms; take advice | 6% men, 4% women, 5% joint | 1% plus Rs 100 pasting fee |
Sale deed rates for other states are in our stamp duty and registration charges guide. The Maharashtra rule surprises people: the Supreme Court has upheld impounding under Explanation I even where possession was to follow the conveyance, because duty is charged on the instrument's terms.
Worked example: a Rs 1 crore flat
Take a resale flat priced at Rs 1 crore in Bengaluru, bought by an individual buyer. The agreement to sell is signed without possession, so Article 5(e)(ii) applies: 0.5% of Rs 1,00,00,000 is Rs 50,000 in stamp duty on the agreement.
At the sale deed stage, stamp duty at 5% is Rs 5,00,000 and the registration fee at 2% is Rs 2,00,000, a total of Rs 7,00,000 before cess and surcharge on the duty. Add the Rs 50,000 already spent on the agreement and the paperwork cost is Rs 7.5 lakh plus cess, or roughly 7.5% of the price before surcharges. Budget for the full figure, not just the headline stamp duty rate.
Where buyers get hurt
The weakest position in Indian property is holding an agreement, a receipt and the keys, but no registered sale deed. This is what Suraj Lamp addressed. The court said such "SA/GPA/Will transfers" were used to dodge stamp duty, registration charges and capital gains tax and to park unaccounted money, and held that they do not convey title. We cover the fallout, and what to do if you already hold one, in our guide to GPA sale risks.
- Seller resells or mortgages. A later registered buyer or a bank with a registered mortgage can defeat you unless you had registered your agreement or were in possession under section 53A.
- Seller dies. You must then enforce the agreement against the legal heirs, who may not agree with it.
- The limitation clock. Article 54 of the Limitation Act gives three years to sue for specific performance, from the date fixed for performance or, if none, from when you learn the seller refuses. Courts have also refused relief to buyers who sat on their rights inside that window.
- Loan and resale problems. Banks lend against title, so without a sale deed you cannot mortgage or cleanly resell.
What to put in a good agreement to sell
- A property description that matches the title chain and the latest mutation record.
- Price, payment schedule and a firm date for the sale deed.
- Conditions: loan sanction, NOCs, clearance of any existing mortgage.
- What happens to the earnest money if either side defaults.
- The seller's promise not to create any charge or deal with anyone else meanwhile.
Run the title check before you sign, not after. Our title and legal check guide sets out what to look at, and the paperwork for the registration day itself is in documents required for property registration.
New projects work differently
In a project registered under the Real Estate (Regulation and Development) Act, 2016, the builder cannot take more than 10% of the cost as an advance without first signing and registering an agreement for sale (section 13). That agreement governs you until the conveyance deed after completion, so read our note on builder-buyer agreement clauses before signing.
Frequently asked questions
Does an agreement to sell make me the owner?
No. Section 54 of the Transfer of Property Act says a contract for sale does not create any interest in the property. The Supreme Court confirmed this in Suraj Lamp (2011) and again in January 2025. You become the owner only when a sale deed is executed and registered before the sub-registrar. Until then, the agreement gives you a right to sue the seller, not a right over the flat.
Is registration of an agreement to sell compulsory?
For most private resale agreements it is not compulsory in the general sense, but section 17(1A) of the Registration Act means an unregistered agreement signed after 24 September 2001 gives you no section 53A protection. In RERA-registered projects, section 13 requires the agreement for sale to be registered before the builder takes more than 10%. Registering is usually worth the cost.
Can I sue if the seller refuses to execute the sale deed?
Yes. You can file a suit for specific performance, and since the 2018 amendment to the Specific Relief Act, courts grant it as the normal rule rather than at discretion. File within three years of the date fixed for the sale deed, or of learning the seller refuses. Even an unregistered agreement is admissible for this purpose under the proviso to section 49.
Is stamp duty paid twice, once on each document?
Often, yes, though how much depends on the state. In Karnataka you pay 0.5% on an agreement without possession and then full duty on the sale deed. In Maharashtra an agreement that hands over possession attracts full conveyance duty itself. Check the state rule, and whether any adjustment is allowed, before you sign.
If you are about to sign an agreement to sell and want a second pair of eyes on it, the Realty Hunting team is happy to talk it through.
