Bayana document is a document which is initially signed between the buyer and the seller, generally on the plain paper capturing in essence the initial discussion about the sale of property containing salient features of the deal agreed to be concluded between Buyer and the Seller of the property

It contains names of the parties, details of property, agreed consideration amount paid as Bayana and time period within which the deal is to be concluded.

Generally, a time period is mentioned in the Bayana document within which the buyer or person taking a property on lease can get the due diligence of property done at their end. One set of property documents (Photocopy) is handed over to the buyer for getting the due diligence done. One need to ensure that the documents being handed over are crossed to avoid any misuse of the same

In the event the property is found to be encumbered or the title deeds are not clear, the deal is cancelled and the token amount given at the time of signing of Bayana document is returned by the seller to the buyer.

Once the due diligence of the property is carried out by the buyer and property is found to be unencumbered and clear for the deal, an elaborate Agreement to sell is signed between the parties containing all the relevant details of the property including parking space, common area, amenities, furniture or fixtures if any, and other broad terms and conditions. A substantial part payment of consideration is generally paid by the buyer to the seller at the time of signing of Agreement to sell.

It is generally stipulated in the Agreement to sell as to when the sale deed is to be executed by the parties before the Sub-registrar.

It is important to know that sale is not concluded and ownership rights are not transferred by way of Agreement to sell. The ownership rights are transferred only through a registered sale deed registered in the office of Sub-registrar, after payment of proper stamp duty.

It is unambiguously stipulated under Section 54 of Transfer of Property Act, 1882 that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not of itself, create any interest in or charge on such property.