Agreement to Sell
The contract fixing the terms of a future property sale — it creates no ownership interest by itself; only the registered sale deed transfers title.
Definition
An agreement to sell (also called agreement for sale) is the contract signed between buyer and seller that sets out the terms on which a property sale will happen: the price, payment schedule, possession date, and conditions each side must fulfil. It is the first formal step in a property transaction and is usually accompanied by the buyer paying token or earnest money as a commitment; if the buyer defaults substantially, the seller may forfeit it per the contract's terms, and if the seller defaults, the buyer can seek refund or specific performance.
Its legal limit is defined by Section 54 of the Transfer of Property Act, 1882: a contract for the sale of immovable property 'does not, of itself, create any interest in or charge on such property.' Ownership passes only when a sale deed is executed and registered. The Supreme Court reiterated this in Suraj Lamp v. State of Haryana (2011) — an agreement to sell, even combined with a power of attorney, does not transfer title. The agreement to sell is a promise of a future transfer; the sale deed is the transfer itself.
Stamping and registration rules vary by context. For under-construction property, Section 13 of RERA prohibits a promoter from accepting more than 10% of the cost without first executing and registering a written agreement for sale, and states like Maharashtra require registration of such agreements. Even where registration is not compulsory, having the agreement properly stamped (and registered where possible) makes it enforceable in court and admissible as evidence — an unstamped agreement can face objections and penalty duty.
Example
After paying Rs 2 lakh as token money, Anita signed a registered agreement to sell fixing the flat's price at Rs 80 lakh with the sale deed to be executed within 90 days.
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Sources
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