6 Documents to Include With a Bill of Sale
When shopping in a retail store, the owner will hand over a receipt, or bill of sale, as proof of your purchase. This bill of sale contains all the details of the items that you've bought. Similarly, a bill of sale document serves the same purpose when purchasing properties, buildings, or automobiles.
When buying something, be it a small toy or a mansion, you should verify and keep these bill of sale documents in hand for a smooth transaction. The complexity of the procedure increases as the item you are buying’s value increases.
A bill of sale lays out all the details regarding the sale of goods and property transfer between people. It can be very simple or quite complex, depending on the transaction type. In most cases, a bill of sale can take two forms:
An absolute bill of sale document shows assignments, transfers, and other assurances of personal possessions. It doesn't represent any form of security and is no more than a mere contract of sale.
A conditional bill of sale represents the transfer of personal possessions to a person in exchange for payment. Unlike an absolute bill, it creates security in favor of the grantee of the bill. The grantee retains the right of repossession until the buyer pays the total amount.
The document, once signed by the two parties, stands as legal evidence. It states that the seller has handed over their rights on the listed assets to the buyer in total consideration. A few important documents will ease the bill of sale documentation process if you have them. They are:
1. Sale Deed and Title Deed
People often mistake a sale deed for a title deed. The primary difference between a sale deed and a title deed is that a sale deed is a document, while a title deed is a concept. There are a set of terms and conditions that you have to follow to formalize an ownership change. A sale deed is a document prepared for this purpose with all details regarding the deal listed clearly.
The document is valid only on the completion of its legal registration. The legal transfer of ownership is valid only after the successful registration of the sale deed. This is when a sale deed becomes a title deed.
2. Completion Certificate and Occupancy Certificate
A completion certificate is a legal document explaining whether a building's construction follows the stipulated building standards. These standards include the distance from the road, the quality of material, and the building's height.
You can obtain an occupancy certificate only after receiving the completion certificate. An occupancy certificate will typically be issued by a government authority such as a building department after confirming the building's fitness.
3. Encumbrance Certificate
An encumbrance certificate is a crucial document for any real estate purchase. The certificate states whether the property under consideration is free from any liabilities. They include monetary or legal liabilities such as a mortgage or being used as collateral against any loan.
In the case of a residential building, the buyer must ensure that they have an endurance certificate to secure legal title over the building or become eligible to apply for loans.
4. Possession Certificate
A Possession Certificate is a legally registered document that certifies the transfer of an item's possession from the buyer to the seller. It can also interpret the usage of additional properties like the garage, parking area, and other amenities mentioned in the agreement.
The buyer will have absolute right over the property. They have the right to enhance the property's value, remodel, resale, or rent it. To obtain the possession certificate, the following documents are necessary.
- Copy of sale deed agreement
- Identification and signature proof of the applicant
- Certificate of encumbrance
- Copy of registered sale agreement
Basic definitions of the certificates mentioned above
Completion Certificate (CC)
Occupancy Certificate (OC)
Encumbrance Certificate (EC)
Possession Certificate (PC)
Document issued after building construction is finished while strictly following the building plan and other regulations
Legal document declaring that the building is now fit to occupy. It is issued only after you receive the CC
Document denoting that a property is free from monetary and legal liability
Legal document stating that the interest in the property has been transferred without any illegal activities
5. No-Objection Certificates
A No-Objection Certificates (NOC) is a permission statement given to an entity to go ahead with their purchase of property or construction works. A NOC is a mandatory document. Without it, the property development might face legal problems.
6. Sale Agreement
The sale agreement is the final stage after the initial steps of collecting and verifying all the required documents. It's an agreement of a future property transfer between the buyer and seller and lays down the mutually agreed upon terms and conditions. Sale agreements also mandate that everyone who signs the document has to abide by its terms.
Create Your Documents
When buying expensive items like vehicles or property, you should be extremely cautious during the purchasing process to avoid any difficulties in the future. Having basic knowledge about the proceedings will give you an upper hand when dealing with these situations.
360 LegalForms has an extensive library of legal templates and provides you with everything you need for your basic personal, business, and real estate documents, customizable for any of the 50 states. You can also use 360 LegalForms's 7-day free trial to receive unlimited access and downloads during the trial period. Keep your purchases accounted for and clear with a bill of sale today!
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